From: Alienthe@hotmail.com   
      
   Sourcerer wrote:   
      
   > On 25 Nov 2003 alienthe@hotmail.com wrote:   
   >   
   >    
   >   
   >>Secondly you have the problems of lead time: Far East is popular   
   >>for assembly work, yet components are still made in the West.   
   >>This means a change in the product means 2-3 weeks transport   
   >>overhead to reach your factory in China plus a similar time to   
   >>see the product appear on the shelves in the West. These 4-6   
   >>weeks cost a lot in a world where the lifetime of a product   
   >>series is about 6 months.   
   >   
   > This is true. But there is another issue. In the old capitalist model   
   > basic commodities were bought (or stolen) from the 3rd world, and   
   > shipped to the west where they were turned into manufactured commodities   
   > by industrial processes. A portion of the manufactures were sold in the   
   > 3rd world. So, for example, Ford would sell a portion of its US based   
   > production to China. Today, Ford builds a factory in China for selling   
   > cars in China. US (and European) auto workers are eliminated from the   
   > equation. With the growth of consumer credit in Asia, this process   
   > should grow. No need to ship product back to the west for sale here. The   
   > Asian market has more profit potential than the west anymore.   
      
      
   While I don't have the hard figures to back up my hunch, I do   
   have the impression that consumers in China are still in the   
   early stages of development, shall we say. Ordinary cell phones   
   that are cheap in the West cost of the order of a month's income   
   for most consumers in the cities.   
      
   Thus I believe most goods manufactured in China are for   
   Western consumers while the Chinese are targeted from the   
   highest earners first, then downwards. In 5 years time all   
   this may have changed totally.   
      
   >>This is a well known issue to anyone who has had anything to do   
   >>with production but nearly unknown with the kind of management   
   >>that, true to fashion, "abstract themselves above implementation   
   >>issues". It seems very few production oriented or skilled leaders   
   >>are left in the West. A few exist and it is this kind that makes   
   >>it still possible to produce PCs in Germany, with profit.   
   >   
   > Do they make PCs or just assemble them?   
      
      
   I don't have the article here but from what I can remember   
   they assembled them only; the lowest margin possible kind   
   of industry. This company was put forward as an example   
   that it was still possible to manufacture in a high cost   
   country like Germany, and still show a profit.   
      
   > GM, for example, does not make profits selling cars. It makes profits   
   > financing the purchase of their cars (credit). It might even be cheaper   
   > to manufacture the cars in China and ship them here for sale at a   
   > profit. Considering soybeans are the USs number one export (along with   
   > forest, agricultural, and mining products), we might see a complete   
   > reversal of the old capitalist model, turing the west into the new 3rd   
   > world exporting natural commodities in exchange for the manufactures of   
   > Asia.   
      
      
   Everything I read about China tells me that the US-China   
   relationship will be like the US-Japan relationship of the   
   1990's multiplied by 10. The trade imbalance is growing   
   already and now even Japan is returning to its former   
   financial self and has already started buying up US debts.   
   Both would like to see the US spending big time but also   
   at the same time be certain the US will be able to pay off   
   its debts.   
      
   ==<)   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)