Genuinely curious, HN folks - for those who downvoted this comment, can you share why you did so? I don’t personally mind sarcasm as long as it’s not aimed maliciously at an individual, and I read this comment as a sarcastic way of saying “how come American leadership in general doesn’t have a similar plan”. Do folks just downvote sarcasm as a rule?
I’ve never studied economics so there is a very good chance I’m reading the plot wrong somehow, but it looks like US manufacturing has been increasing since the 70’s at least.
It takes up less of the economy of maybe, and we might focus on upscale things that have less consumer visibility like industrial stuff, but manufacturing in the US seems to be in an OK spot.
It does seem like a situation where the pie just grew around it. There are so many kinds of job now. Even manufacturing is skilled work, more than it ever was. Their skill might be the ins and outs of a particular machine (like one of those big green injection molding machines), but it's as skilled as any kind of office work.
Also the rest of the world’s pie grew, which is also fine.
The US made everything… for a while, after the rest of the world had blown up all of each other’s factories. Nobody is hoping for a repeat of that whole mess!
I don't have the ability to downvote yet but I can pitch in an explanation:
Setting China as an outlier that does reshoring/industrial planning at the expense of the [American] worker is a politic fantasy. It forgets that reshoring is a global phenomenon also found in democracies [1] that is rather the result of a more uncertain world where logistics change with the success and wanning of political favors and alliances.
As I mentioned in another comment, this view is skewed. Even China has lost more jobs to automation than the US has lost to China. There will just be fewer and fewer jobs in manufacturing, no matter where it's done.
Further, from a purely economic sense, outsourcing makes the most sense. Most people will be able to by everything for much cheaper which more than compensates for the lost jobs in one area. We also have record high employment. So from a purely economic perspective, we are doing great!
To me the real issue is the strategic importance of certain manufacturing areas. China can build 200 military ships in the time we build one. 20 subs in the time we build slightly more than one. We need to get our military supply chain back in shape if we want to remain globally dominant and keep us and our partners safe!
Manufacturing is low value commodity work. If for some reason a country has lots of low value commodity bodies to screw things on, then focusing on manufacturing makes sense. But if you want a high standard of living, you need to have high productivity. That is incompatible with humans working assembly lines as they simply aren't that productive.
The US economy is the world leader and continues to pull ahead of everyone else.
This take seems incompatible with the general prosperity nations that focus on manufacturing experience - look at the major economies of the 20th century, or of China’s booming wealth roughly commensurate with the stagnation developed nations are experiencing as they’ve outsourced manufacturing to China.
The apparent paradox is easily explained by the fact that China and the west are not starting from the same place, the average US worker is far wealthier since they have already gone through widespread industrialization. Manufacturing will show massive % gains on a smaller economy, but the kinds of labor that lifts you from a poor argriculturally eventually top out.
That’s what this “made in China” initiative is tracking - moving up the value chain in China.
Also, the post ww2 US period is unique in that the rest of the world either didn’t have skilled manufacturing at all or not at the scale the Americans had immediately after the war. Everyone else was bombed or not fully developed yet - it’s hard to draw universal lessons from the American experience, but it makes sense to look at the other nations that progressed after that. Like Japan for example, which was industrialized but industrialized further up the value chain after WW2
This is a commonly restated falsehood, manufacturing doesn’t have to be a commodity, you can just have labor laws and unions. The US had a thriving manufacturing sector for generations and it was the backbone of our economy, then we gave it all away in the name of cheap crap from Walmart and Amazon and sold out our middle class.
Look at Germany as an example, they do a lot of manufacturing and they have an excellent quality of life. They also make things that are objectively much higher quality than what comes out of Asia.
We can have both, an educated knowledge worker base and a manufacturing workforce, they are not mutually exclusive.
Except the high value jobs is in support of low value areas. Of which if those are outside your country then you are hosed.
For example google extracts value from sellers. If those sellers themselves sell product made and developed in china. Then soon enough the Chinese system will move up the chain by use of competitive regulatory, skill, and supply chain advantages
It sounds like you have a pretty antiquated view of manufacturing. It looks nothing like what you are calling it: "low value commodity bodies to screw things on." No offense to you in particular, but it sounds like you haven't updated your views since 1975. This is common because most manufacturing happens well outside of the lives of people in tech or service work.
Most screws these days are not screwed on by "bodies." They are screwed on by machine. Much of employment in manufacturing these days is in higher value work: operating CNC machines, maintaining robots and other machinery, engineering, and so on.
If manufacturing work is so low value and commodity, why do manufacturing jobs pay $20k more per person, on average, than service work?
Why does the manufacturing sector have annual average compensation of $70k, despite taking place in generally LCOL areas?
Do you look at a modern car and say: wow, what a low-value commodity good?
The Economist article you cite says nothing about manufacturing and does not support your point. In fact, when you look at the total output of manufacturing today versus 1947, it is about the same percentage of our GDP: even though manufacturing employment has dropped from 35% of Americans to less than 9% because of efficiency gains. The idea that manufacturing has disappeared from America is false and a myth.
I invite you to actually go tour a modern manufacturing facility with high speed robotic computer-controlled production lines. It may make you think differently about the physical comforts you depend on in your life.
Some manufacturing, yes. But most manufacturing is highly complex, starting with t he suppliers, supply lines, workers etc. And manufacturing often brings in itself innovation.
"of low value commodity bodies to screw things on"
Most manufacturing is not so easy. Stitch some shoes in Africa? Maybe but even this is hard to scale in this environment. Try to assemble a complex product there. Hell, you might not even have reliable power and have to start building your own power backups there.
Not talking about military dependencies. What if Taiwan returns to China and does not deliver Chips anymore? How much of the world market do they supply? 70%
I don't think I've ever met a blue collar worker who has thought outsourcing was a good idea. So, maybe the generalization of us worker is a bit too encompassing.
Maybe they didn't outright say it the way you posit.
But when Walmart came to town in early 2000s, people happily supported it with open arms. Bragging about how cheap they were getting stuff while the mom and pop stores and local sourced department stores folded one by one
Yes people have to stretch their money as far as possible. Not everyone makes six figures and has zero kids. People working at factories with families have to make economically smart decisions. It’s a failure of government policy, that frankly hinges on treason, that we even allowed for our small towns and manufacturing base to be hollowed out.
No worker ever supported this, it was the intellectual and moneyed class that pushed for this and sold it as some obviously great thing that definitely wasn’t too good to be true.
>>> People working at factories with families have to make economically smart decisions.
The poor and lower class alone didn't make Walmart a retail titan.
It was the middle class who launched walmart into the top spot and fortunately for them, compared to their lower income peers, they did not have to make those life or death cost saving decisions but chose to like when they wanted a new flat screen TV or niche kitchen appliance
These purchases werent truly necessary and id even argue whatever perihperal like a tv and kitchen aplliance they had owned was in working condition, maybe not the top of the line cutting edge device. So this wasn't truly a needed product except for upgrading for the sake of upgrading that the middle class started splurging on the idea of a discount being presented.
During that time, as TVs improved year over year I knew several families who would trade theirs in for the yearly imorovement almost like an iPhone upgrade.
I don't think someone has to necessarily be wage earning to be considered middle class.
Middle Class is a fairly broad and ubiquitous term used in the USA to refer to a group of the population who doesn't necesarily live paycheck to paycheck or is on government assistance and whose definition probably varies person to person.
Not sure about the downvotes, but I was curious which part you were referring to because it is a broad group and can be an ambiguous term depending on who you're talking to. The part I personally think of as middle class arent really Walmart shoppers.
Western countries have started strategic plans to become less dependent on Chinese manufacturing and especially the Chinese dominance in electronics manufacturing.
For such plans to succeed it is important to not mix them up with rural/flyover state job creation programs. One reason Chinese manufacturing has been a runaway succes is because how close their factories are to big cities and technical universities.
A future German Shenzen should be close to a big city with many technical universities nearby. A future American Shenzen should a stone throw away from Silicon Valley.
I agree on the notion. I do wonder though if a US Shenzhen needs to be close to SV. It would be ideal, but given how hard it is to build anything in SV, I wonder if a places like Austin would be a solid solution to consolidate hardware manufacturing.
If the US federal government bans noncompetes nationwide, then we’ll get a true competitor or successor to Silicon Valley. Until then, there’s little chance of any US metro to usurp it unless states like TX ban it themselves
This seems largely true. I do wonder about "The west has the better part of a century's worth of catching up to do in know-how.". Does this truly extend to the West? Manufacturing in Germany seems alive and very healthy for more advanced products. Not sure about other European countries. I also understand that Mexico actually is very good for high value-add manufacturing.
The intersection of all three. The overall metric.
Obviously if we make everything expensive and take 3x longer we can do better in the quality category. But attempting to move at the same speed will make us do things at a lower quality and/or higher price.
Also we likely don't even have the ability to move as fast as china.
Chinas manufacturing is only “good” because we offshored US manufacturing to it. Undoing this will result in the US regaining this capacity. You can make arguments about pricing, but luckily the political class is realizing there are more important things.
Of course he can. What makes a business have government approval is two things.
1. economic viability.
2. No visible opinion against China.
Your saying there's something else:
3. Visible support FOR China.
Number 3 is not required. You don't see Marvel movies and hollywood pandering to Chinas greatness do you? You only see an absense of dissent against China.
Here take a look at the clip. We all have the ability to judge tonality and the detail Elon puts into that statement to make the qualitative judgement call whether he's pandering or he believes in what he says:
Also one day I recommend you go to China and see what's going on there with your own eyes. It's like going to Yosemite half dome vs. looking at pictures of it. The difference between the US and China will floor you.
> What makes a business have government approval is two things
I see no evidence that you have the expertise to make this claim. It’s just an opinion you are stating as fact.
> We all have the ability to judge tonality and the detail Elon puts into that statement to make the qualitative judgement call whether he's pandering or he believes in what he says…
“In accuracy, judges range no more widely than would be expected by chance, and the best judges are no more accurate than a stochastic mechanism would produce. When judging deception, people differ less in ability than in the inclination to regard others' statements as truthful.”
So all this tells us is that you are someone who personally finds Elon credible. Given your own stated views of China, this seems like just confirmation bias.
>So all this tells us is that you are someone who personally finds Elon credible. Given your own stated views of China, this seems like just confirmation bias.
Could be. I'm asking you to watch that statement and judge for yourself. I don't believe or trust Elon utterly and completely. I'm not even close to being a huge fan. But from watching that statement I do both agree with him and believe he is being honest in that specific case.
>I see no evidence that you have the expertise to make this claim. It’s just an opinion you are stating as fact.
I'm Chinese by race. I'm born in the US, grew up in the US, lived in China for years.
But what I'm saying here is more common sense. Look at hollywood. There's a huge market in China for hollywood movies. So hollywood does pander to Chinas business requirements. What do you see in Hollywood movies? Do you see people fawning over the greatness of China? No. In hollywood you just see movies with complete absence of criticism against China. This is in stark contrast to the American media and cultural landscape which hollywood usually reflects accurately.
So just use your own eyes in all the movies you watch. Hollwood panders to China by not criticising china. They don't pander to China by praising China.
> But from watching that statement I do both agree with him and believe he is being honest in that specific case.
Yes, and the linked paper shows that this is a reflection of your existing bias about him, and not whether he is being truthful. It means that the clip of Elon tells us nothing at all about why he’s making the statement, even if judged by experts.
I don’t see how Hollywood is evidence of anything. They want their movies to have the widest audience possible, so their movie content is made as inoffensive as possible.
Elon’s cars are not movies.
For a counterexample, Tim Cook praises China, even as reports suggest that Apple and its shareholders are afraid of their dependence on China and are seeking to lessen it.
Elon has never behaved like Hollywood, and has a long history of saying whatever he thinks people want to hear. I see no reason to think that this is any different.
>Yes, and the linked paper shows that this is a reflection of your existing bias about him, and not whether he is being truthful. It means that the clip of Elon tells us nothing at all about why he’s making the statement, even if judged by experts.
Except I told you I'm not a fan of elon. I cited him because he's both vocal about his opinion in China. And unlike you both Elon and I have experience with China. You likely don't and have never even set foot in China.
>I don’t see how Hollywood is evidence of anything. They want their movies to have the widest audience possible, so their movie content is made as inoffensive as possible.
That's every business on the face of the earth. Even in the US they have to do that. So your own statement is basically destroying your point that Elon is pandering to China when he's just pandering to everyone. But here's the thing. In that statement he made, he said, he basically stated China is superior. So that would be pandering against the US. That's Bad for business in the US.
>Elon’s cars are not movies.
So? Both are business products sold for money. It's evidence of Chinas policy of only allowing products that don't criticize China. It's consistent and it's evidence. The statement I made was about products in general, not cars. So I can easily use movies to prove my point as movies are products. QED.
>For a counterexample, Tim Cook praises China, even as reports suggest that Apple and its shareholders are afraid of their dependence on China and are seeking to lessen it.
True but is Tim Cooks praise not real? I'd argue his praise is true AND he wants to lessen dependence on China. You shouldn't view China as a single negative entity. They are superior to the US in many ways both from a moral perspective and a technological perspective. From the otherside of the coin, the US is also superior to China in many ways both from a technological standpoint and moral standpoint.
The problem with bias is that you can't see this until someone brings it up. You used Tim Cook as an example but at the time of stating that example you couldn't even consider the possibility that Tim Cook could both praise China truthfully and want to sever their dependence on China. These two concepts are orthogonal. That is unless you're biased and can only view China as something that is either black or white.
>Elon has never behaved like Hollywood, and has a long history of saying whatever he thinks people want to hear. I see no reason to think that this is any different.
What he said in that link I posted is what Americans don't want to hear. What person in the US wants to hear "There are more smart, hardworking people in China then there are in the US." ? Nobody wants to hear that. He's speaking to an English audience and saying things people don't want to hear.
This is evidence for the fact that he's saying what he believes is true.
Summarize the findings here and cite the actual evidence if you can. Throwing a random book recommendation that I have to purchase to read is something that just doesn't move the conversational needle if you know what I mean.
I see nothing combative here, and nobody is forcing you to write replies you don’t want to. I disagree that simply making a naked claim is ‘reasoning’.
“The moon is made of cheese.” is a statement, but isn’t reasoning.
>I see nothing combative here, and nobody is forcing you to write replies you don’t want to. I disagree that simply making a naked claim is ‘reasoning’.
This is false. Read what you wrote:
>Actually you didn't provide any reasoning. You just made a statement without any supporting logic.
This is just rude. And you know it. You're just trolling now. I literally said not to post book links and you just did.
I'm ending this thread. I don't appreciate statements like this.
While its a great book, its really just a tour of the tactics used by Chinese manufacturers to gain the upper hand. It does not definitely prove that Chinese manufacturing capability is inferior, just that they have a mindset of squeezing every last drop of blood out of you and have many strategies to do so. And to be fair, Bernie was really squeezing what he wanted from his manufacturer. Overall the whole business relationship was miserable on both sides and probably shouldn't have happened but how else do you expect Chinese companies to get the business in the first place?
Its clearly backfiring these days since now some of the largest markets(US, & EU) are taking their ball and going home.
> they have a mindset of squeezing every last drop of blood out of you and have many strategies to do so
Yeah. Even leaving the untrustworthiness aside, among those strategies is quality manipulation. Steel, for example: first batches are good, then they'll gradually tamper with the chemistry without anyone noticing, pocket the money, pass the risk along to the westerners and nobody knows or cares until somebody dies because a scaffolding collapsed or something. There's a steel industry in my city, it doesn't do stuff like this and it can't compete with chinese steel even with import taxes.
I wonder if this occurs less often if you are providing a good deal to the Chinese side. Like I mentioned, the main character in the book: Bernie really seemed like he was squeezing his Chinese supplier hard. I gathered that they were making no margins on his deal but took his business so that they could get him into China and then make up the margin with these tricks. Would this have happened if he had just considered the other side's POV?
Hard squeezing is the only reason those chinese manufacturers got western business to begin with. The whole point of it was to replace expensive western operations with cheap chinese ones.
He talks at length about their "zero profit" strategy: they'd sell at negligible margins to westerners to get them to hand over their intellectual property on a silver platter. Then they'd make up for it in several ways such as by selling counterfeits in markets westerners couldn't care less about like most of Asia and South America. There's numerous "cheap chinese products" stores within 10 minutes of my home, I have no doubt they're the byproducts of that strategy.
He also talks about the general chinese culture. You get what you pay for, if you pay too little you'll get scrap. Happens even though the manufacturer technically agreed to your contract and specifications: instead of refusing the contract outright, they accept it and manipulate quality without telling the customer about it. They accepted being squeezed and then squeezed right back in ways their customers could not have imagined. The ruthlessness is actually pretty impressive.
Also geography makes the US different, and very successful.
China concentrated growth near the oceans because it's rivers were rather wild and dangerous. Also the farther you go west in China, the more rugged and desert like the country is.
Meanwhile the US has two different coasts. It also has a central portion with a river that is good for transport of goods. This as you say, decentralizes the country and massively lowers the risk of any one event knocking manufacturing out in the country.
They used to have plenty of chip plants in Silicon Valley. There's also tons of toxic waste to cleanup[1]. Maybe they should open these plants in the Mojave desert in places like Trona or near the Salton Sea that are already screwed environmentally. The problem is smart people who make a lot of money have to want to live nearby to physical stuff there.
Chinese don’t have labor laws. It makes it easy to suppress wages, curtail benefits and have extremely stressful conditions in the name of “nation building”.
All big cities in the US are heavily democratic and most have fairly solid Union representation. You could partner with unions and universities to achieve those goals. But most corporations and unions look at each other in adversarial terms not collaborative. So, until that mindset changes you have the flyover state job creation. Those are the only places where corporations can get the labor price points and control they desire.
Either way there is no way the west is going to be able to match Chinese prices with existing labor laws.
I’m not advocating against unions.
I’m saying the west needs to add tariffs on Chinese goods to account for disparity in labor laws and protect its workforce.
> A future American Shenzen should a stone throw away from Silicon Valley.
Lol, heck no. Silicon Valley isn't the center of the universe, and certainly not for manufacturing, even low end electronics. There are many good schools other than Stanford and Berkeley too, you know. Best part? There are good schools all across America.
China is already high tech. As best as I can tell this is turning that capacity to develop and produce high tech inward for the benefit of its own economy and independence.
I've heard the leadership in China love that story about China's bureaucracy ordering the burning of the boats of Zheng He[1].
"From 1405 to 1433, large fleets commanded by Admiral Zheng He – under the auspices of the Yongle Emperor of the Ming dynasty – traveled to the Indian Ocean seven times. This attempt did not lead China to global expansion, as the Confucian bureaucracy under the next emperor reversed the policy of open exploration and by 1500, it became a capital offence to build a seagoing junk with more than two masts.[18] "
No it is not, copycat culture will never amount to high tech. Only democracy allows freedom that is required to develop into high-tech economy. Chinese best bet is to compete with India producing plastic crap.
Everybody connects the dots differently. I personally would like to see TSMC (and ASML, and Intel) help China achieve this goal. It's not all black and white. They can help without giving away all their secrets.
Getting Taiwan to join unwillingly, aka conquest, would probably end up killing the engineers that make those devices and destroying the factories. This is one of the advantages of a high-skill economy, the value is in the people, not the natural resources.
So, they’ll have to convince Taiwan to join willingly. Which basically seems like fair game, I mean countries should be allowed to form unions and join together if they want. It also seems extremely unlikely to happen given their history.
I’m under the impression that the main threat to Taiwan from China is more that China might do something basically irrational; the existence of Taiwan is sort of unfinished business from their point of view, and stoking the flames there is an easy way for politicians in China to appeal to nationalism.
Anyway, as wildly dangerous as it all seems, everybody thankfully seems quietly devoted to not actually escalating it too far, thankfully.
Taiwan doesn't own any IP behind the semiconductor manufacturing pipeline. China was going down the same path until it was interrupted by US's chip war. Now it's forced to develop its own lithography machines and software. It's a massive own goal by US politicians.
That doesn't really contradict the point. Taiwan's plan was to become the semiconductor manufacturer for the world (possibly to make it indispensable enough to discourage mainland aggression), and they did it. Focus is on the need for long-term plans for stuff like this, not the minutia of who owns what. China appears to intend to improve on that plan with an eye toward ownership of the entire pipeline.
I recently read Invisible China by Scott Rozelle which raises concerns that impact this strategy.
TL;DR: Most of Chinese population lives in rural China. Birth rates in rural China are also much higher than in cities. Education and childhood development in rural China have severe issues. Quality of education, but also access to equivalents of highschool. Simple health care issues like worms, iron deficiency and lack of correction of simple sight issues that could be addressed with glasses. There is cultural pushback against remediations due to believes that glasses will ruin children's sight in the long run and work deworming will make young girls infertile and that you need some worms. Due to the hokou system rural children cannot attend school in the city in the many cases that parents from rural areas work in the city. Children get raised by grandparents who, as the book put it, know how to raise subsistence farmers. All these issues matter because to not fall into the middle income trap you need educated workers who can work in hightech manufacturing. China is becoming too expensive for cheap manufacturing, but struggles with a educated workforce for high-end work in much of the country. A concern with this is that this will create structural unemployment for badly educated workers who will make money in the informal sector (black market, but also crime) which drags everyone else down. Examples of this would be Brazil and Mexico. Countries like SK, Japan and Taiwan avoided this trap by creating a highly educated workforce before they need it.
One of the most surprising things in the book to me was that school, even before college, requires tuition and many poor families couldn't afford it. Quite the communism...
Edit: Given the massive urban/rural split in education the book describes, I could see limited success of the 2025 initiative in urban areas, but a total falling behind of rural areas with migrant workers as we've been seeing for the last 20-30 years not migrating any longer and no longer bringing money back home. This feels like a recipe for some form of upheaval. That combined with the cursed demographics, we have some interesting times ahead.
> There were 901.99 million persons living in urban areas, accounting for 63.89 percent; 509.79 million persons living in rural areas, accounting for 36.11 percent.
Interesting that the percentages for urban and rural sum exactly to 100%. Is there no concept of "suburban" in China? No in-between city and countryside? Honest question from someone who has never been to China.
"In particular, according to hukou status, only about 36 percent of China’s overall population is urban and fully 64 percent is rural (some 800 to 900 million people). Owing to uneven birthrates between the cities and the countryside (until recently urban families could have only one child, while rural families often had two or three), China’s children are even more concentrated in rural areas. More than 70 percent of China’s children have rural hukou status today. This means that China’s future workforce is predominantly growing up in rural villages, where educational outcomes are still lagging far behind."
Rozelle, Scott; Hell, Natalie. Invisible China: How the Urban-Rural Divide Threatens China’s Rise (pp. 8-9).
So the difference here might come from where the population lives vs. their houku status. As I understand it from the book, the houku status dictates where your child is allowed to go to school. So while 36.11% might now "live" in a urban area, many of the children of those urban residents likely will have to live with grandparents in the rural hometown. Unfortunately, this is one of the sections where I cannot quickly find a reference to the source in the book. Maybe if I read the whole chapter again, but I cannot do that right nwo.
Interesting. I was reading that China actually has too many college grads and now has a huge issue with educated youth unemployment because they’re all refusing to do non white collar work. Maybe they need more high schools and less univserities?
> Since 2018, following a backlash from the U.S., Europe, and elsewhere, the phrase "MIC 2025" has been de-emphasized in government and other official communications.
You cannot make this up. The West digging their own graves and protesting when their adversary isolates itself.
China, through MIC 2025, is clearly looking for an inwards economy centered around its large population, as opposed to an export oriented "factory of the world" economy (perhaps anticipating isolation in the event of invading Taiwan). The West didn't want that happening, hence they protested bringing those jobs back to their shores.
> To help achieve independence from foreign suppliers, the initiative encourages increased production in high-tech products and services, with its semiconductor industry central to the industrial plan
Based on where SMIC is at right now, they’re not doing too great on this goal.
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[ 4.9 ms ] story [ 196 ms ] threadhttps://obamawhitehouse.archives.gov/blog/2012/01/11/everyth...
I'm in the area with the very Caterpillar plant mentioned there.
The tiny amount of manufacturing they have tried (and mostly failed) to bring back pales in comparison to what the US used to produce.
https://fred.stlouisfed.org/tags/series?t=manufacturing%3Bqu...
It takes up less of the economy of maybe, and we might focus on upscale things that have less consumer visibility like industrial stuff, but manufacturing in the US seems to be in an OK spot.
Also the rest of the world’s pie grew, which is also fine.
The US made everything… for a while, after the rest of the world had blown up all of each other’s factories. Nobody is hoping for a repeat of that whole mess!
https://news.ycombinator.com/newsguidelines.html
Setting China as an outlier that does reshoring/industrial planning at the expense of the [American] worker is a politic fantasy. It forgets that reshoring is a global phenomenon also found in democracies [1] that is rather the result of a more uncertain world where logistics change with the success and wanning of political favors and alliances.
[1] https://www.diplomatie.gouv.fr/en/french-foreign-policy/econ...
Further, from a purely economic sense, outsourcing makes the most sense. Most people will be able to by everything for much cheaper which more than compensates for the lost jobs in one area. We also have record high employment. So from a purely economic perspective, we are doing great!
To me the real issue is the strategic importance of certain manufacturing areas. China can build 200 military ships in the time we build one. 20 subs in the time we build slightly more than one. We need to get our military supply chain back in shape if we want to remain globally dominant and keep us and our partners safe!
The US economy is the world leader and continues to pull ahead of everyone else.
https://www.economist.com/leaders/2023/04/13/the-lessons-fro...
That’s what this “made in China” initiative is tracking - moving up the value chain in China.
Look at Germany as an example, they do a lot of manufacturing and they have an excellent quality of life. They also make things that are objectively much higher quality than what comes out of Asia.
We can have both, an educated knowledge worker base and a manufacturing workforce, they are not mutually exclusive.
For example google extracts value from sellers. If those sellers themselves sell product made and developed in china. Then soon enough the Chinese system will move up the chain by use of competitive regulatory, skill, and supply chain advantages
Most screws these days are not screwed on by "bodies." They are screwed on by machine. Much of employment in manufacturing these days is in higher value work: operating CNC machines, maintaining robots and other machinery, engineering, and so on.
If manufacturing work is so low value and commodity, why do manufacturing jobs pay $20k more per person, on average, than service work?
Why does the manufacturing sector have annual average compensation of $70k, despite taking place in generally LCOL areas?
Do you look at a modern car and say: wow, what a low-value commodity good?
The Economist article you cite says nothing about manufacturing and does not support your point. In fact, when you look at the total output of manufacturing today versus 1947, it is about the same percentage of our GDP: even though manufacturing employment has dropped from 35% of Americans to less than 9% because of efficiency gains. The idea that manufacturing has disappeared from America is false and a myth.
I invite you to actually go tour a modern manufacturing facility with high speed robotic computer-controlled production lines. It may make you think differently about the physical comforts you depend on in your life.
Some manufacturing, yes. But most manufacturing is highly complex, starting with t he suppliers, supply lines, workers etc. And manufacturing often brings in itself innovation.
"of low value commodity bodies to screw things on"
Most manufacturing is not so easy. Stitch some shoes in Africa? Maybe but even this is hard to scale in this environment. Try to assemble a complex product there. Hell, you might not even have reliable power and have to start building your own power backups there.
Not talking about military dependencies. What if Taiwan returns to China and does not deliver Chips anymore? How much of the world market do they supply? 70%
So their money certainly said it.
No worker ever supported this, it was the intellectual and moneyed class that pushed for this and sold it as some obviously great thing that definitely wasn’t too good to be true.
The poor and lower class alone didn't make Walmart a retail titan.
It was the middle class who launched walmart into the top spot and fortunately for them, compared to their lower income peers, they did not have to make those life or death cost saving decisions but chose to like when they wanted a new flat screen TV or niche kitchen appliance
These purchases werent truly necessary and id even argue whatever perihperal like a tv and kitchen aplliance they had owned was in working condition, maybe not the top of the line cutting edge device. So this wasn't truly a needed product except for upgrading for the sake of upgrading that the middle class started splurging on the idea of a discount being presented.
During that time, as TVs improved year over year I knew several families who would trade theirs in for the yearly imorovement almost like an iPhone upgrade.
I don't think someone has to necessarily be wage earning to be considered middle class.
Middle Class is a fairly broad and ubiquitous term used in the USA to refer to a group of the population who doesn't necesarily live paycheck to paycheck or is on government assistance and whose definition probably varies person to person.
For such plans to succeed it is important to not mix them up with rural/flyover state job creation programs. One reason Chinese manufacturing has been a runaway succes is because how close their factories are to big cities and technical universities.
A future German Shenzen should be close to a big city with many technical universities nearby. A future American Shenzen should a stone throw away from Silicon Valley.
The most likely scenario is that companies are trying to find some other country to exploit.
Quality: The west has the better part of a century's worth of catching up to do in know-how.
Speed: See above. Also tighter government regulations, for better or worse.
Versatility: See above.
As it turns out, dumping domestic manufacturing capability didn't come without significant costs.
Obviously if we make everything expensive and take 3x longer we can do better in the quality category. But attempting to move at the same speed will make us do things at a lower quality and/or higher price.
Also we likely don't even have the ability to move as fast as china.
Look up what Elon musk has to say about China. He gets it because he's seen it.
There's no incentive to make him say it.
Can he? Are you an expert on what it takes to gain the Chinese government's approval, or the continuing goodwill needed for massive capital projects?
Here take a look at the clip. We all have the ability to judge tonality and the detail Elon puts into that statement to make the qualitative judgement call whether he's pandering or he believes in what he says:
https://youtu.be/JN3KPFbWCy8?t=1308
Also one day I recommend you go to China and see what's going on there with your own eyes. It's like going to Yosemite half dome vs. looking at pictures of it. The difference between the US and China will floor you.
I see no evidence that you have the expertise to make this claim. It’s just an opinion you are stating as fact.
> We all have the ability to judge tonality and the detail Elon puts into that statement to make the qualitative judgement call whether he's pandering or he believes in what he says…
Actually this is just wrong.
https://pubmed.ncbi.nlm.nih.gov/18605814/
“In accuracy, judges range no more widely than would be expected by chance, and the best judges are no more accurate than a stochastic mechanism would produce. When judging deception, people differ less in ability than in the inclination to regard others' statements as truthful.”
So all this tells us is that you are someone who personally finds Elon credible. Given your own stated views of China, this seems like just confirmation bias.
Could be. I'm asking you to watch that statement and judge for yourself. I don't believe or trust Elon utterly and completely. I'm not even close to being a huge fan. But from watching that statement I do both agree with him and believe he is being honest in that specific case.
>I see no evidence that you have the expertise to make this claim. It’s just an opinion you are stating as fact.
I'm Chinese by race. I'm born in the US, grew up in the US, lived in China for years.
But what I'm saying here is more common sense. Look at hollywood. There's a huge market in China for hollywood movies. So hollywood does pander to Chinas business requirements. What do you see in Hollywood movies? Do you see people fawning over the greatness of China? No. In hollywood you just see movies with complete absence of criticism against China. This is in stark contrast to the American media and cultural landscape which hollywood usually reflects accurately.
https://www.theatlantic.com/culture/archive/2021/09/how-holl...
So just use your own eyes in all the movies you watch. Hollwood panders to China by not criticising china. They don't pander to China by praising China.
That is physical evidence.
Yes, and the linked paper shows that this is a reflection of your existing bias about him, and not whether he is being truthful. It means that the clip of Elon tells us nothing at all about why he’s making the statement, even if judged by experts.
I don’t see how Hollywood is evidence of anything. They want their movies to have the widest audience possible, so their movie content is made as inoffensive as possible.
Elon’s cars are not movies.
For a counterexample, Tim Cook praises China, even as reports suggest that Apple and its shareholders are afraid of their dependence on China and are seeking to lessen it.
Elon has never behaved like Hollywood, and has a long history of saying whatever he thinks people want to hear. I see no reason to think that this is any different.
Except I told you I'm not a fan of elon. I cited him because he's both vocal about his opinion in China. And unlike you both Elon and I have experience with China. You likely don't and have never even set foot in China.
>I don’t see how Hollywood is evidence of anything. They want their movies to have the widest audience possible, so their movie content is made as inoffensive as possible.
That's every business on the face of the earth. Even in the US they have to do that. So your own statement is basically destroying your point that Elon is pandering to China when he's just pandering to everyone. But here's the thing. In that statement he made, he said, he basically stated China is superior. So that would be pandering against the US. That's Bad for business in the US.
>Elon’s cars are not movies.
So? Both are business products sold for money. It's evidence of Chinas policy of only allowing products that don't criticize China. It's consistent and it's evidence. The statement I made was about products in general, not cars. So I can easily use movies to prove my point as movies are products. QED.
>For a counterexample, Tim Cook praises China, even as reports suggest that Apple and its shareholders are afraid of their dependence on China and are seeking to lessen it.
True but is Tim Cooks praise not real? I'd argue his praise is true AND he wants to lessen dependence on China. You shouldn't view China as a single negative entity. They are superior to the US in many ways both from a moral perspective and a technological perspective. From the otherside of the coin, the US is also superior to China in many ways both from a technological standpoint and moral standpoint.
The problem with bias is that you can't see this until someone brings it up. You used Tim Cook as an example but at the time of stating that example you couldn't even consider the possibility that Tim Cook could both praise China truthfully and want to sever their dependence on China. These two concepts are orthogonal. That is unless you're biased and can only view China as something that is either black or white.
>Elon has never behaved like Hollywood, and has a long history of saying whatever he thinks people want to hear. I see no reason to think that this is any different.
What he said in that link I posted is what Americans don't want to hear. What person in the US wants to hear "There are more smart, hardworking people in China then there are in the US." ? Nobody wants to hear that. He's speaking to an English audience and saying things people don't want to hear.
This is evidence for the fact that he's saying what he believes is true.
There's a very entertaining book called "Poorly Made in China" that will quickly disabuse you of such notions.
Anything is better then a link that can't be read. That offers nothing it's even lower then just a "statement"
This is getting into combative territory here. We both need to end it.
“The moon is made of cheese.” is a statement, but isn’t reasoning.
Here’s a link to a book you can’t read: https://www.amazon.com/Views-Moon-Reviews-Mineralogy-Geochem...
I think it’s fairly clear which is more valuable if you want to know about the composition of the moon.
Similarly, the linked book is clearly more valuable than your unsubstantiated statement about US manufacturing.
This is false. Read what you wrote:
>Actually you didn't provide any reasoning. You just made a statement without any supporting logic.
This is just rude. And you know it. You're just trolling now. I literally said not to post book links and you just did.
I'm ending this thread. I don't appreciate statements like this.
Its clearly backfiring these days since now some of the largest markets(US, & EU) are taking their ball and going home.
Yeah. Even leaving the untrustworthiness aside, among those strategies is quality manipulation. Steel, for example: first batches are good, then they'll gradually tamper with the chemistry without anyone noticing, pocket the money, pass the risk along to the westerners and nobody knows or cares until somebody dies because a scaffolding collapsed or something. There's a steel industry in my city, it doesn't do stuff like this and it can't compete with chinese steel even with import taxes.
He talks at length about their "zero profit" strategy: they'd sell at negligible margins to westerners to get them to hand over their intellectual property on a silver platter. Then they'd make up for it in several ways such as by selling counterfeits in markets westerners couldn't care less about like most of Asia and South America. There's numerous "cheap chinese products" stores within 10 minutes of my home, I have no doubt they're the byproducts of that strategy.
He also talks about the general chinese culture. You get what you pay for, if you pay too little you'll get scrap. Happens even though the manufacturer technically agreed to your contract and specifications: instead of refusing the contract outright, they accept it and manipulate quality without telling the customer about it. They accepted being squeezed and then squeezed right back in ways their customers could not have imagined. The ruthlessness is actually pretty impressive.
Throughout the Midwest, there are excellent research universities, large industrial manufacturers, and smart hardworking people.
It would be folly to try and relocate existing expertise into a concentrated area already struggling with crowding.
China concentrated growth near the oceans because it's rivers were rather wild and dangerous. Also the farther you go west in China, the more rugged and desert like the country is.
Meanwhile the US has two different coasts. It also has a central portion with a river that is good for transport of goods. This as you say, decentralizes the country and massively lowers the risk of any one event knocking manufacturing out in the country.
[1] https://qz.com/1017181/silicon-valley-pollution-there-are-mo...
All big cities in the US are heavily democratic and most have fairly solid Union representation. You could partner with unions and universities to achieve those goals. But most corporations and unions look at each other in adversarial terms not collaborative. So, until that mindset changes you have the flyover state job creation. Those are the only places where corporations can get the labor price points and control they desire.
Either way there is no way the west is going to be able to match Chinese prices with existing labor laws.
I’m not advocating against unions. I’m saying the west needs to add tariffs on Chinese goods to account for disparity in labor laws and protect its workforce.
Guangzhou is the manufacture powerhouse of china. Which is, a stone throw from its silicon Valley, shenzhen.
But I believe shenzhen as a tech hub was selected for proximity to Hong Kong not because of Guangzhou.
Source: lived in China
Tencent and DJI is headquartered there for instance.
Lol, heck no. Silicon Valley isn't the center of the universe, and certainly not for manufacturing, even low end electronics. There are many good schools other than Stanford and Berkeley too, you know. Best part? There are good schools all across America.
"From 1405 to 1433, large fleets commanded by Admiral Zheng He – under the auspices of the Yongle Emperor of the Ming dynasty – traveled to the Indian Ocean seven times. This attempt did not lead China to global expansion, as the Confucian bureaucracy under the next emperor reversed the policy of open exploration and by 1500, it became a capital offence to build a seagoing junk with more than two masts.[18] "
https://en.wikipedia.org/wiki/Chinese_exploration
So, they’ll have to convince Taiwan to join willingly. Which basically seems like fair game, I mean countries should be allowed to form unions and join together if they want. It also seems extremely unlikely to happen given their history.
I’m under the impression that the main threat to Taiwan from China is more that China might do something basically irrational; the existence of Taiwan is sort of unfinished business from their point of view, and stoking the flames there is an easy way for politicians in China to appeal to nationalism.
Anyway, as wildly dangerous as it all seems, everybody thankfully seems quietly devoted to not actually escalating it too far, thankfully.
Erh, "forced" yes, but "develop its own" is not. Except you call stealing IP is "develop" too, e.g.:
https://www.bnnbloomberg.ca/engineer-who-fled-charges-of-ste... https://www.aljazeera.com/economy/2022/5/4/taiwan-is-trying-...
TL;DR: Most of Chinese population lives in rural China. Birth rates in rural China are also much higher than in cities. Education and childhood development in rural China have severe issues. Quality of education, but also access to equivalents of highschool. Simple health care issues like worms, iron deficiency and lack of correction of simple sight issues that could be addressed with glasses. There is cultural pushback against remediations due to believes that glasses will ruin children's sight in the long run and work deworming will make young girls infertile and that you need some worms. Due to the hokou system rural children cannot attend school in the city in the many cases that parents from rural areas work in the city. Children get raised by grandparents who, as the book put it, know how to raise subsistence farmers. All these issues matter because to not fall into the middle income trap you need educated workers who can work in hightech manufacturing. China is becoming too expensive for cheap manufacturing, but struggles with a educated workforce for high-end work in much of the country. A concern with this is that this will create structural unemployment for badly educated workers who will make money in the informal sector (black market, but also crime) which drags everyone else down. Examples of this would be Brazil and Mexico. Countries like SK, Japan and Taiwan avoided this trap by creating a highly educated workforce before they need it.
One of the most surprising things in the book to me was that school, even before college, requires tuition and many poor families couldn't afford it. Quite the communism...
Edit: Given the massive urban/rural split in education the book describes, I could see limited success of the 2025 initiative in urban areas, but a total falling behind of rural areas with migrant workers as we've been seeing for the last 20-30 years not migrating any longer and no longer bringing money back home. This feels like a recipe for some form of upheaval. That combined with the cursed demographics, we have some interesting times ahead.
Not any more for at least a few decades.
In 2021 Census there were only 36.11% population living in rural China.
Edit: 2021, not 2011.
> There were 901.99 million persons living in urban areas, accounting for 63.89 percent; 509.79 million persons living in rural areas, accounting for 36.11 percent.
Interesting that the percentages for urban and rural sum exactly to 100%. Is there no concept of "suburban" in China? No in-between city and countryside? Honest question from someone who has never been to China.
"In particular, according to hukou status, only about 36 percent of China’s overall population is urban and fully 64 percent is rural (some 800 to 900 million people). Owing to uneven birthrates between the cities and the countryside (until recently urban families could have only one child, while rural families often had two or three), China’s children are even more concentrated in rural areas. More than 70 percent of China’s children have rural hukou status today. This means that China’s future workforce is predominantly growing up in rural villages, where educational outcomes are still lagging far behind."
Rozelle, Scott; Hell, Natalie. Invisible China: How the Urban-Rural Divide Threatens China’s Rise (pp. 8-9).
So the difference here might come from where the population lives vs. their houku status. As I understand it from the book, the houku status dictates where your child is allowed to go to school. So while 36.11% might now "live" in a urban area, many of the children of those urban residents likely will have to live with grandparents in the rural hometown. Unfortunately, this is one of the sections where I cannot quickly find a reference to the source in the book. Maybe if I read the whole chapter again, but I cannot do that right nwo.
You cannot make this up. The West digging their own graves and protesting when their adversary isolates itself.
Based on where SMIC is at right now, they’re not doing too great on this goal.