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Why China won’t own next-generation manufacturing

178 points by endswapper 10y ago

wrong_variable 10y ago
Keep Dreaming. China has made it a national priority to provide better standard of living to their people then the West. ..With rising salaries, labor unrest, environmental devastation and intellectual property theft, China is no longer an attractive place.. How are these things bad ? China has their own class of capitalists now - they no longer need wall street to finance their projects. China may have bumpy roadblocks - but at the scale they operate - financially, manpower and political will. It sort of doesn't matter. Its like a elephant worrying about what an ant thinks. Any issue that china faces - they seem to figure out how to overcome it. In the EU we cannot even figure out how to get our currency right - even though modern finance started here. China made all the right decisions when it comes to Keynesian economics. And sure they have a lot of debt - but the losers are the banks who are lending them money. Who is going to knock on China's door to ask for their money back ? China can afford to waste 1 million of their own engineers to just beat Airbus. That is the scale at which they operate. Just like how Stalin was able to screw up so many times. I have meet a lot of Chinese students - and if they were good at English and didn't grew up with the great firewall. Silicon Valley wouldn't prolly exist. Software is the only industry where I have seen American and Indian be better than the Chinese - but its a very anecdotal observation. You do not have to do a lot of analysis - just listen to a few episodes of Dan Carlin's hardcore history. For most of history China dominated economically and technologically. Just because Europeans had better war technology ( due to the fact that europeans were do divided ) were we able to dominate for a few hundred years. We are going back to what normal looks like. Edit: I am not some chinese shill, my personal opinion is china should be punished for crushing other countries through unfair trade practices. The free market doesn't work if there are companies that have the backing of a state with 1.3 billion people ! China would probably dominate even without the massive financial backing of their state banks. But the aggressive nature of their expansion is worrying. American's are still protected - you should ask the peripheral countries about the effect of the rise of China to their economies ( Vietnam, etc ) why do you think Obama is trying to push the TPP ? China also worries me because they are showing that democracy doesn't matter, when it comes to wealth creation.
- tonyedgecombe 10y ago
  "Any issue that china faces - they seem to figure out how to overcome it." Apart from running a democratic and open society.
  - gaius 10y ago
    You have it backwards - they see "a democratic and open society" as a problem they have overcome.
    - vbezhenar 10y ago
      USSR was destroyed by stupid government. I'm not sure about western countries, but democracy might have some tools to prevent stupid presidents to do heavy damage (I'm not sure how exactly, but whatever). So the question is, whether Chinese society was able to build a tools to prevent stupid government to ruin everything. After all, Chinese was terrible poor country not so long ago and for many years. How are they going not to repeat the same mistakes? Western world believes in democracy (at least some people do), but it's not generally accepted truth. I think that democracy is stupid, though I don't have anything better to offer.
      - gaius 10y ago
        I think that democracy is stupid, though I don't have anything better to offer It was Winston Churchill who said that democracy is the worst system of government, apart from every other system that has ever been tried.
        sangnoir 10y ago
        I think Culture-style benign dictatorship is a better system than democracy, but hadn't been practised yet. As currently practised, democracy tends towards bureaucracy and short-term thinking (projects small enough to fit in a term).
        10y ago
andrew_wc_brown 10y ago
Have to enter email to read? Forget it.
- endswapper 10y ago
  Works fine here with no email, no login - not a subscriber.
- sndean 10y ago
  When I click to read it redirects me to subscribe.washingtonpost.com. Probably because I've read to many WaPo articles recently... Opening the link in incognito mode works.
  - bubo_bubo 10y ago
    If you hit the 'stop loading' button early enough, the stuff you're talking about doesn't have a chance to load. It's slow enough to do this because web pages load enough crap to run a Quake game.
    - sndean 10y ago
      Thanks, that worked. You're right, it's surprisingly slow.
austinz 10y ago
"Advanced manufacturing requires management and communication skills and the ability to operate complex information-based factories" is meaningless consultant jargon. It would have been better to explain exactly what about advanced manufacturing makes it so special that it requires 'management' and 'communication' skills that the managers and workers in non-advanced factories apparently lack. Meanwhile, "ability to operate complex information-based factories" is almost a tautology. Maybe talk about industrial IOT, or what specialized skills are necessary to efficiently operate a factory full of robots, or _something_?
- crdoconnor 10y ago
  MBAs pretending they're special snowflakes rather than a waste of money.
madengr 10y ago
America doesn't need to ship electronics components over to China for manufacturing (into larger products). Those components are already made in Asia, and they have raw materials too. I believe it really boils down to having a large enough middle class to afford advanced manufactured products. If those products don't require labor to manufacture, then who will earn enough to buy them?
my_first_acct 10y ago
The article is by Vivek Wadhwa [1]. One quote, which doesn't quite make sense to me: "Even though China is graduating far more than 1 million engineers every year, the quality of their education is so poor that they are not employable in technical professions." Not even one of them is employable? The author is clearly knowledgeable, so I wonder if this is an editing error. [1] https://en.wikipedia.org/wiki/Vivek_Wadhwa https://en.wikipedia.org/wiki/Vivek_Wadhwa
- cududa 10y ago
  The only accurate prediction he's ever made is that Groupon would collapse
- seanmcdirmid 10y ago
  It would be reasonable to say a small percentage is employable or are globally competitive. Many tier 3 schools have CS programs that are completely bogus.
- chvid 10y ago
  That statement is clearly not true. And what is worse is it is apparently from one of his own studies!
riotdash 10y ago
This is just normal phase Europe, US, Hong Kong have faced long time ago. Transformation from product factory to service society. What the article said about quality of Chinese engineers is unfortunately true, however easter part of China (Shanghai, Jiangsu-province, Beijing, Shenzhen) have tens of millions of excellent quality ones which are comparable with their western counter parts. What's probably going to happen is that East China is going to keep on advancing and getting rich (and developing to the level of Europe and US) while other parts of the country stay poor. I'm software engineer based in Helsinki, Finland and Shanghai, China.
rgbrenner 10y ago
I don't follow this line of thinking at all. What's the argument here? That Chinese can't learn how to manage certain things? That they can't improve their educational system? Does anyone seriously think this is true? And then to end with, well even if they do, we can just import their robots. Ok.. then wouldn't they "own next-generation manufacturing" if they are the ones making the tools, pushing what machines are capable of, etc. I mean, does the writer really think we can dominate next-gen manufacturing if we don't even make the tools? What's our competitive advantage then?
- agentgt 10y ago
  I have to agree. The other thing the article fails to mention is how China has invested heavily in other resource production like rare earth metals which are needed for robots and just about all modern things. They could price gouge us at any moment and they know it. And when they do it will take us forever to build these mines / plants. That's the thing the article also gets wrong. It takes time and money to keep up and to even copy (robots). I really can't agree with much in the article.
  - seanmcdirmid 10y ago
    They haven't invested in rare earth production so much as they have sacrificed the environment significantly for it. The article is bunk, but I totally expect China to be a barren toxic wasteland if they don't change their export-oriented development philosophy (and they haven't, inspite of what Xi is saying these days).
  - Animats 10y ago
    "They could price gouge us at any moment and they know it. And when they do it will take us forever to build these mines / plants." They tried. It didn't work. Molycorp got the Mountain Pass rare earth mine in California going again, with pollution controls that satisfied even the Sierra Club. Another company got a mine going in Australia. Techniques were developed to reduce rare earth consumption for motors. Rare earth demand dropped. Price crashed. China gave up on restricting exports. Molycorp went bankrupt, but the Mountain Pass mine is still there, although not running. It's for sale. Want to buy the world's most advanced rare earths mine?
Joof 10y ago
They have resources, land and an interest in local manufacturing. Chinese software engineers are good enough for Baidu (and have big names like Ng to help them get up to speed). Even in America, we recognize that Chinese (and other asian cultures) are often better at a wide variety of academic subjects. Their great firewall and isolationism forced them to build their own software and it appears to work well. I'm convinced that some percentage of their enormous population can work in engineering as well or better than our engineers. Don't underestimate China.
- seanmcdirmid 10y ago
  Many Nobel prize winners have been Chinese, only one was a citizen of the PRC when they did the work/received the award. China's problem isn't it's people, but it's crazily dysfunctional government that wastes it's tremendous human capital.
  - sangnoir 10y ago
    > Many Nobel prize winners have been Chinese, only one was a citizen of the PRC when they did the work/received the award Is that statement supposed to inform me about the shortcomings of the PRC, or those of the Nobel prize? I can't tell.
    - seanmcdirmid 10y ago
      It is supposed to inform you of the achievement of the Chinese people, and not to conflate them with the Chinese government.
- jonnybgood 10y ago
  > Even in America, we recognize that Chinese (and other asian cultures) are often better at a wide variety of academic subjects. That sounds a lot like that Asian stereotype. Excelling in school and excelling in research are two different things.
  - Joof 10y ago
hacknat 10y ago
Sounds like this article is bunk from the comments, but I have simple answer for why they won't own it, or at least why it won't even matter: Automation. With automation eating labor to the core, the supply chain (cheap as it is, though time in the supply chain costs money too) will be the next thing to be eaten. I think we're going to see a much more distributed model of manufacturing in the future and it will involve precious little labor.
- tingbadimalo 10y ago
  This is actually precisely the point of the article
- yourapostasy 10y ago
  The US offshored so much of its manufacturing, I have to wonder if there is sufficient critical mass of knowledge, people, infrastructure, etc. left to effectively automate. Or if American firms will instead buy solutions from Chinese automation companies, and the US ends up ceding the large-scale (or even decentralized distributed-scale) automated manufacturing future to China as well. This could leave the US performing very high-end manufacturing requiring lots of labor input, but what happens when what the Chinese firms learned with automation in the lower-end manufacturing is used to encroach on this high-end? Bunnie Huang pointed out the very ecosystem of lots of manufacturers in close physical proximity to each in China other enables them to try different ideas, failing fast and cheaply (the dual SIM feature came out of such freewheeling experimentation). Can the US automate if it has gaps in its own manufacturing capabilities having let it atrophy for so many decades, or are US business leaders assuming a future where they are always purchasing "lower-end" manufactured parts from the next China (and if they are, how are they ensuring those "lower-end" manufacturers don't climb up the value ladder and take their market from them)?
  - hacknat 10y ago
    It's an interesting hypothesis, but it presumes all engineering for manufacturing is done in China, which is usually not the case. It was my impression most manufacturing in China is "offshored" by American firms. I have no idea what the actual stats are though, so it'd be tough to say one way or another.
cannonpr 10y ago
Isn't this article just another sign of western/US based interests feeling like they might have already lost the race ? It feels far more like a 'feelgood' article to prevent panic and to reinforce propaganda of western superiority for the masses, I just can't view it as a structured argument...
Animats 10y ago
China's "manufacturing engine" has not "largely stalled". Here's China's GDP growth.[1] 6.7% annually this year, down from 7.9% in 2023. The US is 2.2%. China is not "stalled". If you want numbers that can't be faked, inbound container counts at the port of Los Angeles are up. The claim that "75 percent of all robots used in China are purchased from foreign firms" only makes sense if you count Hon Hai/Foxconn as "foreign". HQ is in Taiwan, but Foxconn has over a million employees in China. Their Foxbot robots [2] are being produced at a rate of 20,000 per year. The US only has 26,000 robots total, mostly in automotive.[3] Foxconn claims they have good enough robotic precision now to use their robots to make iPhones. The article is really a rehash of a paper by Dieter Ernst.[4] The "manufacturing decline" in China reflects layoffs in mining and metals. Those are both industries where even basic mechanization cuts the number of employees enormously. Those industries were mostly state-owned, and were oversized and overstaffed for the demand. About a third of China's state-run firm jobs (30 million) disappeared between 1998 and 2015. Ernst writes "Outside of mines and minerals, manufacturing apparently continues to act as an employment absorber." That's not manufacturing decline; that's modernizing the steel industry. (More high-quality stuff, less rebar, fewer workers, less pollution.) Ernst complains that the 13th Five Year Plan isn't specific about how new jobs will be created. He points out that salaries for college graduates seem to be declining, and unemployment rates for college graduates are up. This matches US experience. There's the usual complaint about not enough pre-trained vocational workers. However, companies in China are used to having to train their people - after all, many are right off the farm. The article has a picture of "carbon fiber silk thread". There is no such thing. There is, however, a stock image from Getty Images miscaptioned that way. It's a typical Vivek Wadhwa article, written to get attention. [1] http://www.tradingeconomics.com/china/gdp-growth-annual http://www.tradingeconomics.com/china/gdp-growth-annual [2] http://www.scmp.com/tech/innovation/article/1829834/foxconns-foxbot-army-close-hitting-chinese-market-track-meet-30-cent http://www.scmp.com/tech/innovation/article/1829834/foxconns... [3] http://www.ifr.org/industrial-robots/statistics/ http://www.ifr.org/industrial-robots/statistics/ [4] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2820433 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2820433
- arnorhs 10y ago
  that's a really insightful and well written response. except for the ad hominum at the end. that felt distasteful.
tlb 10y ago
One way to create controversy is to say something that's true, but many people don't accept and will therefore argue with. Such journalism can push the world forward by calling attention to mistaken ideas. This article, like many by the same author, might be dubbed 'wrongtroversial'. That is, it creates controversy by saying something wrong. Wrongtroversy is far more scalable. It's very hard to discover something that is: (a) true (b) not widely accepted (c) not recently mentioned by other journalists. But if you drop condition (a), you'll never run out of ideas. The most effective wrongtroversial articles assert something that's wrong for several different reasons. People will then proceed to argue with each other about which reason is more important, generating follow-on controversy. Credit to @pg for coining this term.
- HillaryBriss 10y ago
  wrongtroversial. great term. great explanation of it. thanks. But -- I don't seem to be able to find Paul Graham's creation of this word thru a google search. Any pointers?
- chvid 10y ago
  Great term. But I really wonder how can you have an academic career and then write stuff like this?
  - cJ0th 10y ago
    even academics do have to eat occasionally.
- crdoconnor 10y ago
  If a business journalist or economist writes about robots it's usually breathlessly optimistic, technologically illiterate, wrong and usually sneaks in a whinge about unions and entitled workers. This article isn't an exception.
- rglovejoy 10y ago
  But why is it wrong?
- 10y ago
deleted 10y ago
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thedonkeycometh 10y ago
Same old tired racist rhetoric. Yawn.
thedonkeycometh 10y ago
Same old American rhetoric. "Oh, the chinese are only good at copying. They can never create". Yawn.
- bubo_bubo 10y ago
  I've seen the same stupid crap said about the japanese, koreans, etc., over the past 40 years. The story remains the same: Corporate US management sits on its hands and watches the rest of the world innovate. Because thinking is too hard and investing in R&D and capital equipment is too expensive.
sandworm101 10y ago
No mention if China's other headache, the fractious legal system. Things like land title, equity rights or non-expropriation (government's taking/buying private assets) are centuries old doctrine in the west. Those looking to invest billions into 'next-gen' manufacturing facilities want legal stability, stability measurable in decades. China isn't there yet.
- bubo_bubo 10y ago
  "Things like land title, equity rights or non-expropriation (government's taking/buying private assets) are centuries old doctrine in the west. Those looking to invest billions into 'next-gen' manufacturing facilities want legal stability, stability measurable in decades. China isn't there yet." There are stories in the news from time to time about situations where you have an old woman who's been living in the same place for decades (see the movie "Up" for a fictional example), and she's the last person on the land to accept payment for the land and move. The builders - either a company or the government, wind up having to build around. The way they do it is very passive-aggressive, but there /is/ law over there when it comes to land ownership. It's not all state property. Further, do you really "own" your land here in the US? Nobody I know does. You either pay rent (taxes) to the government on the land or the land is taken from you. There is no such thing as totally private land ownership. WRT manufacturing plants: Every new company in China has to be majority Chinese-owned. The government has smartened up over the decades and left behind the "everything is owned by the state, even your toothbrush" to something in between total private ownership and public ownership. So they have rules like the above which anger US investors, but are geared to the interests of the Chinese public. They take care of their own. We used to do that here in the US, but it's all become "fuck you, the free market fixes everything!!!" wharrgarble.
  - sandworm101 10y ago
    >> Further, do you really "own" your land here in the US? Nobody I know does. You either pay rent (taxes) to the government on the land or the land is taken from you. Don't get legal theories from fringe websites. That line of thinking is a stone's throw from "US citizens don't have to pay taxes" and "Driver's licences are unconstitutional". Such websites are what got Wesley Snipes in so much trouble. Read some actual legal texts at your local law library Property ownership is a thing in the US (and canada, france, the UK and the rest of the western world). The government cannot take your land without full value compensation, even if you don't pay your taxes. They can condemn your land and sell it to pay your debt, giving you all that is left, but that is a long legal process where the rights of the landowner are given much consideration and ample opportunity. They are not a landlord reclaiming property.
jcbeard 10y ago
I agree with the headline, but I'm not sure I agree with the reasoning. Manufacturing is increasingly robotic, however it's also increasingly mobile, and scalable. In the not so distant future I think various forms of 3D printing will take over manufacturing. You'll have your small home units and large almost entirely automated industrial units building more complex objects. Why would this happen? Labor costs are beginning to rise in China. As are costs in other parts of the world. As costs rise, seems like the distance becomes a huge factor. Manufacture locally, distribute locally. Now the question becomes how to employ the worlds populace.... Also related/interesting: https://www.ted.com/talks/olivier_scalabre_the_next_manufacturing_revolution_is_here?language=en https://www.ted.com/talks/olivier_scalabre_the_next_manufact...
endswapper 10y ago
This is important because ethical, sustainable manufacturing is foundational to a sustainable economy. I don't think any single entity - country, company, person should "own" manufacturing. Some of the other comments touch on this, but manufacturing has far broader implications for the domestic middle class (whatever country you're in) as well as for the environment. Manufacturing jobs as we remember them - Roseanne at the plastic utensil factory, nor as they are - assembling iPhones, are not next-gen manufacturing jobs. Those jobs will be designing, building and maintaining automated industrial productivity. I think manufacturing gets overlooked because it is not relatable and not sexy. However, it is incredibly cool. There is a significant opportunity for innovation with tremendous social and environmental impact.
rdlecler1 10y ago
The question really boils down to: will people be buying goods from Chinese companies or US companies. If the former, then manufacturing will likely be in China. If the US, then it doesn't make sense to outsource automated labor to China just to ship it all back to the US while simultaneously risking IP theft. Chinese consumers will likely buy Chinese made goods or foreign luxury brands. In the US people are more likely to buy US branded goods.
known 10y ago
With rising salaries, labor unrest, environmental devastation and intellectual property theft, China is no longer an attractive place;
known 10y ago
"China is now low-cost, high-quality" --Jack Ma
deleted 10y ago
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bubo_bubo 10y ago
OK, so let's say that a Chinese company moves its stuff to the US. As a former toolmaker, (you can guess why) I have to say "why would they do that?" They would have to invest in training for people to be toolmakers, millwrights, etc. - the trades closely related to engineering (toolmakers do both design and machining, for example) that have gone stale in this country because there are no jobs and no apprenticeships for people to learn them. These are the skills needed to make tools for the assembly lines. And we don't have them any more. You need someone on the shop floor to debug the tooling and that person is still in China. All the skill is now in China. It's not coming back. So neither is the manufacturing. If you have a A.T. Cross pen, please chuck it in the ocean. Yes, I'm pessimistic and angry. Because I saw an entire industry get gutted just so a few at the top can have more.
SaveClyde 10y ago
Big question is if the manufacturing moves back to US...will China allow US imports. This will be interesting, every country might start their manufacturing operations and I believe the big winner will be the one manufacturing robots :)
IANAD 10y ago
For many years additive manufacturing printers have been getting better, but slowly. In most cases, the printing process has leaned heavily on people and software for addition of part supports and other part modifications, and a good 3D manufacturing team will include experienced personnel; it's not easy to replicate. While large companies typically mass produce, there are certain parts that cannot be made via traditional manufacturing processes. They've been using additive manufacturing typically for tooling and higher-end products in these cases. Also, there is a trend towards customization, faster iterations of part design, and using a variety of part materials within each additive manufactured part that each have their own qualities. But, printer manufacturers have seen opportunity in making the printing process faster and easier to use, which over time will reduce the need for all of the people involved in the process. Already some of the latest printers are autogenerating supports and making it simple to remove those supports. That's just a small part of the process, but it is a significant step. So, while traditional mass manufacturing companies will be hurting in a decade or two, eventually printers will no longer require humans to be involved at all. Then, any company with enough money to buy a large number of printers could manufacture 3D parts at mass scale. I think it is premature to say that China won't eventually own next-generation manufacturing eventually, but it won't in the next few decades unless they drop everything and get on it.
asitdhal 10y ago
the author has completely ignored the fact that Chinese skill improves over the years, Americans grow, but Chinese grow faster.
eggy 10y ago
Yes, robots do the same in China as they do in the U.S.A., BUT you still have to pay a human to turn on the lights and start or stop the robots. In the U.S.A. it will cost you 4x more I am guessing for this person. They are not just sticking to manufacturing. China holds the number one spot in Supercomputers as of June 2016 with Sunway TaihuLight, which displaced another Chinese supercomputer Tianhe-2. The Sunway also uses no U.S.A. hardware. [1] China also just announced a 64-core Arm processor Phytium that if confirmed "will be the most powerful Arm server chip on the planet." [2] [1] https://en.wikipedia.org/wiki/Supercomputer https://en.wikipedia.org/wiki/Supercomputer [2] https://www.top500.org/news/chinese-chipmaker-unveils-speedy-64-core-arm-processor/ https://www.top500.org/news/chinese-chipmaker-unveils-speedy...
pm90 10y ago
This is a rather poorly written article. The main premise seems to be that manufacturing is being automated, China is automating manufacturing by buying robots not made in China, and since robots have the same productivity everywhere, it doesn't make sense to manufacture in China since it can be done back in the US. While saving labor costs is an important reason for moving manufacturing to China, there are other equally important factors as well. Access to a labor pool of workers that do higher level designing that cannot be automated, much lower local taxes (and even subsidies), proximity to other manufacturing centers already in China are just some of the other important reasons. I wish journalists would do a little more research before writing inane articles with sensationalist headlines.
sharemywin 10y ago
I agree that with automation production will become more and more local but the article assumes most consumption will happen in the US.
norea-armozel 10y ago
I'm not sure you can compare an existing factory in China with a non-existing factory in upstate New York. The two have very different environments to contend with. In China, they already have supply chains, investors, and customers. Whereas an non-existent or proposed factory has to set each of these up and still contend with competition with the existing factories. The only real advantage a factory that's local (like one in upstate New York) is they'll be closest to the demand for that region. So, they can attenuate their output when demand rises/lowers. But as a whole this is only a potential benefit in terms of the ecological impact (reduced over production for some products). And I say potential because some areas are better manufacturing certain products like it's cheaper to extract aluminium British Columbia where they have cheap power due to hydroelectric power than say S. America where you find the aluminium ore rich soils. Getting around infrastructure limitations won't be as easy as simply pouring more concrete. Some places just will never be able to compete and I think this is something some folks need to address in such articles.

178 points by endswapper 10y ago

Keep Dreaming. China has made it a national priority to provide better standard of living to their people then the West. ..With rising salaries, labor unrest, environmental devastation and intellectual property theft, China is no longer an attractive place.. How are these things bad ? China has their own class of capitalists now - they no longer need wall street to finance their projects. China may have bumpy roadblocks - but at the scale they operate - financially, manpower and political will. It sort of doesn't matter. Its like a elephant worrying about what an ant thinks. Any issue that china faces - they seem to figure out how to overcome it. In the EU we cannot even figure out how to get our currency right - even though modern finance started here. China made all the right decisions when it comes to Keynesian economics. And sure they have a lot of debt - but the losers are the banks who are lending them money. Who is going to knock on China's door to ask for their money back ? China can afford to waste 1 million of their own engineers to just beat Airbus. That is the scale at which they operate. Just like how Stalin was able to screw up so many times. I have meet a lot of Chinese students - and if they were good at English and didn't grew up with the great firewall. Silicon Valley wouldn't prolly exist. Software is the only industry where I have seen American and Indian be better than the Chinese - but its a very anecdotal observation. You do not have to do a lot of analysis - just listen to a few episodes of Dan Carlin's hardcore history. For most of history China dominated economically and technologically. Just because Europeans had better war technology ( due to the fact that europeans were do divided ) were we able to dominate for a few hundred years. We are going back to what normal looks like. Edit: I am not some chinese shill, my personal opinion is china should be punished for crushing other countries through unfair trade practices. The free market doesn't work if there are companies that have the backing of a state with 1.3 billion people ! China would probably dominate even without the massive financial backing of their state banks. But the aggressive nature of their expansion is worrying. American's are still protected - you should ask the peripheral countries about the effect of the rise of China to their economies ( Vietnam, etc ) why do you think Obama is trying to push the TPP ? China also worries me because they are showing that democracy doesn't matter, when it comes to wealth creation.

tonyedgecombe 10y ago
"Any issue that china faces - they seem to figure out how to overcome it." Apart from running a democratic and open society.
- gaius 10y ago
  You have it backwards - they see "a democratic and open society" as a problem they have overcome.
  - vbezhenar 10y ago
    USSR was destroyed by stupid government. I'm not sure about western countries, but democracy might have some tools to prevent stupid presidents to do heavy damage (I'm not sure how exactly, but whatever). So the question is, whether Chinese society was able to build a tools to prevent stupid government to ruin everything. After all, Chinese was terrible poor country not so long ago and for many years. How are they going not to repeat the same mistakes? Western world believes in democracy (at least some people do), but it's not generally accepted truth. I think that democracy is stupid, though I don't have anything better to offer.
    - gaius 10y ago
      I think that democracy is stupid, though I don't have anything better to offer It was Winston Churchill who said that democracy is the worst system of government, apart from every other system that has ever been tried.
      - sangnoir 10y ago
        I think Culture-style benign dictatorship is a better system than democracy, but hadn't been practised yet. As currently practised, democracy tends towards bureaucracy and short-term thinking (projects small enough to fit in a term).
        10y ago

andrew_wc_brown 10y ago

Have to enter email to read? Forget it.

endswapper 10y ago
Works fine here with no email, no login - not a subscriber.
sndean 10y ago
When I click to read it redirects me to subscribe.washingtonpost.com. Probably because I've read to many WaPo articles recently... Opening the link in incognito mode works.
- bubo_bubo 10y ago
  If you hit the 'stop loading' button early enough, the stuff you're talking about doesn't have a chance to load. It's slow enough to do this because web pages load enough crap to run a Quake game.
  - sndean 10y ago
    Thanks, that worked. You're right, it's surprisingly slow.

austinz 10y ago

"Advanced manufacturing requires management and communication skills and the ability to operate complex information-based factories" is meaningless consultant jargon. It would have been better to explain exactly what about advanced manufacturing makes it so special that it requires 'management' and 'communication' skills that the managers and workers in non-advanced factories apparently lack. Meanwhile, "ability to operate complex information-based factories" is almost a tautology. Maybe talk about industrial IOT, or what specialized skills are necessary to efficiently operate a factory full of robots, or _something_?

crdoconnor 10y ago
MBAs pretending they're special snowflakes rather than a waste of money.

madengr 10y ago

America doesn't need to ship electronics components over to China for manufacturing (into larger products). Those components are already made in Asia, and they have raw materials too. I believe it really boils down to having a large enough middle class to afford advanced manufactured products. If those products don't require labor to manufacture, then who will earn enough to buy them?

my_first_acct 10y ago

The article is by Vivek Wadhwa [1]. One quote, which doesn't quite make sense to me: "Even though China is graduating far more than 1 million engineers every year, the quality of their education is so poor that they are not employable in technical professions." Not even one of them is employable? The author is clearly knowledgeable, so I wonder if this is an editing error. [1] https://en.wikipedia.org/wiki/Vivek_Wadhwa https://en.wikipedia.org/wiki/Vivek_Wadhwa

cududa 10y ago
The only accurate prediction he's ever made is that Groupon would collapse
seanmcdirmid 10y ago
It would be reasonable to say a small percentage is employable or are globally competitive. Many tier 3 schools have CS programs that are completely bogus.
chvid 10y ago
That statement is clearly not true. And what is worse is it is apparently from one of his own studies!

riotdash 10y ago

This is just normal phase Europe, US, Hong Kong have faced long time ago. Transformation from product factory to service society. What the article said about quality of Chinese engineers is unfortunately true, however easter part of China (Shanghai, Jiangsu-province, Beijing, Shenzhen) have tens of millions of excellent quality ones which are comparable with their western counter parts. What's probably going to happen is that East China is going to keep on advancing and getting rich (and developing to the level of Europe and US) while other parts of the country stay poor. I'm software engineer based in Helsinki, Finland and Shanghai, China.

rgbrenner 10y ago

I don't follow this line of thinking at all. What's the argument here? That Chinese can't learn how to manage certain things? That they can't improve their educational system? Does anyone seriously think this is true? And then to end with, well even if they do, we can just import their robots. Ok.. then wouldn't they "own next-generation manufacturing" if they are the ones making the tools, pushing what machines are capable of, etc. I mean, does the writer really think we can dominate next-gen manufacturing if we don't even make the tools? What's our competitive advantage then?

agentgt 10y ago
I have to agree. The other thing the article fails to mention is how China has invested heavily in other resource production like rare earth metals which are needed for robots and just about all modern things. They could price gouge us at any moment and they know it. And when they do it will take us forever to build these mines / plants. That's the thing the article also gets wrong. It takes time and money to keep up and to even copy (robots). I really can't agree with much in the article.
- seanmcdirmid 10y ago
  They haven't invested in rare earth production so much as they have sacrificed the environment significantly for it. The article is bunk, but I totally expect China to be a barren toxic wasteland if they don't change their export-oriented development philosophy (and they haven't, inspite of what Xi is saying these days).
- Animats 10y ago
  "They could price gouge us at any moment and they know it. And when they do it will take us forever to build these mines / plants." They tried. It didn't work. Molycorp got the Mountain Pass rare earth mine in California going again, with pollution controls that satisfied even the Sierra Club. Another company got a mine going in Australia. Techniques were developed to reduce rare earth consumption for motors. Rare earth demand dropped. Price crashed. China gave up on restricting exports. Molycorp went bankrupt, but the Mountain Pass mine is still there, although not running. It's for sale. Want to buy the world's most advanced rare earths mine?

Joof 10y ago

They have resources, land and an interest in local manufacturing. Chinese software engineers are good enough for Baidu (and have big names like Ng to help them get up to speed). Even in America, we recognize that Chinese (and other asian cultures) are often better at a wide variety of academic subjects. Their great firewall and isolationism forced them to build their own software and it appears to work well. I'm convinced that some percentage of their enormous population can work in engineering as well or better than our engineers. Don't underestimate China.

seanmcdirmid 10y ago
Many Nobel prize winners have been Chinese, only one was a citizen of the PRC when they did the work/received the award. China's problem isn't it's people, but it's crazily dysfunctional government that wastes it's tremendous human capital.
- sangnoir 10y ago
  > Many Nobel prize winners have been Chinese, only one was a citizen of the PRC when they did the work/received the award Is that statement supposed to inform me about the shortcomings of the PRC, or those of the Nobel prize? I can't tell.
  - seanmcdirmid 10y ago
    It is supposed to inform you of the achievement of the Chinese people, and not to conflate them with the Chinese government.
jonnybgood 10y ago
> Even in America, we recognize that Chinese (and other asian cultures) are often better at a wide variety of academic subjects. That sounds a lot like that Asian stereotype. Excelling in school and excelling in research are two different things.
- Joof 10y ago

hacknat 10y ago

Sounds like this article is bunk from the comments, but I have simple answer for why they won't own it, or at least why it won't even matter: Automation. With automation eating labor to the core, the supply chain (cheap as it is, though time in the supply chain costs money too) will be the next thing to be eaten. I think we're going to see a much more distributed model of manufacturing in the future and it will involve precious little labor.

tingbadimalo 10y ago
This is actually precisely the point of the article
yourapostasy 10y ago
The US offshored so much of its manufacturing, I have to wonder if there is sufficient critical mass of knowledge, people, infrastructure, etc. left to effectively automate. Or if American firms will instead buy solutions from Chinese automation companies, and the US ends up ceding the large-scale (or even decentralized distributed-scale) automated manufacturing future to China as well. This could leave the US performing very high-end manufacturing requiring lots of labor input, but what happens when what the Chinese firms learned with automation in the lower-end manufacturing is used to encroach on this high-end? Bunnie Huang pointed out the very ecosystem of lots of manufacturers in close physical proximity to each in China other enables them to try different ideas, failing fast and cheaply (the dual SIM feature came out of such freewheeling experimentation). Can the US automate if it has gaps in its own manufacturing capabilities having let it atrophy for so many decades, or are US business leaders assuming a future where they are always purchasing "lower-end" manufactured parts from the next China (and if they are, how are they ensuring those "lower-end" manufacturers don't climb up the value ladder and take their market from them)?
- hacknat 10y ago
  It's an interesting hypothesis, but it presumes all engineering for manufacturing is done in China, which is usually not the case. It was my impression most manufacturing in China is "offshored" by American firms. I have no idea what the actual stats are though, so it'd be tough to say one way or another.

cannonpr 10y ago

Isn't this article just another sign of western/US based interests feeling like they might have already lost the race ? It feels far more like a 'feelgood' article to prevent panic and to reinforce propaganda of western superiority for the masses, I just can't view it as a structured argument...

Animats 10y ago

China's "manufacturing engine" has not "largely stalled". Here's China's GDP growth.[1] 6.7% annually this year, down from 7.9% in 2023. The US is 2.2%. China is not "stalled". If you want numbers that can't be faked, inbound container counts at the port of Los Angeles are up. The claim that "75 percent of all robots used in China are purchased from foreign firms" only makes sense if you count Hon Hai/Foxconn as "foreign". HQ is in Taiwan, but Foxconn has over a million employees in China. Their Foxbot robots [2] are being produced at a rate of 20,000 per year. The US only has 26,000 robots total, mostly in automotive.[3] Foxconn claims they have good enough robotic precision now to use their robots to make iPhones. The article is really a rehash of a paper by Dieter Ernst.[4] The "manufacturing decline" in China reflects layoffs in mining and metals. Those are both industries where even basic mechanization cuts the number of employees enormously. Those industries were mostly state-owned, and were oversized and overstaffed for the demand. About a third of China's state-run firm jobs (30 million) disappeared between 1998 and 2015. Ernst writes "Outside of mines and minerals, manufacturing apparently continues to act as an employment absorber." That's not manufacturing decline; that's modernizing the steel industry. (More high-quality stuff, less rebar, fewer workers, less pollution.) Ernst complains that the 13th Five Year Plan isn't specific about how new jobs will be created. He points out that salaries for college graduates seem to be declining, and unemployment rates for college graduates are up. This matches US experience. There's the usual complaint about not enough pre-trained vocational workers. However, companies in China are used to having to train their people - after all, many are right off the farm. The article has a picture of "carbon fiber silk thread". There is no such thing. There is, however, a stock image from Getty Images miscaptioned that way. It's a typical Vivek Wadhwa article, written to get attention. [1] http://www.tradingeconomics.com/china/gdp-growth-annual http://www.tradingeconomics.com/china/gdp-growth-annual [2] http://www.scmp.com/tech/innovation/article/1829834/foxconns-foxbot-army-close-hitting-chinese-market-track-meet-30-cent http://www.scmp.com/tech/innovation/article/1829834/foxconns... [3] http://www.ifr.org/industrial-robots/statistics/ http://www.ifr.org/industrial-robots/statistics/ [4] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2820433 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2820433

arnorhs 10y ago
that's a really insightful and well written response. except for the ad hominum at the end. that felt distasteful.

tlb 10y ago

One way to create controversy is to say something that's true, but many people don't accept and will therefore argue with. Such journalism can push the world forward by calling attention to mistaken ideas. This article, like many by the same author, might be dubbed 'wrongtroversial'. That is, it creates controversy by saying something wrong. Wrongtroversy is far more scalable. It's very hard to discover something that is: (a) true (b) not widely accepted (c) not recently mentioned by other journalists. But if you drop condition (a), you'll never run out of ideas. The most effective wrongtroversial articles assert something that's wrong for several different reasons. People will then proceed to argue with each other about which reason is more important, generating follow-on controversy. Credit to @pg for coining this term.

HillaryBriss 10y ago
wrongtroversial. great term. great explanation of it. thanks. But -- I don't seem to be able to find Paul Graham's creation of this word thru a google search. Any pointers?
chvid 10y ago
Great term. But I really wonder how can you have an academic career and then write stuff like this?
- cJ0th 10y ago
  even academics do have to eat occasionally.
crdoconnor 10y ago
If a business journalist or economist writes about robots it's usually breathlessly optimistic, technologically illiterate, wrong and usually sneaks in a whinge about unions and entitled workers. This article isn't an exception.
rglovejoy 10y ago
But why is it wrong?
10y ago

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thedonkeycometh 10y ago

Same old tired racist rhetoric. Yawn.

thedonkeycometh 10y ago

Same old American rhetoric. "Oh, the chinese are only good at copying. They can never create". Yawn.

bubo_bubo 10y ago
I've seen the same stupid crap said about the japanese, koreans, etc., over the past 40 years. The story remains the same: Corporate US management sits on its hands and watches the rest of the world innovate. Because thinking is too hard and investing in R&D and capital equipment is too expensive.

sandworm101 10y ago

No mention if China's other headache, the fractious legal system. Things like land title, equity rights or non-expropriation (government's taking/buying private assets) are centuries old doctrine in the west. Those looking to invest billions into 'next-gen' manufacturing facilities want legal stability, stability measurable in decades. China isn't there yet.

bubo_bubo 10y ago
"Things like land title, equity rights or non-expropriation (government's taking/buying private assets) are centuries old doctrine in the west. Those looking to invest billions into 'next-gen' manufacturing facilities want legal stability, stability measurable in decades. China isn't there yet." There are stories in the news from time to time about situations where you have an old woman who's been living in the same place for decades (see the movie "Up" for a fictional example), and she's the last person on the land to accept payment for the land and move. The builders - either a company or the government, wind up having to build around. The way they do it is very passive-aggressive, but there /is/ law over there when it comes to land ownership. It's not all state property. Further, do you really "own" your land here in the US? Nobody I know does. You either pay rent (taxes) to the government on the land or the land is taken from you. There is no such thing as totally private land ownership. WRT manufacturing plants: Every new company in China has to be majority Chinese-owned. The government has smartened up over the decades and left behind the "everything is owned by the state, even your toothbrush" to something in between total private ownership and public ownership. So they have rules like the above which anger US investors, but are geared to the interests of the Chinese public. They take care of their own. We used to do that here in the US, but it's all become "fuck you, the free market fixes everything!!!" wharrgarble.
- sandworm101 10y ago
  >> Further, do you really "own" your land here in the US? Nobody I know does. You either pay rent (taxes) to the government on the land or the land is taken from you. Don't get legal theories from fringe websites. That line of thinking is a stone's throw from "US citizens don't have to pay taxes" and "Driver's licences are unconstitutional". Such websites are what got Wesley Snipes in so much trouble. Read some actual legal texts at your local law library Property ownership is a thing in the US (and canada, france, the UK and the rest of the western world). The government cannot take your land without full value compensation, even if you don't pay your taxes. They can condemn your land and sell it to pay your debt, giving you all that is left, but that is a long legal process where the rights of the landowner are given much consideration and ample opportunity. They are not a landlord reclaiming property.

jcbeard 10y ago

I agree with the headline, but I'm not sure I agree with the reasoning. Manufacturing is increasingly robotic, however it's also increasingly mobile, and scalable. In the not so distant future I think various forms of 3D printing will take over manufacturing. You'll have your small home units and large almost entirely automated industrial units building more complex objects. Why would this happen? Labor costs are beginning to rise in China. As are costs in other parts of the world. As costs rise, seems like the distance becomes a huge factor. Manufacture locally, distribute locally. Now the question becomes how to employ the worlds populace.... Also related/interesting: https://www.ted.com/talks/olivier_scalabre_the_next_manufacturing_revolution_is_here?language=en https://www.ted.com/talks/olivier_scalabre_the_next_manufact...

endswapper 10y ago

This is important because ethical, sustainable manufacturing is foundational to a sustainable economy. I don't think any single entity - country, company, person should "own" manufacturing. Some of the other comments touch on this, but manufacturing has far broader implications for the domestic middle class (whatever country you're in) as well as for the environment. Manufacturing jobs as we remember them - Roseanne at the plastic utensil factory, nor as they are - assembling iPhones, are not next-gen manufacturing jobs. Those jobs will be designing, building and maintaining automated industrial productivity. I think manufacturing gets overlooked because it is not relatable and not sexy. However, it is incredibly cool. There is a significant opportunity for innovation with tremendous social and environmental impact.

rdlecler1 10y ago

The question really boils down to: will people be buying goods from Chinese companies or US companies. If the former, then manufacturing will likely be in China. If the US, then it doesn't make sense to outsource automated labor to China just to ship it all back to the US while simultaneously risking IP theft. Chinese consumers will likely buy Chinese made goods or foreign luxury brands. In the US people are more likely to buy US branded goods.

known 10y ago

With rising salaries, labor unrest, environmental devastation and intellectual property theft, China is no longer an attractive place;

known 10y ago

"China is now low-cost, high-quality" --Jack Ma

deleted 10y ago

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bubo_bubo 10y ago

OK, so let's say that a Chinese company moves its stuff to the US. As a former toolmaker, (you can guess why) I have to say "why would they do that?" They would have to invest in training for people to be toolmakers, millwrights, etc. - the trades closely related to engineering (toolmakers do both design and machining, for example) that have gone stale in this country because there are no jobs and no apprenticeships for people to learn them. These are the skills needed to make tools for the assembly lines. And we don't have them any more. You need someone on the shop floor to debug the tooling and that person is still in China. All the skill is now in China. It's not coming back. So neither is the manufacturing. If you have a A.T. Cross pen, please chuck it in the ocean. Yes, I'm pessimistic and angry. Because I saw an entire industry get gutted just so a few at the top can have more.

SaveClyde 10y ago

Big question is if the manufacturing moves back to US...will China allow US imports. This will be interesting, every country might start their manufacturing operations and I believe the big winner will be the one manufacturing robots :)

IANAD 10y ago

For many years additive manufacturing printers have been getting better, but slowly. In most cases, the printing process has leaned heavily on people and software for addition of part supports and other part modifications, and a good 3D manufacturing team will include experienced personnel; it's not easy to replicate. While large companies typically mass produce, there are certain parts that cannot be made via traditional manufacturing processes. They've been using additive manufacturing typically for tooling and higher-end products in these cases. Also, there is a trend towards customization, faster iterations of part design, and using a variety of part materials within each additive manufactured part that each have their own qualities. But, printer manufacturers have seen opportunity in making the printing process faster and easier to use, which over time will reduce the need for all of the people involved in the process. Already some of the latest printers are autogenerating supports and making it simple to remove those supports. That's just a small part of the process, but it is a significant step. So, while traditional mass manufacturing companies will be hurting in a decade or two, eventually printers will no longer require humans to be involved at all. Then, any company with enough money to buy a large number of printers could manufacture 3D parts at mass scale. I think it is premature to say that China won't eventually own next-generation manufacturing eventually, but it won't in the next few decades unless they drop everything and get on it.

asitdhal 10y ago

the author has completely ignored the fact that Chinese skill improves over the years, Americans grow, but Chinese grow faster.

eggy 10y ago

Yes, robots do the same in China as they do in the U.S.A., BUT you still have to pay a human to turn on the lights and start or stop the robots. In the U.S.A. it will cost you 4x more I am guessing for this person. They are not just sticking to manufacturing. China holds the number one spot in Supercomputers as of June 2016 with Sunway TaihuLight, which displaced another Chinese supercomputer Tianhe-2. The Sunway also uses no U.S.A. hardware. [1] China also just announced a 64-core Arm processor Phytium that if confirmed "will be the most powerful Arm server chip on the planet." [2] [1] https://en.wikipedia.org/wiki/Supercomputer https://en.wikipedia.org/wiki/Supercomputer [2] https://www.top500.org/news/chinese-chipmaker-unveils-speedy-64-core-arm-processor/ https://www.top500.org/news/chinese-chipmaker-unveils-speedy...

pm90 10y ago

This is a rather poorly written article. The main premise seems to be that manufacturing is being automated, China is automating manufacturing by buying robots not made in China, and since robots have the same productivity everywhere, it doesn't make sense to manufacture in China since it can be done back in the US. While saving labor costs is an important reason for moving manufacturing to China, there are other equally important factors as well. Access to a labor pool of workers that do higher level designing that cannot be automated, much lower local taxes (and even subsidies), proximity to other manufacturing centers already in China are just some of the other important reasons. I wish journalists would do a little more research before writing inane articles with sensationalist headlines.

sharemywin 10y ago

I agree that with automation production will become more and more local but the article assumes most consumption will happen in the US.

norea-armozel 10y ago

I'm not sure you can compare an existing factory in China with a non-existing factory in upstate New York. The two have very different environments to contend with. In China, they already have supply chains, investors, and customers. Whereas an non-existent or proposed factory has to set each of these up and still contend with competition with the existing factories. The only real advantage a factory that's local (like one in upstate New York) is they'll be closest to the demand for that region. So, they can attenuate their output when demand rises/lowers. But as a whole this is only a potential benefit in terms of the ecological impact (reduced over production for some products). And I say potential because some areas are better manufacturing certain products like it's cheaper to extract aluminium British Columbia where they have cheap power due to hydroelectric power than say S. America where you find the aluminium ore rich soils. Getting around infrastructure limitations won't be as easy as simply pouring more concrete. Some places just will never be able to compete and I think this is something some folks need to address in such articles.