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US + EU + Japan (who respect IP) = 40T GDP China (who doesn't respect IP) = 11T GDP pretty sure China needs the developed world's customers more than they nee

US + EU + Japan (who respect IP) = 40T GDP China (who doesn't respect IP) = 11T GDP pretty sure China needs the developed world's customers more than they need China. China can be replaced by automation and other developing countries for labor

jacquesm 8y ago
Have a look at the rate of growth. > pretty sure China needs the developed world's customers more than they need China. For now, yes. > China can be replaced by automation and other developing countries for labor We'll see. For now they seem to be doing pretty good, and in fact even if they replace their workers with automation they will do even better than they do today. Or do you believe that automation will magically bring back the production facilities?
- generalmycoup 8y ago
  > Have a look at the rate of growth. their rate of growth is faked. have a look at their provinces confessing a 20-30% fake revenue https://www.bloomberg.com/news/articles/2018-01-19/this-is-how-china-s-regions-fare-in-the-fake-gdp-data-stakes https://www.bloomberg.com/news/articles/2018-01-19/this-is-h... > For now they seem to be doing pretty good Their economy is saddled with debt, and their growth is slowing/stopping so much that Xi JingPing had no choice but to announce dictatorship way earlier (before riots and revolutions), their money is fleeing the country, their stock market crashed, they have demographics crisis, gender crisis, middle income trap crisis, the population's money are all stuck in real estate bubbles which are now deflating, their exports are down, their imports are up, their factories moving to other countries, etc.
  - hungryhobo 8y ago
    Sigh you really need to get out more.
- Kadin 8y ago
  I find it odd whenever people claim that there's just no possible way production can't be shifted back to North America and Europe. If there's no labor advantage, offshoring production is a logistical nightmare. I mean, the factories that production was offshored to (in China and more recently in SE Asia) were built largely in the last decade or two, by companies with fairly short ROI horizons. There's no particular reason that new facilities couldn't be built in other locations in about the same amount of time. Intriguingly, China basically showed how quickly you can move a big chunk of global industrial production around from one place to another, and it's not that long. What global trade giveth, global trade can taketh away. Modern factories are basically just big steel sheds built on concrete slabs, in which you house machinery and equipment that becomes obsolete over time. It would not be hard to build them elsewhere. My guess is that if you take labor costs away, the next critical factors are energy costs and transportation issues (both raw materials inbound and finished goods outbound). It could lead to some interesting manufacturing locations.
  - jacquesm 8y ago
    There are all kinds of extra costs to consider besides labor, though what labor remains will always be a factor. Other such factors are environmental regulations, tax breaks, shipping costs (which should always work out in favor of domestic production), cost of raw materials and energy (as you noted), access to those raw materials, knowledge, cost of land and other capex. A high volume factory is nothing like a steel shed on concrete slabs, a factory is a building that is very much optimized for its function, and yes, it's not hard to build them elsewhere but once you have them they are hard to move. A nice example is the semiconductor industry, which used to be a United States / Europe affair and then after a brief detour through Japan ended up mostly in Taiwan, China and South Korea.
  - forapurpose 8y ago
    > people claim that there's just no possible way production can't be shifted back to North America and Europe The assumption that those advanced economies would want manufacturing back seems like nostalgia to me. Wouldn't that be going backward, to jobs of the mid-20th century with their income and quality of life? Those economies should be moving forward to better, more productive, safer, less physically difficult, higher paying jobs. Try working in a factory for awhile and you might appreciate your desk job with its ergonomic challenge of monitor height. > If there's no labor advantage, offshoring production is a logistical nightmare. Based on what I've read, labor plays only a small role. It's local expertise and its network effect, as with any geographical cluster for any industry. SV is an example: All the technical experts, the financiers, the schools ... even the real estate developers and local governments know what startups and IT giants need.

jacquesm 8y ago

Have a look at the rate of growth. > pretty sure China needs the developed world's customers more than they need China. For now, yes. > China can be replaced by automation and other developing countries for labor We'll see. For now they seem to be doing pretty good, and in fact even if they replace their workers with automation they will do even better than they do today. Or do you believe that automation will magically bring back the production facilities?

generalmycoup 8y ago
> Have a look at the rate of growth. their rate of growth is faked. have a look at their provinces confessing a 20-30% fake revenue https://www.bloomberg.com/news/articles/2018-01-19/this-is-how-china-s-regions-fare-in-the-fake-gdp-data-stakes https://www.bloomberg.com/news/articles/2018-01-19/this-is-h... > For now they seem to be doing pretty good Their economy is saddled with debt, and their growth is slowing/stopping so much that Xi JingPing had no choice but to announce dictatorship way earlier (before riots and revolutions), their money is fleeing the country, their stock market crashed, they have demographics crisis, gender crisis, middle income trap crisis, the population's money are all stuck in real estate bubbles which are now deflating, their exports are down, their imports are up, their factories moving to other countries, etc.
- hungryhobo 8y ago
  Sigh you really need to get out more.
Kadin 8y ago
I find it odd whenever people claim that there's just no possible way production can't be shifted back to North America and Europe. If there's no labor advantage, offshoring production is a logistical nightmare. I mean, the factories that production was offshored to (in China and more recently in SE Asia) were built largely in the last decade or two, by companies with fairly short ROI horizons. There's no particular reason that new facilities couldn't be built in other locations in about the same amount of time. Intriguingly, China basically showed how quickly you can move a big chunk of global industrial production around from one place to another, and it's not that long. What global trade giveth, global trade can taketh away. Modern factories are basically just big steel sheds built on concrete slabs, in which you house machinery and equipment that becomes obsolete over time. It would not be hard to build them elsewhere. My guess is that if you take labor costs away, the next critical factors are energy costs and transportation issues (both raw materials inbound and finished goods outbound). It could lead to some interesting manufacturing locations.
- jacquesm 8y ago
  There are all kinds of extra costs to consider besides labor, though what labor remains will always be a factor. Other such factors are environmental regulations, tax breaks, shipping costs (which should always work out in favor of domestic production), cost of raw materials and energy (as you noted), access to those raw materials, knowledge, cost of land and other capex. A high volume factory is nothing like a steel shed on concrete slabs, a factory is a building that is very much optimized for its function, and yes, it's not hard to build them elsewhere but once you have them they are hard to move. A nice example is the semiconductor industry, which used to be a United States / Europe affair and then after a brief detour through Japan ended up mostly in Taiwan, China and South Korea.
- forapurpose 8y ago
  > people claim that there's just no possible way production can't be shifted back to North America and Europe The assumption that those advanced economies would want manufacturing back seems like nostalgia to me. Wouldn't that be going backward, to jobs of the mid-20th century with their income and quality of life? Those economies should be moving forward to better, more productive, safer, less physically difficult, higher paying jobs. Try working in a factory for awhile and you might appreciate your desk job with its ergonomic challenge of monitor height. > If there's no labor advantage, offshoring production is a logistical nightmare. Based on what I've read, labor plays only a small role. It's local expertise and its network effect, as with any geographical cluster for any industry. SV is an example: All the technical experts, the financiers, the schools ... even the real estate developers and local governments know what startups and IT giants need.