China's growing economy

[bigfatjerk]

http://www.sbs.com.au/dateline/story...s-Ghost-Cities

Surprise, it's a bit of a crock.

[BOOMERBRADLEY]

I could be wrong but China's economy is about the same as California. I'm not sure if it still is, but it was a couple of years ago

[NormanPride]

So what happens to the global economy when they blow up?

[soonerinkaty]

So what happens to the global economy when they blow up?

Ours grows? I really have no explanation, just a thought.

[Tulsa_Fireman]

Then blow it up.

Oh wait, we can't. We can't compete with asian labor. Period.

[KantoSooner]

Depends on what you're making. If you want to work in a flip-flop sandal factory and afford a cabin in the mountains as was apparently possible in the 1950's after the rest of the world committed economic suicide, well, you're out of luck. (and don't get me started on terry cloth weaving machine operators).
If, on the other hand, you can remain sober five days a week, spend some time learning skills that can not be mastered by the average Irish Setter in fifteen minutes and are willing to work, American workers compete quite nicely.

[Mongo]

I can rub my *** on the carpet like an Irish Setter, and I went to college.

TAKE THAT DOG!!!

[badger]

The BBC had a text version of that article since I don't feel like watching the video version at your link

What these Chinese counties are doing sounds similar to what some state governments were trying to do for years --- spend more than they take in till their credit rating is failing, with little oversight from the federal government. The end result of Illinois busing seniors to Canada for cheaper meds and California stationing lifeguards at each skate park and New Jersey underfunding pensions while keeping benefits sky high is NP and I seeing the British pound and Euro worth more than the American dollar

but not for long. All of Europe is probably gonna be in worse shape than the U.S. with their spend-happy ways

[NormanPride]

Psh. Euros.

[homerSimpsonsBrain]

Depends on what you're making. If you want to work in a flip-flop sandal factory and afford a cabin in the mountains as was apparently possible in the 1950's after the rest of the world committed economic suicide, well, you're out of luck. (and don't get me started on terry cloth weaving machine operators).
If, on the other hand, you can remain sober five days a week, spend some time learning skills that can not be mastered by the average Irish Setter in fifteen minutes and are willing to work, American workers compete quite nicely.

Dont kid yourself. Large corporations are outsourcing high skill jobs like network engineering and software development all the time. The fact that the folks they outsource the work to might not be very good at their jobs doesnt seem to matter. That the sr. execs can show big short term savings and get big bonuses and a spike in the stock price does seem to matter.

[SanJoaquinSooner]

I highly recommend watching Last Train Home on Netflix streaming.

Quite a constrast to ghost cities....

[soonercruiser]

Thanks for posting the video bfj!

China has many bubbles that are going to burst in the future.
A lot of this is made worst with forced abortions, sterilization, and the one child policy.

[KantoSooner]

Dont kid yourself. Large corporations are outsourcing high skill jobs like network engineering and software development all the time. The fact that the folks they outsource the work to might not be very good at their jobs doesnt seem to matter. That the sr. execs can show big short term savings and get big bonuses and a spike in the stock price does seem to matter.

This outsourcing is due to two reasons:

First, there are lots of engineers who really can do the work. Just as well as an American.

Second, in the event that you're talking about a US overseas operation, our BS taxation laws mean that an American is 3X the cost of, for instance, an Aussie or a Kiwi or a Canadian, Brit, etc. Not to mention an Indian, Malaysian, Singaporean, Brazilian, et al.

I ran Asian Ops for a semiconductor oriented injection molding company for 15 years. You get equal quality work for a lot less. You can go for it and survive or be mindlessly 'patriotic' and watch your company collapse. No brainer.

[texaspokieokie]

http://www.sbs.com.au/dateline/story...s-Ghost-Cities

Surprise, it's a bit of a crock.

What is "a bit of a crock" ???

[homerSimpsonsBrain]

This outsourcing is due to two reasons:

First, there are lots of engineers who really can do the work. Just as well as an American.

Absolutely true but based on my experience, US companies dont care about the quality, they care about the short term cost savings that provide a quick burst to the stock price. The folks we've hired are marginally competent at best but they are much cheaper.

I ran Asian Ops for a semiconductor oriented injection molding company for 15 years. You get equal quality work for a lot less. You can go for it and survive or be mindlessly 'patriotic' and watch your company collapse. No brainer.

At some point something has to give. If we outsource enough jobs, nobody in the US can afford to buy your products.

I'm waiting to see some CEOs outsourced. That might provide the biggest bang for the buck.

[OklahomaTuba]

A lot of high tech company's aren't too keen on China because of the IP issues. You send your drawings to Wang in Shenzen, and chances are good you're not the only one making that product anymore.

[KantoSooner]

To reply on the CEO issue. YES! The company I worked for was owned by an alcoholic, alpha male entrepreneur genius. When he set up his 'international' department, it consisted of 3 guys under 30. We ran a compound annual growth rate of 50%, had the business to $150 million in three years and never exceeded a 0.75% cost of sales.
Age and high salary expectations are a crock.

On the quality issue, I can't speak to your experience. Mine is that Intel, Toshiba, TSMC and Texas Instruments, for example, pretty much expect excellent quality no matter who you are and where you operate.

Sorry to be so positive, but I don't see a great deal to be gained in continuing to sing from the 'they stole our technology and now beat us to death with slave labor and crap quality' song book. maybe so, once, long ago. For the last 25 years or so, we've been beating ourselves to death and the rest of the world has simply shrugged and taken what we've given up.

[homerSimpsonsBrain]

...I don't see a great deal to be gained in continuing to sing from the 'they stole our technology and now beat us to death with slave labor and crap quality' song book. maybe so, once, long ago. For the last 25 years or so, we've been beating ourselves to death and the rest of the world has simply shrugged and taken what we've given up.

Generally, I'd agree. No point in complaining about it. But your original statement was about workers with "no skills" losing out. I dont think its limited to low end, poorly educated "wrench turners". At this point its pretty much any job that can take advantage of the big pipes going into just about any third world country. Even radiologist are being outsourced to India.

[GKeeper316]

To reply on the CEO issue. YES! The company I worked for was owned by an alcoholic, alpha male entrepreneur genius. When he set up his 'international' department, it consisted of 3 guys under 30. We ran a compound annual growth rate of 50%, had the business to $150 million in three years and never exceeded a 0.75% cost of sales.
Age and high salary expectations are a crock.

On the quality issue, I can't speak to your experience. Mine is that Intel, Toshiba, TSMC and Texas Instruments, for example, pretty much expect excellent quality no matter who you are and where you operate.

Sorry to be so positive, but I don't see a great deal to be gained in continuing to sing from the 'they stole our technology and now beat us to death with slave labor and crap quality' song book. maybe so, once, long ago. For the last 25 years or so, we've been beating ourselves to death and the rest of the world has simply shrugged and taken what we've given up.

and to hell with the chinese workers in those electronics factories that are now dying from all the illegal chemicals used in their manufacturing processes.

its cheaper in china because they cut corners that we dont.

what im most pissed about at the moment is the fact that american companies like google are setting up their corporate headquarters in places like ireland, where they get taxed half what they would in the us, while keeping all their operations here and demanding the same protection from law enforcement, emergency services, and using roads they dont help pay for to move their products around.

[King Barry's Back]

The BBC had a text version of that article since I don't feel like watching the video version at your link

What these Chinese counties are doing sounds similar to what some state governments were trying to do for years --- spend more than they take in till their credit rating is failing, with little oversight from the federal government.

No, what you saw in that report was far different from what you see in some Western situations.

First, I don't think China is suffering any problems with excessive debt. In fact, they seem to be obsessive savers. See, for example, their eager buying of US bonds, and also see in the report terms for a $300,000 condo-50% down payment, with the balance in three years.

What you saw in that report was the result of a Soviet-style command economy. The Soviets over-built vastly huge industrial projects, that were good at only one thing - producing what we called "weath-destroying products."

In other words, Soviet industries were consuming valuable resources- electricity, petroleum, steel, cement, etc - and were producing products that were less valuable (often much less valuable) than the resources that were used up.

In China, it appears that the wealth destroying activity that their bureaucrats are favoring is real-estate. I think that the analyst in the report is wrong. He was saying that China had a real estate bubble.

They don't. They have something like 700 million people living in medieval-like conditions. They badly need modern housing.

And those developers know that those apartments are never going to be sold at the asking prices. Those are fake prices. They get the funding to build from the government, they take a slice for themselves, put up the building so people get work, then they move on and begin again.

The first thing they need to do is get the asking prices down to a level where it meets demand. That would at least get real human beings into China's otherwise unused stock of modern housing.

It's not going to be prestigious, however, to sell $300,000 condos for $4000, but that may well be what needs to happen.

And then they need to stop ordering the building/manufacture of stuff people don't want.

China is facing some serious social problems, and with their huge population, all these social problems are going to be on a scale that the world has never seen. That's why the government is so obsessed with GDP growth.

Well, it will be interesting to watch, if nothing else. Let's just make sure we watch from afar.