We are, and so are the Japanese. But for all the wrong reasons. Today's New York Times tells a story of how China's economy will soon overtake Japan's -- and by implication ours. It ends with a peal of doom: "China," says a Japanese think tanker, "is about to leave everyone behind in a big way."
Except it won't. Remember the exploding tires? The blood thinner that killed Americans as they lay in their hospital beds? The infant formula that sickened and killed thousands and thousands of Chinese infants? These are not exceptions to the rule. These are not a few bad apples. This is business as usual in China. It's risky to make things there. Risky and expensive.
You need to go to the factory floor to see why. By the time you get your raw materials, whether chemicals or plastics or milk solids or whatever, they've passed through several middlemen. You, in turn, must farm out some of your work to smaller firms to handle parts of the job that you can't. All the players in China's labyrinthine supply chain that touch the goods add risk. And cost.
Until now, the Chinese have been able to price their products so cheaply, in large part, because of currency controls and export rebates. So what has looked like a whopping competitive edge to us is actually a distortion in the market. Don't be fooled. If China struggles to make drugs, food, and engineered goods safely and reliably, not only is China not about to overtake us, but in biting off more than it can chew, China is rashly exposing its companies and the Made In China brand to a lot of risk.
Before it can become a true manufacturing juggernaut, and not just a giant assembler of imported components, China has lots of work to do. Work that I think will take generations. China must rationalize its sprawling supply chains, acculturate its workforce to quality, change the very way its corporations are governed and its laws enforced. This is not going to happen anytime soon.
Meanwhile, China needs modern goods and services to keep its economy -- and middle class -- growing. Modern hospitals and airports, infrastructure and power grids. The Chinese can fabricate a lot of this stuff -- that is, put together the parts. But in terms of making the stuff themselves, especially the goods that require a high degree of engineering and safety, China bucks up against the limits of its own capability and must import. From countries like America and Japan and Germany. That's why, despite our economic doldrums, our exports to China keep rising. China needs what we make.
We can take some heart that Japan's plan, according to the NYT, is to shy away from exports and focus on goosing internal consumption...from its aging, shrinking population. Good luck with that. Meanwhile, China's huge, modern, urban middle class will keep growing, and its imports of modern goods and services will, too. That's wonderful news in this recession. China's demand plays right into the sweet spot of our economy. We need to stop fearing the Big Bad China and start capitalizing on its growth. We'll create jobs here at home and help replenish our savings if we do.
Robert L. Borosage: Obama and China: Vandalism or Vision
Good. You're alone.
America continued to buy Chinese products after all of these incidents and Wal Mart sales did not suffer. The trend will continue. Chinese products may be considered junk but this junk is cheap enough that Americans will continue to buy it. This is especially true as the economy tanks and big box discount stores carry more and more Chinese goods.
Want quality and long lasting products. Buy Japanese, Korean and American. Want cheap clothing, bikes and tires. Buy Chinese because that's all that Wal Mart and Target stocks.
Things will have to get much worse before Americans dump Chinese products.
This is especially true as the current Administration makes it more costly for American businesses (higher taxes) to do business. As long as Obama continues to make American companies less conpetitive Chinese goods will look even better. Yes, we may pass by the Chinese made baby formula on our way to the Chinese made radios and batteries. That's about as far as it will go.
"Work " is not a concept considered valuable in the U.S. any more. Wall street often jumps UP when unemployment numbers come out! Why? The Mitt Romney's of the world, the international corporations, and the vulture capitalists that have taken over the United states government. They ( and by attrition the collective WE ) are getting their (our) A** handed to them (us) by the PEOPLES Republic of China. Leadership vs greed and sellouts.. We are no longer "We the people"...
The first postwar Japanese manufactured goods had quality problems, and they acquired a reputation for shoddiness. Well that's certainly changed!
Their banks loaned their companies money at a loss , their industries were a big plot by the Japanese government to topple America from its greatness.
Japanese tariffs kept put many American products and agricultural goods.
This is particularly amusing:
"By the time you get your raw materials, whether chemicals or plastics or milk solids or whatever, they've passed through several middlemen. You, in turn, must farm out some of your work to smaller firms to handle parts of the job that you can't. All the players in China's labyrinthine supply chain that touch the goods add risk. And cost."
We have similar "middlemen" here too, they're called suppliers."
That was the FDA Republican Policy since Regean !!!!
How many LIVERS DID Tylenol kill ? Because it was not studied and no one bothered to say HEY THE IS A REALLY STRONG DRUG AND IT DOES A LOT OF HARM CUT THE DOSAGE TO 1/4 FAST !!!!!
Hundreds of DEAD KIDS later when Democrates get control of the FDA changes come fast. That means Doctors knew the cause but were afraid of the DRUG COMPANY LAWYERS !!!!!!!!
Same for Korea. Korean cars imported to the U.S. should have all the same costs that foreign cars have in Korea. And this should last for about 20 years beyond real market opening on their part. "Real" means no more barriers, formal or informal, than there are here including distribution systems, advertising, etc.
Same for Japan. And by the way, the NYT has it wrong that Japan is focusing more on domestic demand. Pushing it to some extent, yes. But also subsidizing export industries. Watch what they do not what they say.
the chinese are going through the same stages. motorola and othe companies are outsourcing research and development to china(and india). china is already the largest manufacturer of high tech parts and equipment in the world. the usa still makes manufacturing equipment, machinery and leads in computer tech and systems but the edge is slipping because it makes sense to the manufacturer to make their own stuff.
so, yes, the usa should take advantage of what it can but the trend is not in its favor in the long run unless the demand for these products grows domestically.
But their problem is not so much in production, or science, or in money -- it is the problem of poisoning themselves and us.
The Chinese do not have the expertise and quality control to ensure that their end-products are not toxic. I believe that American entreprenures who specialize in American grown and manufactured products will be the next wave of successful businesses. People want organic food and clothing, they want their children's toys to be untainted. They want to buy products made in the USA and made through green processes.
I think many Americans already don't trust Chinese products.