Move Manufacturing
China has become the defacto manufacturing king in the world. This has skewed the balance in world order. The greed of the business class for more profit as well as politicians world over selfishly pursuing their interest over the country’s interest has led to this situation. Slowly the balance need to be restored. for example: https://www.japantimes.co.jp/news/2020/04/09/business/japan-sets-aside-¥243-5-billion-help-firms-shift-production-china/#.XpNa8yVlCaM I want to know what the smart folks of blind think about this topic.
Depends by what you mean of manufacturing. Clothes and shoes? It's lower cost to move it out of China compared to higher manufacturing. Apparel and textiles already are slowly migrating to different countries for years now given the increase in wages. Higher tech (chips/semiconductors/screens/heavy industry) will take much longer to move out and if companies have invested recently it doesn't make sense to move out if they haven't recouped their investment. That being said can you move manufacturing back to the developed world? It's possible but I'd imagine the industry and type would be very selective. I'm sure more companies would want to invest in medium size nation's where they have more influence over the countries policies. One reason people are in flames about China is the lack of ability to control or influence the government.
Thank you this is insightful. Also liked your classification based approach. Definitely there is a difference between low and hi-tech industries. Am not talking about just the developed world. There are many countries in Asia like Vietnam, Pakistan, India or Latin American countries like Brazil etc or even east European countries where there will be significant cost benefits if that is what we are focussing on. In the developed world automation would be the way to go. Personally, I love and respect the Chinese. This is not to be disrespectful or vindictive towards them. However I believe a balance is good for everyone.
I agree there are other countries to go to. Vietnam is taking on more sophisticated tech manufacturing for almost a decade now but it's smaller population means less output. Do you want to invest there? And if you do how do deal with the output issue? How many governments do you want to deal with? One or 5? You've now increased complexity. Eastern European countries may not be the best given the aging population. The Chinese are becoming more rich and the age of sweatshops is over. India is a good candidate and agree with the list of other countries. Indeed, companies didn't care that China was communist in name so I don't think that will be an issue for them.
I have done overseas manufacturing before. It’s not always about the cost. The quality of items that are built in other places, such as latin america, are way subpar compared to Chinese ones. We always say Chinese stuff is bad, but wait until you see things built at other developing nations. There is a reason why China is still the manufacturing hub even though their wages have increased. FYI: I am not Chinese, nor related to CCP.
If stating a non-populist narrative makes you Chinese/CCP that is sad. Thank you for sharing. I was not aware of quality issues. But these are fixable I believe.
Sure it's not just about cost. Couldn't you train and create better QC in Latin America?
Great idea. Your next adventure is to make shoes in a American factory and make $5 an hour.
Accelerate automation and you won’t need China anymore. Low skilled manufacturing can move to cheaper countries. Skilled manufacturing will be mostly replaced with machines and will come back to their country of origin.
Making semi conductors is a fairly automated process but you still need heaps of money and people to do it and watch the machines.
You need more money than people for fabs. Each fab is easily a billion dollar investment. Tariffs will change the dynamic of where these fabs are built in the future. And then there’s the counter tariffs as well, so fabs will be built in countries with favorable trade deals which is likely neither China or the US.
Folks who are voting for the Manufacturing in China option what is your rationale. I get it if you are Chinese 😁.
I don’t want to pay $3000 for an iPhone or $300 for my underwear.
Don’t be ridiculous
Resistance is futile. You will be assimilated.
Why do you say so?