Friday, December 2, 2016

The economy - learning from China?

In the light of President-elect Trump's campaign slogan, 'Make America Great Again', and his campaign to bring jobs back to this country that had been lost overseas, I found this perspective on doing business in China to be rather interesting.  Compare and contrast to our US experience.

The hotels were amazing. Equal or better than anything you might find here or in Europe, at a much lower cost. The infrastructure has improved dramatically. From brand new major super-highways to bullet trains cruising along at 180mph. The cities were surprisingly clean and well organized. Traffic jams were omnipresent as was caustic air pollution. While the food has definitely improved, you no longer need to wonder whether your chicken is really chicken or some other creature, it still leaves much to be desired.

For an alleged police state, we saw very few police or military. Internet service was fast, but local service blocked Google, YouTube, Facebook and my podcast server Libsyn. However, my Verizon cellular and data service worked flawlessly. Our host was amazed that there were no blocked sites on Verizon, even though it was using the same network that his smartphone used. You could always use a VPN to avoid government firewall blocking.

In Yiwu we visited the largest general goods wholesale market on the planet. The building stretches for 6 kilometers and is four stories high. Every type of good you can imagine was available, from numerous vendors at amazingly cheap prices. Usually at less than one-tenth the price you’d pay in a store in the States. Housewares, outdoor goods, electronics, jewelry, hardware, etc. It ran for literally miles and miles. At this point I realized that no matter how effective a President Trump may be, he’s not going to bring back this type of manufacturing to America. The war has been fought and lost. Unless he’s putting a 200 percent tariff on these goods, they’re going to be made in China.

There's more at the link.

Basically, China learned from the West what it takes to be a First World economy - then improved on that with its own dash of indigenous culture.  In some aspects, of course, it's far from an improvement to our eyes (particularly in areas such as human rights, freedom of expression, etc.), but from the perspective of the Chinese people, it's far, far better than what they had.  They'll put up with the negatives in order to get the positives.

I wonder whether American voters will have the sense to do the same thing?  We simply can't bring back the 'old jobs', because most of those industries no longer exist in the form that they did when they operated here.  Steel plants were labor-intensive;  now they're robot-intensive.  'Work smarter, not harder' has become a worldwide mantra;  but how many of our school-leavers have been educated to the point where they can work smarter?  I venture to doubt that the average US public school produces work-ready employees.  Most of them need help tying their metaphorical shoelaces!

It's going to be an interesting ride.  Just as China learned from us, perhaps it's time for us to learn from China and other countries, and use that to shape what we hope will be our new success story.  Your thoughts?



James Buchanan said...

An interesting thing about robots, they do not repair themselves. And they do not replicate. And they are not automious. Someone has to tell,teach them what to do. And repair, and like old steam engines clean and oil them. The plant owner? Not likley, staff?

DaddyBear said...

You're right. Folks don't want the jobs that might come back. They want the jobs they or their fathers used to have. If we are going to bring industry back, we are going to have to either retrain the population or start over from scratch with the next generation.

raven said...

"1/10 the price of the goods sold in the US."

We are told, with a straight face, that the US does not have to worry militarily because we already spend "X" more than the rest of the world on our military. This article illustrates why that thinking is absurd. It is not how much we spend that determines the quality and quantity of our forces- It is what we GET for the money.

Rusty Gunner said...

China is also riding a tiger with its labor force. Many of them are also in trades for which the supply of workers outstrips demand, so they give them work to prevent riots. Ever see those empty cities in the hinterlands? That's a Chinese solution.

Norman said...

The future does lie in automation. Designing, installing, programming and maintaining robotic systems, especially those beginning to use artifical intelligence, is far beyond a trivial set of tasks. I'm confident there is a "competent core" of people who are either already capable of doing many of those tasks, or quite trainable to do so.

Ain't none of them the SJWs universities are turning out by the thousands.

I'm not convinced that no matter how much really smart robotics, coupled with some very nifty materials engineering, can reduce production costs enough that someone with a degree in Wymyn's Studies or Transnational Human Alignment will ever be able to afford to buy manufactured goods. Even China-based production won't be cheap forever.

I guess we'll see how that works out over the next decade or two.

Anonymous said...

Little police or military presence? They must be living in condition white.

STxAR said...

A friend of mine was there this past summer. He designs oil field products. He mentioned this one CITY was dedicated to oil production supplies. He said workover trucks were parked in every empty spot, just waiting to be shipped.

We talked yesterday about how this one district there has large lathes, and machine tools in narrow little shops. They produce smaller parts for the large factories, and live above the shops. Just rows upon rows of those little mom and pop machine shops.

I don't meet many recent college grads that even know what a machine tool is. It's really apparent that we are producing waves of grads for no known job already.

Dim horizon ahead.....

Anonymous said...

There's an interesting article in the Wall Street Journal about how cheap US oil and gas are bring lots of foreign investment in manufacturing and revitalizing existing US industry. It's behind a paywall, but maybe you can get in this way. "Trump’s Charm of Not Being Obama"

Anonymous said...

I agree that large-scale manufacturing probably isn't coming back. I wonder, though, about how 3D printing & small milling machines like the Ghostgunner are going to affect small-business entrepreneurs. Perhaps numerous small contractors making sub-assemblies for larger final-assembly-and-testing outfits? It still won't compare to the gargantuan factory complexes of our past, but it could be that technology is taking us back, in part, to Jefferson's economy of artisans.
Exploitation of our enormous natural gas reserves could help the national economy. GDP would improve, but I doubt continued production of gas will supply enough jobs to help individuals. As always, a change is coming; we just have to wait & see what it will be, & try to jump on the leading edge of it.
--Tennessee Budd

Anonymous said...

I meant to add that James Buchanan has a good point: someone has to program, serve, maintain, & repair robots & many other means of production. There are other niche industries: I'm a calibration technician, something that isn't going away unless it's outsourced, & a lot of it has to be done onsite; some of the items I calibrate are part of assemblies too large to be moved. I have a friend who services elevators. Hard to put a faulty elevator in a box & FedEx it to China or India to be fixed.
--Tennessee Budd

Will said...

If you want to know how they can make parts so cheaply there, look for videos of manufacturing. Life is cheap there, and their practices show it. When the people there force the businesses to do things properly, labor and other costs will rise. Until then, enjoy your essentially slave labor pricing.
One of the major problems there is that most of the labor has no knowledge base to work from, kind of like the idiots our schools are producing, except it's much worse. These are people right off the farm, with no industrial/technology experience to speak of. Time and good vo/tech schools will fix most of those problems, eventually.

Anonymous said...

America churned out stuff, and that kind of quantity won't happen again. But we have a crumbling infrastructure that needs to be repaired or rebuilt, and we don't have enough trained workers.

But we also need to try to re-purpose the land. I'm thinking of Appalachia especially. Coal is a dirty fuel--leaving out the CO2, it's filled with hundred of other substances, including radioactives. But the climate and variety of altitudes would seem to make much of it a promising wine country, to offer one idea.

I've always opposed it, but we might want to reconsider paying people a basic stipend for existing.