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The west biggest mistake - thinking that you could outsource the bottom layers of the value pyramid and there won't be local layers forming on top of them. And

The west biggest mistake - thinking that you could outsource the bottom layers of the value pyramid and there won't be local layers forming on top of them. And when china achieve scale on something with good quality - game over man, game over.

gumby 9y ago
Same statement was made about Japan in the 1980s, and look at them now. Then again, at the same time Reagan's OMB director Darman famously said, "Potato chips or silicon chips, who cares? They're both just chips". Even then I thought he was wrong.
- parshimers 9y ago
  >Same statement was made about Japan in the 1980s, and look at them now. What, look at the fact Japanese cars out-sell American ones three decades later (~12% vs ~19.6%)? American car makers were even trying to copy their methods in the 90's (NUMMI & Geo, Ford+Mazda, etc...).
  - gumby 9y ago
    Do they? Most of the cars with foreign branding are still manufactured in the US. And the big three improved quality thanks to the competition. They just focused on the more profitable segments (same play as Apple). Japan, on the other hand, is a basket case, and China faces a similar demographic hurdle.
TheAdamAndChe 9y ago
You assume that the corporations were wanting growth within the country, which they don't care about. The corporations wanted a return on investment, which they have achieved.
Justin_K 9y ago
The problem of resources, lack of legal rights and the environment will always hold China back. You can't keep poisoning yourselves to death to make a buck and call it progress.
- tchaffee 9y ago
  Chinese leaders are very aware of the pollution problems and are working hard at dealing with it. One thing most outsiders fail to understand is that Chinese leadership love their country and their people and want things to improve. That's not to say they don't do bad stuff at times. But it's false to say that the environmental concerns are being completely ignored in order to make progress.
dilemma 9y ago
Indeed. Chinese companies will be dominating a wide array of industries due to their better ability to develop products that comes from having access to local manufacturing and the best supply chains.
lacampbell 9y ago
And when china achieve scale on something with good quality - game over man, game over. Why do you think that will happen? The chinese labour force is rapidly shrinking, lower end manufacturing is starting to move south, and they've just figured out ball point pens. I don't see a bright future for them at all.
- bigger_cheese 9y ago
  I think it's the circle of capitalism. Western manufacturing industry basically said we can't compete on bulk products so we will focus on the specialized 'value add' part of the supply chain and let China produce bulk low margin products. In 10-15 years time there is nothing to say Chinese manufacturing won't capitulate to $Next_Developing_economy in the same manner and surrender their bulk manufacturing dominance in favor of moving up the chain. Edit. I should add the interesting part of all this is Patents - imagine if ball point pen tips were a patented design...
  - lacampbell 9y ago
    I doubt the capability of china to be able to move up the chain. I mean they just figured out ball point pens... it's too little too late. I think china struggles because it's only semi capitalist and still has too many relics of a planned economy.
    - yadongwen 9y ago
      Have you read the article? It's not the pen. It's high quality steel. I think most countries probably still cannot do it now. China just successfully flew a big plane a few days ago (https://en.wikipedia.org/wiki/Comac_C919 https://en.wikipedia.org/wiki/Comac_C919) and could automate package delivery like this https://twitter.com/kerotto/status/851055016928460800 https://twitter.com/kerotto/status/851055016928460800 There are many important areas where it has already been the leader of world (high speed trains, consumer software apps, etc)
      - lacampbell 9y ago
TheSpiceIsLife 9y ago
Another perspective is that the layers built on top helped pull a lot of the Chinese population out of poverty. Modernised China is a huge quality of life win for the Chinese and a lot of others throughout the world who gained also.

gumby 9y ago

Same statement was made about Japan in the 1980s, and look at them now. Then again, at the same time Reagan's OMB director Darman famously said, "Potato chips or silicon chips, who cares? They're both just chips". Even then I thought he was wrong.

parshimers 9y ago
>Same statement was made about Japan in the 1980s, and look at them now. What, look at the fact Japanese cars out-sell American ones three decades later (~12% vs ~19.6%)? American car makers were even trying to copy their methods in the 90's (NUMMI & Geo, Ford+Mazda, etc...).
- gumby 9y ago
  Do they? Most of the cars with foreign branding are still manufactured in the US. And the big three improved quality thanks to the competition. They just focused on the more profitable segments (same play as Apple). Japan, on the other hand, is a basket case, and China faces a similar demographic hurdle.

TheAdamAndChe 9y ago

You assume that the corporations were wanting growth within the country, which they don't care about. The corporations wanted a return on investment, which they have achieved.

Justin_K 9y ago

The problem of resources, lack of legal rights and the environment will always hold China back. You can't keep poisoning yourselves to death to make a buck and call it progress.

tchaffee 9y ago
Chinese leaders are very aware of the pollution problems and are working hard at dealing with it. One thing most outsiders fail to understand is that Chinese leadership love their country and their people and want things to improve. That's not to say they don't do bad stuff at times. But it's false to say that the environmental concerns are being completely ignored in order to make progress.

dilemma 9y ago

Indeed. Chinese companies will be dominating a wide array of industries due to their better ability to develop products that comes from having access to local manufacturing and the best supply chains.

lacampbell 9y ago

And when china achieve scale on something with good quality - game over man, game over. Why do you think that will happen? The chinese labour force is rapidly shrinking, lower end manufacturing is starting to move south, and they've just figured out ball point pens. I don't see a bright future for them at all.

bigger_cheese 9y ago
I think it's the circle of capitalism. Western manufacturing industry basically said we can't compete on bulk products so we will focus on the specialized 'value add' part of the supply chain and let China produce bulk low margin products. In 10-15 years time there is nothing to say Chinese manufacturing won't capitulate to $Next_Developing_economy in the same manner and surrender their bulk manufacturing dominance in favor of moving up the chain. Edit. I should add the interesting part of all this is Patents - imagine if ball point pen tips were a patented design...
- lacampbell 9y ago
  I doubt the capability of china to be able to move up the chain. I mean they just figured out ball point pens... it's too little too late. I think china struggles because it's only semi capitalist and still has too many relics of a planned economy.
  - yadongwen 9y ago
    Have you read the article? It's not the pen. It's high quality steel. I think most countries probably still cannot do it now. China just successfully flew a big plane a few days ago (https://en.wikipedia.org/wiki/Comac_C919 https://en.wikipedia.org/wiki/Comac_C919) and could automate package delivery like this https://twitter.com/kerotto/status/851055016928460800 https://twitter.com/kerotto/status/851055016928460800 There are many important areas where it has already been the leader of world (high speed trains, consumer software apps, etc)
    - lacampbell 9y ago

TheSpiceIsLife 9y ago

Another perspective is that the layers built on top helped pull a lot of the Chinese population out of poverty. Modernised China is a huge quality of life win for the Chinese and a lot of others throughout the world who gained also.