Thread: End of cheap China goods?

Originally Posted by chassisman

Like we didn't know this would eventually happen. On the bright side, could this spur an American rennisance of US manufacturing? If the goods are going to cost as much or close to what American made would, why not fire up the assy lines?

The Associated Press: Companies brace for end of cheap made-in-China era

another thought...........will the Chinese be tempted to keep retail prices down by sacrificing quality?

Probably not. The Chinese would simply create business ventures with Russia, the next cheap labor products galore, and use it to maximize their productivity instead of pessissism and/or protectionism. Besides, manufacturing jobs have been declining for decades now in most countries, including China.

Originally Posted by chassisman

Like we didn't know this would eventually happen. On the bright side, could this spur an American rennisance of US manufacturing? If the goods are going to cost as much or close to what American made would, why not fire up the assy lines?

The Associated Press: Companies brace for end of cheap made-in-China era

another thought...........will the Chinese be tempted to keep retail prices down by sacrificing quality?

All that is happening there is China rising in the production chain. Like Japan did already earlier on.

They are on the brink of pushing into more sophisticated areas of production. At the same time they will have to be prepared to loose over time the totally cheap labor jobs.

If they are doing it right, they will join the rank of developed countries that way. Success is not granted however but chances are good.

The belief that American industries would miraculously regain the Chinese cheap labor market shares is ill judged. What is much more likely is that Africa will find a way out of the current misery and get the chance to rise to become the new worlds factory, making the cheap work for Chinese companies.

Like any society, as the Chinese become richer, they send their children to higher education. So high end goods start being developed., and then they're competing alongside us. They're not there yet, but they are heading in that direction, and quickly too.

Originally Posted by Slartibartfas

What is much more likely is that Africa will find a way out of the current misery and get the chance to rise to become the new worlds factory, making the cheap work for Chinese companies.

Not going to happen.:rolleyes:

I could list a few politically incorrect reasons why that won't happen, but I will resist the temptation.

Besides, the average IQ in Africa is around 70, among their most populous race.
Race differences in average IQ are largely genetic

see also IQ and wealth of nations.
IQ and the Wealth of Nations - Wikipedia, the free encyclopedia

I'm sure there will be an urge to classify me as a racist. However, I can assure you I am simply a realist.

Originally Posted by chassisman

Like we didn't know this would eventually happen. On the bright side, could this spur an American rennisance of US manufacturing? If the goods are going to cost as much or close to what American made would, why not fire up the assy lines?

The Associated Press: Companies brace for end of cheap made-in-China era

another thought...........will the Chinese be tempted to keep retail prices down by sacrificing quality?

There are several factors that keep Chinese goods cheap, low wages is one, increased wages could be compensated for by higher productivity, and the Chinese have a lot of room to improve productivity.

A huge factor is the cost to ship to market, and that is where the world price of oil is critical. As the dollar slides and the price of oil goes up, the cost to ship goods to the US rises, which helps locally manufactured goods.

The other thing that might revive US manufacturing (but not necessarily generate large numbers of jobs) is robotic manufacturing, robots will eventually be the cheapest labor in the world, that creates some well paid tech jobs servicing the bots, and it creates huge advantages for locating manufacturing close to raw materials, cheap power and retail markets.

Extreme poverty is like a magnet for labor.
The more Chinese people get out of that desolate poverty, the less ability that "magnet" can attract.
Some really insightful things are said above..

1) Russia...if it can be possible to trust Russia (this more than anything makes people wary of doing business with them) then they are certainly a candidate for the next location of cheap labor. In fact China is importing Russians to work in Chinese factories.
2) Robotics and software automation. Goober has a great point there...automation has a high initial cost...but they pay for themselves rapidly. I can speak on that from personal experience. CTP or Computer To Plate technology took a strong foothold in printing about 10 years ago - now EVERY printer of size has the technology or they are closed. In my shop, through both software automation and the CTP devices themselves we have spent about $320,000 in the last 6-7 years but it replaced 5 employees at a cost of about $200,000 per YEAR.

As transportation continues to rise - location will begin to overtake cheap human labor.
Take UPS and Fedex - there is no question that their rates will increase as soon as the economy begins to come back. They are simply making too thin of margins to continue as they are.

Originally Posted by funthea

Not going to happen.:rolleyes:

I could list a few politically incorrect reasons why that won't happen, but I will resist the temptation.

Besides, the average IQ in Africa is around 70, among their most populous race.
Race differences in average IQ are largely genetic

see also IQ and wealth of nations.
IQ and the Wealth of Nations - Wikipedia, the free encyclopedia

I'm sure there will be an urge to classify me as a racist. However, I can assure you I am simply a realist.

Funny how time changes things. Africa is a long ways from where she needs to be and I can easily agree with you. For now. 200 years from now? Who knows. A lot can happen.

Originally Posted by chassisman

Like we didn't know this would eventually happen. On the bright side, could this spur an American rennisance of US manufacturing? If the goods are going to cost as much or close to what American made would, why not fire up the assy lines?

The Associated Press: Companies brace for end of cheap made-in-China era

another thought...........will the Chinese be tempted to keep retail prices down by sacrificing quality?

The good thing is it could mean jobs coming back to America. The bad thing is that low income folks may not be able to afford the things they need. This is a complicated issue.