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One thing people are not aware of and am curious of how big it really is: China manufacturing laundry. Essentially, goods are manufactured in China, then launde

by csomar 2y ago

One thing people are not aware of and am curious of how big it really is: China manufacturing laundry. Essentially, goods are manufactured in China, then laundered to a third-party country and then exported to the US/EU. This come in two flavors, legal laundry where the local manufacturer satisfies the conditions; and illegal one where bribes are paid to pass goods. > https://antidumping.vn/eu-chinabike-duty-hits-indonesia-malaysia-sri-lanka-tunisia-n12045.html https://antidumping.vn/eu-chinabike-duty-hits-indonesia-mala... I come from a country that does this. Massive deficit with China vs. an equivalent surplus with the EU. Weak manufacturing base that essentially import Chinese, does some packaging and then export it back.

mylastattempt 2y ago
This way of working is marketed as such by Chinese manufacturers. They will refer to it as something along the lines of: Made in South East Asia. Sometimes they produce the products in (e.g.) Vietnam, but more often than not, everything is done in China, then shipped to Vietnam for packaging or adding a "Made in Vietnam" label, and shipped out from there. Thailand is another upcoming player in this scheme. Large companies are well aware of this and happily use their existing Chinese suppliers' SEA entity to avoid sanctions and tarrifs, or to show that they are moving away from having everything Made in China. To be fair, only gullible or naive people could truly believe that products coming from any part of Asia are not made, controlled, or otherwise influcnced by the Chinese.
- lukan 2y ago
  "or otherwise influcnced by the Chinese" That last statement makes it almost meaningless. Then you can also say, no product on this world was made without US influence. Otherwise all those countries like Vietnam do have a agency of their own (Vietnam for example even succesfully fought china before with military) And south korea and Japan (and Taiwan) also are somewhat out of the direct control of china.
- csomar 2y ago
  The country am from is neither in Asia nor influenced by China. People do it because there is money in doing it, simple as that. Chinese accept it (they sell low what other people sell high) because regulation/tariffs put them at a disadvantage and they just have to suck it up.
- trimethylpurine 2y ago
  Do you work in manufacturing? In my experience, no, companies are generally not aware and not accepting of this and brands/licensing requirements ensure that's the case. For sure in regards to valuable trademarks. A manufacturer would absolutely not want to risk their entire business. And that's all it takes for a brand to pull your license. Now what? Everyone is fired and a $120M contact is lost over a few cents per unit. It's possible that it happens as Chinese factories skirt the rules and make false presentation, but manufacturers spend a lot of money to send someone to many countries and factories to trial and vet them over the course of years to meet brand requirements for licensure before they begin manufacturing with them and often through repeat checks during the manufacturing process. But I'd say that's rare, again, in regards to branded goods of valuable trademarks.
tivert 2y ago
> One thing people are not aware of and am curious of how big it really is: China manufacturing laundry. Essentially, goods are manufactured in China, then laundered to a third-party country and then exported to the US/EU. IIRC, a lot of stuff that's labeled "Made in Singapore" is/was basically that.
- doppp 2y ago
  As a Singaporean, I have not seen this. Do you have any proof?
  - fooker 2y ago
    Look around from a rooftop, do you see many factories with smoke coming out of chimneys?
    - bluGill 2y ago
      Most factoies don't have a chimney. electric powers them.
      - csomar 2y ago
        You'd be surprised. Look up Jurong Island.
    - csomar 2y ago
      Yes: https://maps.app.goo.gl/1ZDRiQdhr3Ngf5qP6 https://maps.app.goo.gl/1ZDRiQdhr3Ngf5qP6 I'd not be surprised if this activity is quite limited in Singapore given that they have been under a tight microscope lately. Money laundering used to be their business but now they are rich and make money "legitimately" and within the "international" framework.
      - gruez 2y ago
        To be fair, having an industrial district doesn't preclude tariff laundering either. If you're trying to pass chinese goods as singaporean, you'd want your address to be a factory, rather than an office in a business park somewhere. Even if that wasn't a consideration, at the very least you'd need warehouse space to repackage/reship goods, so you'd need to rent out a warehouse/factory anyways.
kayewiggin 2y ago
There's not too much fake origin stuff from Vietnam to US, which is the largest SEA country exporting to US. "However, new research from Harvard Business School and Duke University paints a more nuanced picture — rerouting appears to be lower than is imagined. While trade rerouting through Vietnam does occur, its scale appears far smaller than previously thought. The study found that in 2021, about 16.1 per cent of Vietnamese exports to the US — roughly US$15.5 billion — could be classified as potential rerouting when analysed at the product level. But when the researchers examined individual firms — tracking specific products flowing from China through Vietnam to the US — the figure fell to just 1.8 per cent, or US$1.7 billion." https://fulcrum.sg/vietnam-china-and-rerouting-when-perceptions-matter-as-much-as-reality/ https://fulcrum.sg/vietnam-china-and-rerouting-when-percepti...
- cman1444 2y ago
  What I wonder is: Of the items that are rerouted, does Vietnam (or other similar countries) tend to move up the value chain over time? Or do the supply chains just stay as they are. I suspect, possibly hopefully, that over time the "rerouting" countries would evolve from simple assembly/repackaging to sourcing more granular pieces of the manufacturing process from within their own borders. How fast that might happen is another question. If anyone has any sources on this I would love to read more about it, I'm just not sure how to find them.
chvid 2y ago
One example is what you seem to refer to; a solar panel reading made in Vietnam - assembled in Vietnam but by a Chinese owned company with all Chinese components. Another example is the iPhone reading made in China with a dollar value of 400 but the true value add in China is much lower as all the IP, profit margins, and high value components belong somewhere else. This means that even though these numbers look very unbalanced it is still Western companies that make biggest part of the profit. (At least so far though things are clearly changing with Chinese companies are climbing up the value chain.)
- doctorpangloss 2y ago
  People buy iPhones for their software, which is all made here. Otherwise all phones are black rectangles. The hardware isn’t that important.
  - riskyingo 2y ago
    cool, so no other country except US should buy that crap
  - Barrin92 2y ago
    it's the opposite. People buy iPhones and Apple products for the quality of their hardware and the cost of the devices themselves reflects this. Apple is one of the least software focused tech companies in the world. Everyone except for American teens obsessed with the colors of their chat bubbles uses WhatsApp, Telegram or FB Messenger and other completely platform independent apps. Nobody's ever bought an iphone for Apple Maps, everyone runs around with Google software on their phone.
    - wiseowise 2y ago
      > Nobody's ever bought an iphone for Apple Maps, everyone runs around with Google software on their phone. It is still running on Apple platform. I'm buying an iPhone, because I know that I'll get consistent Apple experience that is same across all of my devices, unlike zoo of Android + Windows/Linux.
ChumpGPT 2y ago
Both Canada and Mexico are guilty of this. For years they would import products and do some light assembly and label it as Made in Canada or Mexico. Since Canada gives China Most Favored Nation status, importers can avoid duties and export into the USA since there is a Free Trade Agreement(NAFTA). It took a while for US Customs to crack down on this but it finally did and they now pay very close attention to where the origin of the item was. Unfortunately it went on long enough to destroy many American industries. Canada and Mexico made 100's of billions of these schemes at the USA's expense.
- cipher_accompt 2y ago
  Is the problem Canada and Mexico, or is it corporations and business elites exploiting loopholes and abusing the system? Manufacturing in Canada was destroyed by competition in China. The root issue is the unchecked market power of businesses and the complete lack of repercussions for corporations and business elites that destroy industries, social systems, and deplete natural resources—without accountability for long-term consequences.
  - AnthonyMouse 2y ago
    You could also make the opposite argument. If you want to manufacture things in the US, the real estate costs too much because of artificial housing scarcity, the tax system favors international supply chains over domestic ones, the regulatory environment favors large incumbents over small/new companies, etc. And if you make it disfavorable to manufacture things in the US, you create the incentive for corporations to do whatever they have to do to manufacture it somewhere else. Don't think of corporations as having agency. Think of them like beasts that have to be herded into the field where you want them. If all your cows are in the neighbor's field, it's not the cows that you should blame and yelling at the cows is not going to help you.
    - cipher_accompt 2y ago
      You're speaking my language. Incentive-based programming of behavior drives optimization for rewards. For example, giant anticompetitive firms dominating our economies create corporate environments that shape executives to prioritize short-term profits by exploiting their undue influence to inflate their own compensation. This behavior depletes natural wealth, sacrifices long-term opportunities to more competitive firms abroad, and even jeopardizes their companies’ sustainability. Boeing and Intel are prime examples of how executives optimizing for short-term gains leave behind destructive long-term legacies. Governments, too, create regulatory, taxation, and broader economic frameworks that influence incentives and shape behavior.
deleted 2y ago
[deleted]
ReptileMan 2y ago
My EU member country assembled chineese cars for a while. I was joking that it came in two parts - the car and the badge and they just glued them together here. From what I understood later it was close to the truth.
nimish 2y ago
CKD/SKD is the legal version of this tactic. It's not new. It's a great way to get around tariffs though!
DanielHB 2y ago
It is not much different from all the European, US and Japan car companies do in Brazil. Brazil has high tariffs (for pretty much everything imported) so companies set up local factories to make the goods. Thing is those factories are not factories, they are assembly lines, minimal amount of engineering or even manufacturing happens there. The only big difference is that those goods are kept internally in the Brazilian market, they are not re-exported out as far as I am aware. Apple also has a factory in Brazil that makes most (all?) of iphones and ipads sold in Brazil. Most appliances companies (Bosch, Eletrolux, etc) in the local market also do the same.

by csomar 2y ago

mylastattempt 2y ago

This way of working is marketed as such by Chinese manufacturers. They will refer to it as something along the lines of: Made in South East Asia. Sometimes they produce the products in (e.g.) Vietnam, but more often than not, everything is done in China, then shipped to Vietnam for packaging or adding a "Made in Vietnam" label, and shipped out from there. Thailand is another upcoming player in this scheme. Large companies are well aware of this and happily use their existing Chinese suppliers' SEA entity to avoid sanctions and tarrifs, or to show that they are moving away from having everything Made in China. To be fair, only gullible or naive people could truly believe that products coming from any part of Asia are not made, controlled, or otherwise influcnced by the Chinese.

lukan 2y ago
"or otherwise influcnced by the Chinese" That last statement makes it almost meaningless. Then you can also say, no product on this world was made without US influence. Otherwise all those countries like Vietnam do have a agency of their own (Vietnam for example even succesfully fought china before with military) And south korea and Japan (and Taiwan) also are somewhat out of the direct control of china.
csomar 2y ago
The country am from is neither in Asia nor influenced by China. People do it because there is money in doing it, simple as that. Chinese accept it (they sell low what other people sell high) because regulation/tariffs put them at a disadvantage and they just have to suck it up.
trimethylpurine 2y ago
Do you work in manufacturing? In my experience, no, companies are generally not aware and not accepting of this and brands/licensing requirements ensure that's the case. For sure in regards to valuable trademarks. A manufacturer would absolutely not want to risk their entire business. And that's all it takes for a brand to pull your license. Now what? Everyone is fired and a $120M contact is lost over a few cents per unit. It's possible that it happens as Chinese factories skirt the rules and make false presentation, but manufacturers spend a lot of money to send someone to many countries and factories to trial and vet them over the course of years to meet brand requirements for licensure before they begin manufacturing with them and often through repeat checks during the manufacturing process. But I'd say that's rare, again, in regards to branded goods of valuable trademarks.

tivert 2y ago

> One thing people are not aware of and am curious of how big it really is: China manufacturing laundry. Essentially, goods are manufactured in China, then laundered to a third-party country and then exported to the US/EU. IIRC, a lot of stuff that's labeled "Made in Singapore" is/was basically that.

doppp 2y ago
As a Singaporean, I have not seen this. Do you have any proof?
- fooker 2y ago
  Look around from a rooftop, do you see many factories with smoke coming out of chimneys?
  - bluGill 2y ago
    Most factoies don't have a chimney. electric powers them.
    - csomar 2y ago
      You'd be surprised. Look up Jurong Island.
  - csomar 2y ago
    Yes: https://maps.app.goo.gl/1ZDRiQdhr3Ngf5qP6 https://maps.app.goo.gl/1ZDRiQdhr3Ngf5qP6 I'd not be surprised if this activity is quite limited in Singapore given that they have been under a tight microscope lately. Money laundering used to be their business but now they are rich and make money "legitimately" and within the "international" framework.
    - gruez 2y ago
      To be fair, having an industrial district doesn't preclude tariff laundering either. If you're trying to pass chinese goods as singaporean, you'd want your address to be a factory, rather than an office in a business park somewhere. Even if that wasn't a consideration, at the very least you'd need warehouse space to repackage/reship goods, so you'd need to rent out a warehouse/factory anyways.

kayewiggin 2y ago

There's not too much fake origin stuff from Vietnam to US, which is the largest SEA country exporting to US. "However, new research from Harvard Business School and Duke University paints a more nuanced picture — rerouting appears to be lower than is imagined. While trade rerouting through Vietnam does occur, its scale appears far smaller than previously thought. The study found that in 2021, about 16.1 per cent of Vietnamese exports to the US — roughly US$15.5 billion — could be classified as potential rerouting when analysed at the product level. But when the researchers examined individual firms — tracking specific products flowing from China through Vietnam to the US — the figure fell to just 1.8 per cent, or US$1.7 billion." https://fulcrum.sg/vietnam-china-and-rerouting-when-perceptions-matter-as-much-as-reality/ https://fulcrum.sg/vietnam-china-and-rerouting-when-percepti...

cman1444 2y ago
What I wonder is: Of the items that are rerouted, does Vietnam (or other similar countries) tend to move up the value chain over time? Or do the supply chains just stay as they are. I suspect, possibly hopefully, that over time the "rerouting" countries would evolve from simple assembly/repackaging to sourcing more granular pieces of the manufacturing process from within their own borders. How fast that might happen is another question. If anyone has any sources on this I would love to read more about it, I'm just not sure how to find them.

chvid 2y ago

One example is what you seem to refer to; a solar panel reading made in Vietnam - assembled in Vietnam but by a Chinese owned company with all Chinese components. Another example is the iPhone reading made in China with a dollar value of 400 but the true value add in China is much lower as all the IP, profit margins, and high value components belong somewhere else. This means that even though these numbers look very unbalanced it is still Western companies that make biggest part of the profit. (At least so far though things are clearly changing with Chinese companies are climbing up the value chain.)

doctorpangloss 2y ago
People buy iPhones for their software, which is all made here. Otherwise all phones are black rectangles. The hardware isn’t that important.
- riskyingo 2y ago
  cool, so no other country except US should buy that crap
- Barrin92 2y ago
  it's the opposite. People buy iPhones and Apple products for the quality of their hardware and the cost of the devices themselves reflects this. Apple is one of the least software focused tech companies in the world. Everyone except for American teens obsessed with the colors of their chat bubbles uses WhatsApp, Telegram or FB Messenger and other completely platform independent apps. Nobody's ever bought an iphone for Apple Maps, everyone runs around with Google software on their phone.
  - wiseowise 2y ago
    > Nobody's ever bought an iphone for Apple Maps, everyone runs around with Google software on their phone. It is still running on Apple platform. I'm buying an iPhone, because I know that I'll get consistent Apple experience that is same across all of my devices, unlike zoo of Android + Windows/Linux.

ChumpGPT 2y ago

Both Canada and Mexico are guilty of this. For years they would import products and do some light assembly and label it as Made in Canada or Mexico. Since Canada gives China Most Favored Nation status, importers can avoid duties and export into the USA since there is a Free Trade Agreement(NAFTA). It took a while for US Customs to crack down on this but it finally did and they now pay very close attention to where the origin of the item was. Unfortunately it went on long enough to destroy many American industries. Canada and Mexico made 100's of billions of these schemes at the USA's expense.

cipher_accompt 2y ago
Is the problem Canada and Mexico, or is it corporations and business elites exploiting loopholes and abusing the system? Manufacturing in Canada was destroyed by competition in China. The root issue is the unchecked market power of businesses and the complete lack of repercussions for corporations and business elites that destroy industries, social systems, and deplete natural resources—without accountability for long-term consequences.
- AnthonyMouse 2y ago
  You could also make the opposite argument. If you want to manufacture things in the US, the real estate costs too much because of artificial housing scarcity, the tax system favors international supply chains over domestic ones, the regulatory environment favors large incumbents over small/new companies, etc. And if you make it disfavorable to manufacture things in the US, you create the incentive for corporations to do whatever they have to do to manufacture it somewhere else. Don't think of corporations as having agency. Think of them like beasts that have to be herded into the field where you want them. If all your cows are in the neighbor's field, it's not the cows that you should blame and yelling at the cows is not going to help you.
  - cipher_accompt 2y ago
    You're speaking my language. Incentive-based programming of behavior drives optimization for rewards. For example, giant anticompetitive firms dominating our economies create corporate environments that shape executives to prioritize short-term profits by exploiting their undue influence to inflate their own compensation. This behavior depletes natural wealth, sacrifices long-term opportunities to more competitive firms abroad, and even jeopardizes their companies’ sustainability. Boeing and Intel are prime examples of how executives optimizing for short-term gains leave behind destructive long-term legacies. Governments, too, create regulatory, taxation, and broader economic frameworks that influence incentives and shape behavior.

deleted 2y ago

[deleted]

ReptileMan 2y ago

My EU member country assembled chineese cars for a while. I was joking that it came in two parts - the car and the badge and they just glued them together here. From what I understood later it was close to the truth.

nimish 2y ago

CKD/SKD is the legal version of this tactic. It's not new. It's a great way to get around tariffs though!

DanielHB 2y ago

It is not much different from all the European, US and Japan car companies do in Brazil. Brazil has high tariffs (for pretty much everything imported) so companies set up local factories to make the goods. Thing is those factories are not factories, they are assembly lines, minimal amount of engineering or even manufacturing happens there. The only big difference is that those goods are kept internally in the Brazilian market, they are not re-exported out as far as I am aware. Apple also has a factory in Brazil that makes most (all?) of iphones and ipads sold in Brazil. Most appliances companies (Bosch, Eletrolux, etc) in the local market also do the same.