Manufacturing and assembly moving to China and other countries with even lower labbor costs iss, and has been, a symptom of our problem, not the cause. Of course the loss of jobs certainly is a big deal, and it has made our other problems worse. There is no question about that. But exactly like others have said, it is primarily the drive to maximize the short term profits, and the resulting bonuses to top managers and boards of directors, that has been the worst poison. Management greed and top management complicity, coupled with a lack of laws to impede them, have resulted in a variety of activities that should have been ilegal, and that set our nation up for multiple disasters. This had almost nothing to do with Chinese manufacturing, except that Chinese manufacturing helped provide the funds lent to provide the money for these capers. Successful Chinese manufactureing has been an enabler, not a cause of our problems. GREED is the real cause.
FRom what I could see during my visit to Dong Guang City I was able to see that there are a whole lot of people able and eager to learn everything that we know, from us. And of course, one of the best ways to teach people about technology is to have them building it for you.
As for the "made in China" syndrom? Some of the manufacturers are able to meet tight quality specifications and some are not. But all of them are willing to hold to the lowest quality level required by the customers. So ultimately production quality depends on the quality demanded, which often times is set by those who never would use the product.
To answer your question, " has China really won the global manufacturing war, or did it simply gobble up a Western Trojan horse?" I believe it is the former. China turned the corner and actually came out victorious as winner of global manufacturing. My impression of the West is that of colonialists, either direct or indirect. I am of the opinion that the export of manufacturing to China to take advantage of cheap labor (indirect colonization) has backfired on the West. The Chinese stooped (lowered itself like the descent of a bird on its prey) and conquered the West by allowing the West to foolishly ship its technology and know-how to China for "cheap labor'. Now China has put up policies to keep the manufacturing within China while laughing to the bank!!
Data4PCB, I like the way you summed up the outsourcing strategy of the last 20 years ("the only valid argument was price, price, price, but alas, not cost or even total cost of ownership"). The pain the West is experiencing now is partly a result of not weighing well the "total cost of ownership," when jobs and production are transferred overseas.
Additionally, your historical references are quite accurate. Many people cite recent only history when discussing China's role in the global economy. In the 18th Century when China (bent on isolation) turned back Western traders it was forced by militarily stronger nations (Britain, for instance) to accept conditions and sign treaties that the Chinese believed undermined their interest. One such "agreement" -- the Treaty of Beijing -- legalized the sale of opium. The Chinese were very opposed to the sale and consumption of opium in the country.
While history may serve to help us understand the past, though, it's easy to get mired in it. Right now, China and the West have to figure out a way to co-exist and restore some balance to international trade. We have to find a way out of the current mess. As a nation, China must accept that the current balance of trade with its partners is disruptive socially and economically in the West (as you pointed out clearly) but it is also unrealistic for anyone in the West to believe that we can somehow keep the Chinese out of global commerce.
What we are trying to do on this forum is come up with solutions? Any practical suggestions welcome. From the detailed analysis you presented, I have a feeling you can contribute to this and I would like to get some ideas from you on how the West-East relationship can proceed.
bolaji: When reading the comments to your article I have the feeling that some people enjoy finger-pointing. But they should remember that when pointing a finger to someone else there are three fingers pointing back to them.
People – and especially chipmunk - shouldn’t forget that when China opened its doors at the end of the 1970s, it was primarily American companies that immediately flocked into the new huge market – other countries followed fast. They passed on technology for free and the Chinese – sensing an opportunity –took it with both hands and eventually aligned their location policy to “technology for production licences”. In previous centuries the West has screwed Asia – now it is their turn, the other way around.
The greed to buy cheaper and cheaper and to outsource everything results to the fact that when all jobs are sourced out of the country there is nobody left with an income to buy. The American statistics of unemployment and poverty in God's own country are talking loud and clear. Walmart is buying about 2% of all Chinese exports!
The short-term view to the bottom line at the end of the next quarter (disguised as ‘shareholder value’) doesn’t allow any longer a view to the long term aspect which should be the survival of the company. And for the benefit of chipmunk: China wasn’t the reason for the financial crisis, this have been American banks (sub-prime crisis) which weakened the rest of the world. It is true that some European countries have lived much beyond their means but without the first (American made) crisis they would have been (perhaps) in a better situation to weather this storm.
The interesting part in the recent events is that American rating companies are judging countries against which – at the same time –they place their bets for their negative performance. And China? They are quite good capitalists –and always were. Looking back in history, the “Middle Kingdom” was the navel of the world at that time – and they are going to be it again. The world – dominating period of America is coming to an end, Europe has lost its predominance already last century and now it is Asia's turn.
The answers to some of the comments seem to be: “if we do it, it is free trade, if they do it, it is dumping”. We shouldn’t forget: 50 years ago it was Japan, followed by Taiwan and Korea and now it is China. The products we are buying from China have killed a lot of industries, companies and jobs in the West. The reason for this is that for about two decades the only valid argument was price - price-price (but, alas, not cost or even total cost of ownership). All additional charges (duties, customs clearing, quality, inventory, financing, etc.) haven’t been booked at the expense of the procurement account but in various other accounts, so that the real costs never have been known. In Europe (and perhaps as well in America) we slowly now come to the insight that this has to change as consumers are becoming more critical.
Yes, Bolaji you are right. The investors need a direct involvement to the local market for selling their products. However, I think Chinese people or governments are not that much keen in foreign products or any local products from foreign companies. So that options are always ruled out.
your feeble attempts at humor are weak substitutes for any reasoned defense of your persistent cheerleading for China and merely prove that you have no evidence to speak of - just a desire to position yourself for a BAKSHEESH from China for having played the role of their fifth columnist
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.