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> Still, I think that's only part of the problem. Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly over
by rapsey 4y ago
> Still, I think that's only part of the problem. Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline.
Not really. China is low end manufacture and has not moved meaningfully out of that niche at all. In fact they are losing their advantage with no alternative to fall back on. Chinese assembly is not nearly as cheap as it was and their playbook is being copied by other countries (India, Vietnam).
- Incipient 4y agoI'd be very interested to see some data on these trends. Without numbers it's impossible to say. I'd be fairly confident in some rough generalisations, but the specifics and magnitude I have no idea on: - for the last few decades the west has moved bulk value add manufacturing to China, and we've grown their economy/influence accordingly - China is definitely doing more high tech manufacturing, wafers and EV tech - basic manufacturing is definitely moving in part to cheaper countries
- vincentdm 4y agoHere's a relevant article about it: https://www.economist.com/business/2023/02/20/global-firms-are-eyeing-asian-alternatives-to-chinese-manufacturing https://www.economist.com/business/2023/02/20/global-firms-a... Some quotes: "under a weighty combination of commercial and political pressure, foreign companies are beginning to pluck up the courage if not to leave China entirely, then at least to look beyond it for growth. Chinese labour is no longer that cheap: between 2013 and 2022 manufacturing wages doubled, to an average of $8.27 per hour (see chart). More important, the deepening Sino-American techno-decoupling is forcing manufacturers of high-tech products, especially those involving advanced semiconductors, to rethink their reliance on China." "This alternative Asian supply chain—call it Altasia—looks evenly matched with China in heft, or better (see map). Its collective working-age population of 1.4bn dwarfs even China’s 950m. Altasia is home to 155m people aged between 25 and 54 with a tertiary education, compared with 145m in China—and, in contrast to ageing China, their ranks look poised to expand. In many parts of Altasia wages are considerably lower than in China: hourly manufacturing wages in India, Malaysia, the Philippines, Thailand and Vietnam are below $3, around one-third of what Chinese workers now demand. And the region is already an exporting power: its members sold $634bn-worth of merchandise to America in the 12 months to September 2022, edging out China’s $614bn." "Altasia will certainly not replace China soon, let alone overnight. In January, for example, Panasonic announced a big expansion of its Chinese operations. But in time China is likely to become less attractive to foreign manufacturers. Chinese labour is not getting any cheaper and its graduates are not getting much more numerous. America may yet realise that reducing its reliance on China in practice requires closer ties with friendly countries, including membership of the cptpp, the precursor of which collapsed after America pulled out in 2017. And as a budding alternative to China, Altasia has no equal."
- ChuckNorris89 4y agoLook on the back of your iPhone or MacBook. Where does it say it's manufactured? Apple and others don't build their stuff in China anymore because it's the cheapest option. Far from it. The electronics supplier I used to have as a customer would assemble stuff in Ukraine(pre-war) because the worker wages there were lower than in China. But they didn't assemble iPhones there or anything close to that quality, complexity or volume. If you just need a country to assemble pre-made components as if it were LEGOs, that's not dealing with super high volumes and high complexity, like white goods for example, then even Eastern Europe is cheaper than China. They build stuff in China because of the entire supply chain supporting the manufacture and assembly of such cutting edge devices in high volume. Stuff like machining millions of small aluminium/steel frames, batteries, tiny screws, custom flex cables or connectors. It's much easier to ramp up production of iPhones when a lot of these parts (outside the semiconductor chips which need to be imported) are developed and manufactured right next door to the final assembly and testing plant, instead of another country. Also, it makes your prototyping much faster since you can have the next iteration of a part on your doorstep in less than 24 hours. Now China is already gaining significant market share in cutting edge OLED display market to muscle out Samsung and LG. Look up BOE. Apple used their displays in the iPhone 14 series and will use even more in the iPhone 15. China was also pushing strong in cutting edge chip manufacturing but US & allies made sure to knee-cap them in time to slow them down. Scuffing off China as just a country for cheap manufacturing is a gross underestimation that hasn't been true in over 10 years.
- fomine3 4y agoThough Chinese OLED manufacturers are growing, I don't know they muscle out Koreans. https://www.oled-info.com/omdia-chinese-oled-makers-increase-their-market-share-over-20 https://www.oled-info.com/omdia-chinese-oled-makers-increase...
- flakeoil 4y ago> China is low end manufacture and has not moved meaningfully out of that niche at all. Eh, just about everything is manufactured in China. It's hard to find anything that cannot be manufactured there. It's however easy to find things that cannot be manufactured in Europe or America anymore (at least at scales above lab volumes).
- trabant00 4y agoJust in the tech world Xiaomi and Huawei invalidate your position. I have personally own several Xiaomi products from smartphones, smartwatch, robot vacuum, electric scooter, etc, and they are both better and cheaper than their western competitors. Not copies either, they come with their own designs and features. The most surprising for me where the vacuum robot who navigates better at 200$ with only a front facing infrared sensor that 1000$ western products with 360 degree laser.