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This article completely misses the point. Places like China assemble stuff by hand that would be automated in higher wage countries not because they don't know

This article completely misses the point. Places like China assemble stuff by hand that would be automated in higher wage countries not because they don't know how, or higher wage countries have developed some new software they haven't. It's because wage costs are low. As soon as it makes economical sense to automate, companies do. It's not specific to geography, or technology, or anything of other than economics of thr world labor market.

femto 3y ago
Agree, in that if the cheapest way to do process is automated and the capital cost of the automation is reasonable there is no advantage to offshoring that process. An example is pick and place assembly of circuit boards. For large quantities, meaning the loading of the feeders is not a big part of the cost, a local company can match or undercut the price of an offshore company. A counterexample is chip fabrication, where the capital cost dominates (and even if it didn't wafers are often manually handled).
- hedora 3y ago
  The percentage unit cost and environmental impact of shipping electronics from China (or between any two points on earth near a major harbor) on a cargo vessel is zero. If the labor in China is cheaper than the robot + the person that operates the robot, then it is cheaper to build it there. Building it locally only makes economic sense if the design is changing frequently (e.g., using local pick and place for prototyping), or if it is built to order, so the time it spends on the boat actually matters. As an extreme example, giant Italian windows cost about the same, delivered, in the US as inferior domestic ones do. The main downside is the lead time. In particular, thanks to a drought, traffic through the panama canal is all screwed up these days, so getting them to the west coast is hard. If the economics tilt this way for shipping giant panes of glass, they certainly also do for tiny, high priced electronic devices. Of course, externalities (e.g., environmental impact of Chinese manufacturing, human rights, national security and xenophobia) could change the tradeoffs.
  - bmitc 3y ago
    > environmental impact of shipping electronics from China (or between any two points on earth near a major harbor) on a cargo vessel is zero How does that work? Or are you just referring to electronic components only and it being zero relatively speaking?
    - NhanH 3y ago
      Modern container cargo ships are huge. Even though in aggregate the absolute pollution is a big numbers, when you amortize over the volume, shipping an item has about a very close to zero impact on environment. And this is not some hand-waving explanation either, since other factors dominates the environmental impact (for example, shipping from Newegg to your office is probably a magnitude more polluted), it doesn't matter if the factory is in China or the US. This applies to a lot more things, even lower value stuffs like fruit. Which is why local produce might have more environmental impact than imported mass produce fruits, though I don't have a citation for this on hand.
      - TJSomething 3y ago
        I would add that the numbers are possible to compare, but container shipping is pretty efficient. One container from Shenzhen to Oakland (~10,000 km) is going to be the CO₂ equivalent of burning 60 gallons of gasoline.
      - diydsp 3y ago
        "According to Irene Blooming, a spokeswoman for the European environmental coalition Seas at Risk, the fuel used in oil tankers and container ships is high in sulfur and cheaper to buy compared to the fuel used for domestic land use. "A ship lets out around 50 times more sulfur than a lorry per tonne of cargo carried."[1] "Of total global air emissions, marine shipping accounts for 18 to 30 percent of the nitrogen oxides and 9% of the sulfur oxides."[1] "One source of environmental stresses on maritime vessels recently has come from states and localities, as they assess the contribution of commercial marine vessels to regional air quality problems when ships are docked at port.[33] For instance, large marine diesel engines are believed to contribute 7 percent of mobile source nitrogen oxide emissions in Baton Rouge and New Orleans, Louisiana. Ships can also have a significant impact in areas without large commercial ports: they contribute about 37 percent of total area nitrogen oxide emissions in the Santa Barbara, California area, and that percentage is expected to increase to 61 percent by 2015."[1] " Maritime transport accounts for 3.5% to 4% of all greenhouse gas emissions, primarily carbon dioxide.[1][27] According to the World Bank, in 2022, the shipping industry's 3% of global greenhouse gas emissions make it "the sixth largest greenhouse gas emitter worldwide, ranking between Japan and Germany."[1] [1] https://en.m.wikipedia.org/wiki/Environmental_effects_of_shipping https://en.m.wikipedia.org/wiki/Environmental_effects_of_shi...
jonathankoren 3y ago
Yeah. China is full of make-work programs. It's obvious. For example, every Chinese city has sidewalks made, not of poured concrete, but rather 30 cm x 30 cm ceramic tiles. Due to historic city planning, the Chinese tend to park their cars on the sidewalks, which inevitably breaks the tiles, thus causing regular replacement. These tiles are laid not by some sort of brick laying machine, but rather by hand. The sidewalk by my house was poured in 1968. I know that, because there's a date stamped in it. A couple of blocks over there's a sidewalk that someone scrawled graffiti into. "Elton John 75". There's literally nothing wrong with either of these sidewalks. They're not cracked, nor buckled. China doesn't need to replace every sidewalk every two or three years, but they choose to.
- serf 3y ago
  just a counter-point, if it is at all; I grew up in SoCal with poured sidewalks around the entire area. Nearly every single one of them was destroyed by nearby trees or shrubbery extending their roots under the thing and cracked it up into a million pedestrian-tripping pieces. These sidewalks were from the 60s and 70s too -- thing is that they cracked 20-30 years ago and no one ever bothered to replace. The home owners i've spoken to that wish they could were confronted with the aspect of being forced to pay for their entire street lest they wish to pull permits to repair their small section. So you have this new problem with a liability tug-of-war between well-wishing civillians against the cost-saving municipalities, and to be clear this was more than one single municipality, i've seen it across SoCal. So, what i'm trying to get across is that there is a middle ground between 'needless replacement for the sake of generating work' and 'neglect', and neither China or the US has seemed to pin that middle down yet : but that needless replacement regime sure sounds nice as a pedestrian that just wants to use the goddamn sidewalk. I've seen busy-work before, that just doesn't strike me as that.
- thebradbain 3y ago
  Truthfully, based on the state of our sidewalks in the richest cities of the US like NYC, SF, Chicago, and LA— we need to be replacing them maybe not every two or three years, but at least every 5. Right now it seems like 20, if we’re lucky. Meanwhile most towns and newer parts of smaller, less affluent cities, or even wealthier suburbs don’t even _have_ sidewalks. I think it’s ultimately part of our philosophy toward the built environment that “Europe is built with screws, the US is built with nails”— we build something that gets the job done at the time it’s built, then never come back to it. Maybe that allowed us to build fast, but now the bigger issue is maintenance of what we already have.
coldtea 3y ago
>Places like China assemble stuff by hand that would be automated in higher wage countries not because they don't know how, or higher wage countries have developed some new software they haven't. It's because wage costs are low. Not only. It's also because important parts can't be automated with current technology. It's also not that Chinese factories substitute robots for manual workers. They automate the shit out of them too, and have the same share of robots vs workers that a western factory would...
- eternityforest 3y ago
  How much of that is because the labor is too cheap for anyone to care about automating anything?
  - coldtea 3y ago
    How much of what "that"? I said the opposite, that in China they automate just as much as western factories (if not more, see the sibling comment).
- yorwba 3y ago
  Chinese factories have more robots per worker than factories in most Western countries, behind only Korea, Singapore, Japan and Germany: https://ifr.org/ifr-press-releases/news/china-overtakes-usa-in-robot-density https://ifr.org/ifr-press-releases/news/china-overtakes-usa-... (in 2021)
  - Archelaos 3y ago
    Without further context, we cannot say whether a lower number of robots in the US is an indication of inferiority or superiority to China. Example: A company I was working for produced booklets with their own autmatic book printing binding machine. Not long ago, they outsourced it to a printer because it was cheaper that way. So the single more capable printer's "robot" is replacing the need for a lot of other not so efficient small "robots".
    - 3y ago
defanor 3y ago
And the article only mentions reduction of costs with automation. Would be strange enough for some tech-oriented magazine, but this one is called "The Economist". Though maybe it is supposed to be read just as a futuristic speculation, or as an overview for people unaware that automation is possible.
ketzo 3y ago
I think you make a good point, but also: There is such a thing as pressure to automate. You could imagine a world where wage costs just stay low, and companies just keep making stuff by hand. Companies need to know that there is a cost-benefit trade to be made. And so an article like this is nodding at that pressure from the opposite direction: "Hey, you should be aware that automation (cost savings) are totally feasible, even if they're not realistic for you at this exact moment."
firecall 3y ago
A contributing factor is also that they are a Communist State with a lot of people that need jobs! You could argue that Full Employment is tenet of Communism. I'll leave debate about what Communism is and what the CCCP is and isn't to the rest of the internet. I'm sure there are people out there who would love to have a conversation about it... LOL ;-)
- yieldcrv 3y ago
  One of the best things about doing business and also non monetary interactions globally is opting out of local distractions As soon as you unsubscribe to US perspectives, nobody is detailing conversations about the PRC ultimately winning that territory and the ways it behaves, it is very easy to operate there on a day to day basis
- snapcaster 3y ago
  Your brain has been melted by US media I'm afraid. Using 20th century soviet style communism as your mental model for modern China won't serve you well
- dontlaugh 3y ago
  It’s certainly true that the state has different behaviour when ruled by the working class (like in China, Vietnam, Cuba) vs the capitalist class (like in most other countries). That doesn’t necessarily mean everything is centrally planned vs everything is a market. A variety of approaches can be used to satisfy the interests of the ruling class, within the constraints they have. So in China there is definitely state intervention to ensure there are enough good jobs. But that can also mean speeding up development and automating so the jobs are better, while creating new jobs by producing new things society needs or wants.
  - dudeofea 3y ago
    I don't know about Vietnam and Cuba, but what evidence is there that China is ruled by the working class?
    - 3y ago
rcxdude 3y ago
Automation sits in a lot of different positions: sometimes it's a cheaper option overall, sometimes it's actually more expensive but more flexible than manual assembly, and it varies greatly from operation to operation (some almost exclusively manual and some almost exclusively automated)
- dv_dt 3y ago
  Usually it’s more expensive to setup and less flexible, but higher volume
  - iancmceachern 3y ago
    Yes, for example it costs billions to tool up an automated autotive plant
tuatoru 3y ago
The other point that is completely missing is that a factory does not exist in splendid isolation. If there's a problem with the FR-4 circuit boards, or the pick and place machines are misbehaving, or some of the chip-scale components that are being placed are faulty, or the wiring harness is wrong, or the molds for the body of the product need modifying because the product is cracking... ... it's much easier to deal with your supplier just down the road than one across the world. These days stuff is manufactured in China because (the) stuff (that makes up the stuff) is manufactured in China. Additive manufacturing is still too slow and expensive for mass production. As a recent Ars Technica article put it, it's fine for supercars but not for cars.
- ilyt 3y ago
  I've listened to few interviews with people manufacturing in China and "you have to have someone on the ground there" repeated in pretty much all of them.
  - baby_souffle 3y ago
    I was told by people that work for FAANG that each company reserves some number of first class seats for the daily SFO to China flights specifically for this reason. If there an issue, some engineer responsible for the part can be in the factory in under 24h
    - awinter-py 3y ago
      only 1 of faang manufactures consumer-facing hardware? could see why AAPL does this, but the others?
      - Philpax 3y ago
        Meta (Quest 2/3/Pro, Meta Portal), Google (Pixel, home automation hardware, much more), Amazon (Echo, Kindle, Ring), and Microsoft (Surface lineup and much more) all manufacture hardware.

femto 3y ago

Agree, in that if the cheapest way to do process is automated and the capital cost of the automation is reasonable there is no advantage to offshoring that process. An example is pick and place assembly of circuit boards. For large quantities, meaning the loading of the feeders is not a big part of the cost, a local company can match or undercut the price of an offshore company. A counterexample is chip fabrication, where the capital cost dominates (and even if it didn't wafers are often manually handled).

hedora 3y ago
The percentage unit cost and environmental impact of shipping electronics from China (or between any two points on earth near a major harbor) on a cargo vessel is zero. If the labor in China is cheaper than the robot + the person that operates the robot, then it is cheaper to build it there. Building it locally only makes economic sense if the design is changing frequently (e.g., using local pick and place for prototyping), or if it is built to order, so the time it spends on the boat actually matters. As an extreme example, giant Italian windows cost about the same, delivered, in the US as inferior domestic ones do. The main downside is the lead time. In particular, thanks to a drought, traffic through the panama canal is all screwed up these days, so getting them to the west coast is hard. If the economics tilt this way for shipping giant panes of glass, they certainly also do for tiny, high priced electronic devices. Of course, externalities (e.g., environmental impact of Chinese manufacturing, human rights, national security and xenophobia) could change the tradeoffs.
- bmitc 3y ago
  > environmental impact of shipping electronics from China (or between any two points on earth near a major harbor) on a cargo vessel is zero How does that work? Or are you just referring to electronic components only and it being zero relatively speaking?
  - NhanH 3y ago
    Modern container cargo ships are huge. Even though in aggregate the absolute pollution is a big numbers, when you amortize over the volume, shipping an item has about a very close to zero impact on environment. And this is not some hand-waving explanation either, since other factors dominates the environmental impact (for example, shipping from Newegg to your office is probably a magnitude more polluted), it doesn't matter if the factory is in China or the US. This applies to a lot more things, even lower value stuffs like fruit. Which is why local produce might have more environmental impact than imported mass produce fruits, though I don't have a citation for this on hand.
    - TJSomething 3y ago
      I would add that the numbers are possible to compare, but container shipping is pretty efficient. One container from Shenzhen to Oakland (~10,000 km) is going to be the CO₂ equivalent of burning 60 gallons of gasoline.
    - diydsp 3y ago
      "According to Irene Blooming, a spokeswoman for the European environmental coalition Seas at Risk, the fuel used in oil tankers and container ships is high in sulfur and cheaper to buy compared to the fuel used for domestic land use. "A ship lets out around 50 times more sulfur than a lorry per tonne of cargo carried."[1] "Of total global air emissions, marine shipping accounts for 18 to 30 percent of the nitrogen oxides and 9% of the sulfur oxides."[1] "One source of environmental stresses on maritime vessels recently has come from states and localities, as they assess the contribution of commercial marine vessels to regional air quality problems when ships are docked at port.[33] For instance, large marine diesel engines are believed to contribute 7 percent of mobile source nitrogen oxide emissions in Baton Rouge and New Orleans, Louisiana. Ships can also have a significant impact in areas without large commercial ports: they contribute about 37 percent of total area nitrogen oxide emissions in the Santa Barbara, California area, and that percentage is expected to increase to 61 percent by 2015."[1] " Maritime transport accounts for 3.5% to 4% of all greenhouse gas emissions, primarily carbon dioxide.[1][27] According to the World Bank, in 2022, the shipping industry's 3% of global greenhouse gas emissions make it "the sixth largest greenhouse gas emitter worldwide, ranking between Japan and Germany."[1] [1] https://en.m.wikipedia.org/wiki/Environmental_effects_of_shipping https://en.m.wikipedia.org/wiki/Environmental_effects_of_shi...

jonathankoren 3y ago

Yeah. China is full of make-work programs. It's obvious. For example, every Chinese city has sidewalks made, not of poured concrete, but rather 30 cm x 30 cm ceramic tiles. Due to historic city planning, the Chinese tend to park their cars on the sidewalks, which inevitably breaks the tiles, thus causing regular replacement. These tiles are laid not by some sort of brick laying machine, but rather by hand. The sidewalk by my house was poured in 1968. I know that, because there's a date stamped in it. A couple of blocks over there's a sidewalk that someone scrawled graffiti into. "Elton John 75". There's literally nothing wrong with either of these sidewalks. They're not cracked, nor buckled. China doesn't need to replace every sidewalk every two or three years, but they choose to.

serf 3y ago
just a counter-point, if it is at all; I grew up in SoCal with poured sidewalks around the entire area. Nearly every single one of them was destroyed by nearby trees or shrubbery extending their roots under the thing and cracked it up into a million pedestrian-tripping pieces. These sidewalks were from the 60s and 70s too -- thing is that they cracked 20-30 years ago and no one ever bothered to replace. The home owners i've spoken to that wish they could were confronted with the aspect of being forced to pay for their entire street lest they wish to pull permits to repair their small section. So you have this new problem with a liability tug-of-war between well-wishing civillians against the cost-saving municipalities, and to be clear this was more than one single municipality, i've seen it across SoCal. So, what i'm trying to get across is that there is a middle ground between 'needless replacement for the sake of generating work' and 'neglect', and neither China or the US has seemed to pin that middle down yet : but that needless replacement regime sure sounds nice as a pedestrian that just wants to use the goddamn sidewalk. I've seen busy-work before, that just doesn't strike me as that.
thebradbain 3y ago
Truthfully, based on the state of our sidewalks in the richest cities of the US like NYC, SF, Chicago, and LA— we need to be replacing them maybe not every two or three years, but at least every 5. Right now it seems like 20, if we’re lucky. Meanwhile most towns and newer parts of smaller, less affluent cities, or even wealthier suburbs don’t even _have_ sidewalks. I think it’s ultimately part of our philosophy toward the built environment that “Europe is built with screws, the US is built with nails”— we build something that gets the job done at the time it’s built, then never come back to it. Maybe that allowed us to build fast, but now the bigger issue is maintenance of what we already have.

coldtea 3y ago

>Places like China assemble stuff by hand that would be automated in higher wage countries not because they don't know how, or higher wage countries have developed some new software they haven't. It's because wage costs are low. Not only. It's also because important parts can't be automated with current technology. It's also not that Chinese factories substitute robots for manual workers. They automate the shit out of them too, and have the same share of robots vs workers that a western factory would...

eternityforest 3y ago
How much of that is because the labor is too cheap for anyone to care about automating anything?
- coldtea 3y ago
  How much of what "that"? I said the opposite, that in China they automate just as much as western factories (if not more, see the sibling comment).
yorwba 3y ago
Chinese factories have more robots per worker than factories in most Western countries, behind only Korea, Singapore, Japan and Germany: https://ifr.org/ifr-press-releases/news/china-overtakes-usa-in-robot-density https://ifr.org/ifr-press-releases/news/china-overtakes-usa-... (in 2021)
- Archelaos 3y ago
  Without further context, we cannot say whether a lower number of robots in the US is an indication of inferiority or superiority to China. Example: A company I was working for produced booklets with their own autmatic book printing binding machine. Not long ago, they outsourced it to a printer because it was cheaper that way. So the single more capable printer's "robot" is replacing the need for a lot of other not so efficient small "robots".
  - 3y ago

defanor 3y ago

And the article only mentions reduction of costs with automation. Would be strange enough for some tech-oriented magazine, but this one is called "The Economist". Though maybe it is supposed to be read just as a futuristic speculation, or as an overview for people unaware that automation is possible.

ketzo 3y ago

I think you make a good point, but also: There is such a thing as pressure to automate. You could imagine a world where wage costs just stay low, and companies just keep making stuff by hand. Companies need to know that there is a cost-benefit trade to be made. And so an article like this is nodding at that pressure from the opposite direction: "Hey, you should be aware that automation (cost savings) are totally feasible, even if they're not realistic for you at this exact moment."

firecall 3y ago

A contributing factor is also that they are a Communist State with a lot of people that need jobs! You could argue that Full Employment is tenet of Communism. I'll leave debate about what Communism is and what the CCCP is and isn't to the rest of the internet. I'm sure there are people out there who would love to have a conversation about it... LOL ;-)

yieldcrv 3y ago
One of the best things about doing business and also non monetary interactions globally is opting out of local distractions As soon as you unsubscribe to US perspectives, nobody is detailing conversations about the PRC ultimately winning that territory and the ways it behaves, it is very easy to operate there on a day to day basis
snapcaster 3y ago
Your brain has been melted by US media I'm afraid. Using 20th century soviet style communism as your mental model for modern China won't serve you well
dontlaugh 3y ago
It’s certainly true that the state has different behaviour when ruled by the working class (like in China, Vietnam, Cuba) vs the capitalist class (like in most other countries). That doesn’t necessarily mean everything is centrally planned vs everything is a market. A variety of approaches can be used to satisfy the interests of the ruling class, within the constraints they have. So in China there is definitely state intervention to ensure there are enough good jobs. But that can also mean speeding up development and automating so the jobs are better, while creating new jobs by producing new things society needs or wants.
- dudeofea 3y ago
  I don't know about Vietnam and Cuba, but what evidence is there that China is ruled by the working class?
  - 3y ago

rcxdude 3y ago

Automation sits in a lot of different positions: sometimes it's a cheaper option overall, sometimes it's actually more expensive but more flexible than manual assembly, and it varies greatly from operation to operation (some almost exclusively manual and some almost exclusively automated)

dv_dt 3y ago
Usually it’s more expensive to setup and less flexible, but higher volume
- iancmceachern 3y ago
  Yes, for example it costs billions to tool up an automated autotive plant

tuatoru 3y ago

The other point that is completely missing is that a factory does not exist in splendid isolation. If there's a problem with the FR-4 circuit boards, or the pick and place machines are misbehaving, or some of the chip-scale components that are being placed are faulty, or the wiring harness is wrong, or the molds for the body of the product need modifying because the product is cracking... ... it's much easier to deal with your supplier just down the road than one across the world. These days stuff is manufactured in China because (the) stuff (that makes up the stuff) is manufactured in China. Additive manufacturing is still too slow and expensive for mass production. As a recent Ars Technica article put it, it's fine for supercars but not for cars.

ilyt 3y ago
I've listened to few interviews with people manufacturing in China and "you have to have someone on the ground there" repeated in pretty much all of them.
- baby_souffle 3y ago
  I was told by people that work for FAANG that each company reserves some number of first class seats for the daily SFO to China flights specifically for this reason. If there an issue, some engineer responsible for the part can be in the factory in under 24h
  - awinter-py 3y ago
    only 1 of faang manufactures consumer-facing hardware? could see why AAPL does this, but the others?
    - Philpax 3y ago
      Meta (Quest 2/3/Pro, Meta Portal), Google (Pixel, home automation hardware, much more), Amazon (Echo, Kindle, Ring), and Microsoft (Surface lineup and much more) all manufacture hardware.