I agree--China wants to isolate its fate from the rest of the world's (ROW) and I don't think that's possible. And trade is heavily skewed in its favor. But I also think ROW still wants to buy cheaper goods. Short-term, a trade war will hurt consumers at the worst time possible--at least in the U.S. with unemployment so high.
U.S. manufacturers went to China willingly, and I still think it is up to them to change their strategy if China is no longer working in their favor.
I think the mood is summarised by what transpired at the IMF annual meeting recently.The treasure secretary chose to bash China’s unwillingness to allow the yuan to rise. China is on the offensive targeting the expected "Quantitative easing" as being problematic to world economy. China's excess reserve, expected to hit $ 3 Trillion by 2011, and the currency control is no doubt distorting the world trade scenario, however, what I find interesting is how the policies in developed western economies can impact the global scene. I mean, if the Fed resorts to minting money and buying bonds, it just might swamp emerging economies with excess capital inflow and end up destablising them. I would like to hear what you guys think.
Barbara, We all may not want, like or encourage it but a trade war with China is inevitable if no changes are made. The balance of trade currently is too weighted heavily to one side and the social impact is beginning to put pressure on everyone in the West negatively. Just because China never promised that it would do anything other that act as a closed society does not mean we accept the continued hollowing out of jobs in the West. The price of such an approach to this problem is political and social upheaval. Does anybody in the West want that and does it bother China's government that instability may be the result of its economic policies at the overseas customers.
What's the solution? Chinese officials must begin to accept that their country's future is tied to the success of its national business partners and respond accordingly. They cannot continue to shut off parts of their society and keep their currency artificially high and not expect the West to demand and insist on reciprocal terms. Of course, China can ignore the West and maintain its current stance. It will find out soon enough the sentiments and concerns against its currency policy run deep and could hurt it on a longer-term basis.
Dave and Bolaji--right on. Those are the questions at the heart of the matter. Numerous blogs and comments on our site and others indicate the massive move to China was too quick and in many cases not well thought out. But many in the U.S. continue to blame China for our poor planning. China's is not an open market; its policies are protectionist and it continues to throw red tape at foreign companies that want to do business there. I don't recall China promising otherwise--I think we expected it would fully embrace our notions of capitalism and act accordingly. Turning the tables and fighting back with tariffs is not the right thing to do--the U.S. needs to look inward for the solution--not "penalize" a country that is taking advantage of its current good fortune. What country hasn't done that at one time or another?
Dave, You asked all the right questions and there are many people in governments worldwide and at various companies wondering how best to answer these. In my opinion, we put the cart before the horse in the rush to embrace China decades ago. Twenty years or more ago, few people cared about why a comprehensive approach should be adopted with regard to the transfer of production and raw material sourcing to China. I recall working at a magazine called Asia Inc. in Hong Kong in 1993 and wondering how the wholesale transfer of not only production but also business intelligence from the West to China was going to turn out. It didn't feel right to uproot everything from one location and move them to another without thinking of the long-term cost.
I explored the above because this is what lies at the root of the engagement discussion currently with China. Governments and companies are now wondering if they moved too quickly in shifting production and the procurement of raw materials to China without requiring a similarly beneficial response from the Chinese government. It is probably too late right now to redress this unless we want to put the global economy in a chokehold.
I think the questions you asked are best treated in a column and I would like to do that later this week and give the rest of our readers a chance to dive in. Perhaps you could treat it yourself in a message board posting.
Hi Bolaji, a trade war may be inevitable in the future.Do you think China has been playing fair since its entry into the WTO nine years ago?What are your thoughts on how Beijing treats outside competition when it comes to penetrating its domestic markets?
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.