3 ms·

China is at risk of following Japan into stagnation. It is especially likely given the massive wave of manufacturing repatriation going on now. If China loses

China is at risk of following Japan into stagnation. It is especially likely given the massive wave of manufacturing repatriation going on now. If China loses its position as the world's manufacturer, it will have to rely on its untested military strength to obtain resources to appease its restless population. Interesting times indeed.

chii 4y ago
> China loses its position as the world's manufacturer they will not because the reason japan (and the US) lost theirs is that china was cheap. Where are you going to get this type of labour - skilled but cheap - other than china, in the next 10-30 years? Southeastern asian countries could make up some of the amount, but if they could do it today, they would've dominated already! The repatriation of manufacturing is political propaganda - it won't work economically, as consumers' preferences is overwhelmingly for cheap goods, not expensive patriotism.
- 01100011 4y ago
  One scenario: USD is weakened by a BRICS* based basket of currencies and the US is released from the chokehold of the Triffin Dilemma. Another scenario: Automation makes labor costs less relevant. Anyway, it's happening already. Tons of news articles covering it lately. For instance: https://www.bnnbloomberg.ca/us-factory-boom-heats-up-as-ceos-yank-production-out-of-china-1.1787900.amp.html https://www.bnnbloomberg.ca/us-factory-boom-heats-up-as-ceos... > but if they could do it today, they would've dominated already Weird logic. I don't follow.
  - chii 4y ago
    > Weird logic. I don't follow. There's no indication that the manufacturing capacity could be taken over by a south-eastern asian country. If they could do so, why is it not done today, rather than in the future (when china loses their manufacturing capacity)?
    - cyberlurker 4y ago
      It’s been happening. One example is Vietnam.
    - ericmay 4y ago
      Because it takes time to do so? I don’t think companies are going to fully leave the Chinese market or anything. That wouldn’t make any sense. But divest their exposure and locate factories all around the world because of the risk due to concentration? Yea definitely.
    - lvnfg 4y ago
      Changes take time, and there are massive opportunity costs to moving your supply chain base elsewhere. If other countries can do manufacturing equally well (same quality, cost, legal environment, etc), but you already have your base fully established in China serving your entire global operations, moving to the another country gives you no benefits, and you face the risk of severe disruptions to your operations if anything goes wrong. So the world will only move out of China if other countries like India can offer significantly lower cost at same quality, which they haven't been able to do, or if there are significant geopolitical risks to staying, which seems likelier by the day.

chii 4y ago

> China loses its position as the world's manufacturer they will not because the reason japan (and the US) lost theirs is that china was cheap. Where are you going to get this type of labour - skilled but cheap - other than china, in the next 10-30 years? Southeastern asian countries could make up some of the amount, but if they could do it today, they would've dominated already! The repatriation of manufacturing is political propaganda - it won't work economically, as consumers' preferences is overwhelmingly for cheap goods, not expensive patriotism.

01100011 4y ago
One scenario: USD is weakened by a BRICS* based basket of currencies and the US is released from the chokehold of the Triffin Dilemma. Another scenario: Automation makes labor costs less relevant. Anyway, it's happening already. Tons of news articles covering it lately. For instance: https://www.bnnbloomberg.ca/us-factory-boom-heats-up-as-ceos-yank-production-out-of-china-1.1787900.amp.html https://www.bnnbloomberg.ca/us-factory-boom-heats-up-as-ceos... > but if they could do it today, they would've dominated already Weird logic. I don't follow.
- chii 4y ago
  > Weird logic. I don't follow. There's no indication that the manufacturing capacity could be taken over by a south-eastern asian country. If they could do so, why is it not done today, rather than in the future (when china loses their manufacturing capacity)?
  - cyberlurker 4y ago
    It’s been happening. One example is Vietnam.
  - ericmay 4y ago
    Because it takes time to do so? I don’t think companies are going to fully leave the Chinese market or anything. That wouldn’t make any sense. But divest their exposure and locate factories all around the world because of the risk due to concentration? Yea definitely.
  - lvnfg 4y ago
    Changes take time, and there are massive opportunity costs to moving your supply chain base elsewhere. If other countries can do manufacturing equally well (same quality, cost, legal environment, etc), but you already have your base fully established in China serving your entire global operations, moving to the another country gives you no benefits, and you face the risk of severe disruptions to your operations if anything goes wrong. So the world will only move out of China if other countries like India can offer significantly lower cost at same quality, which they haven't been able to do, or if there are significant geopolitical risks to staying, which seems likelier by the day.