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Old 05-30-2019, 07:33 AM
 
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In lieu of the recent trade war, why do we have such a heavy dependence on just one country? Why can't we consider India, Nigeria, Bangladesh or other developing countries for manufacturing? These are all highly populated with cheap labor and are mostly pretty stable.


Obviously, I know that many things are already made in Bangladesh and India; but it's not nearly as much as China.


Sorry if this has been asked already. I couldn't find much on this specific question here upon scanning the forum.
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Old 05-30-2019, 07:49 AM
 
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China is technologically advanced and capable of producing tech products. The other countries are coming along, but still need time to build up knowledge on robotics and manufacturing. Most of their production is manual labor.



Personally, I saw that China was having a problem keeping lower paid employees at jobs. Everyone goes home for Chinese New Year and a lot of the manual production businesses would lose a big chunk of staff after the holiday. Employees went to better paying jobs wherever available.



Bangladesh and India, as well as Vietnam and Malaysia, have enough people to do manual manufacturing. It's still cheap there because the work force isn't highly trained in technology yet and people are willing to work for lower wages. I believe we'll see basic production move all over the world as more countries seek to gain the financial wages for their country and can train enough people in basic production skills.
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Old 05-30-2019, 08:12 AM
 
Location: Kansas City, MISSOURI
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I suspect eventually India, Pakistan and Bangladesh (and, maybe even further out, some African countries like Nigeria) will take over much of the production that China is currently doing, but it will take time to establish all the infrastructure and supply chains in those countries first.
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Old 05-30-2019, 08:38 AM
Status: "On The Lookout" (set 22 days ago)
 
Location: The Triad (NC)
28,389 posts, read 61,750,545 times
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Quote:
Originally Posted by HomeHunt82 View Post
Why can't we consider India, Nigeria, Bangladesh or other developing countries for manufacturing?
These are all highly populated with cheap labor and are mostly pretty stable.
You're not wrong.

Do some more reading:
https://en.wikipedia.org/wiki/Trans-Pacific_Partnership

In the longer term... which do you think is more harmful to China?
a) establishing trade alliances with OTHER Asian countries which excludes them, or
b) adolescent gamesmanship about tariffs that get paid only by the US

In the shorter term... which do you suppose is a better use of national resources?
a) assisting developing nations with infrastructure development, or
b) starting decades long wars, running up TRILLIONS in debt and not even fixing our own infrastructure?

Last edited by MrRational; 05-30-2019 at 08:52 AM..
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Old 05-30-2019, 10:48 AM
 
3,673 posts, read 3,077,379 times
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This is a repost from the Investing forum:


A little perspective about moving manufacturing from China from Reddit user Xazier:

"I worked in China for 7 years in manufacturing so I'm going to chime in here as an "expert". What you mention above is... Somewhat true. There are countries that will take over some of the manufacturing and really its already happening. Textiles have moved to Vietnam and Indonesia, mass amounts of tooling shops have gone to Thailand and Philippines has picked up some of the metal work.

But this is the big issue. Supply chain. Screws, nuts, bolts, washers, wiring, motherboard components or just plain raw materials . You cant get all of those things in one place easily. Apple did a study 4 years ago to figure how long it would take to move the complete supply chain back to the US. The most conservative estimate was 12 years. And that has to be moved completely before production could start.
So you say China is just cheap labor, sure. But they also have the supply chain. All of it. If I want to make a watch I can find every component I need within 10miles in places like shenzhen, guangzhou, Shanghai, Xiamen, dongguan.

Philippines, Thailand, Indonesia, Vietnam hell even Europe and the US don't have it anymore. You still need raw material or components from China unless you want to buy from small manufacturing outfits in the states and guess what? They're ****ing expensive. So there goes your costing out the window.
So let's summarize, China has cheap labor but they also have all the supply chain needed to be successful and almost everyone else doesnt. So in short we still need China until all component and raw material supply chains can be moved out. Which would take decades. Also, one other note. They mine majority of the world's rare earth materials for electronic components. Which is also a bummer.

On a personal note, screw China they cheat like hell and copy everything. But they are damn good at it and they won't stop for Trump. They will just wait him out. If economy tanks they know he will get replaced. If China's economy tanks they have controls to keep in charge until they can turn it around."
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Old 05-30-2019, 12:37 PM
 
2,486 posts, read 1,407,292 times
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There are tons of reasons and it isn't labor cost driving jobs away. China has the resources and isn't afraid to use them to build themselves as the world's manufacturer. They can source what they need, build it and get rid of the waste products in ways you wouldn't want happening here in the United States. They lack safety requirements and have a view on human life that we had a few hundred years ago.

In addition, the world economy is transitioning from being demand based almost entirely on Europe and North America to Asia. Now that our economies have grown to saturation and are no longer growing, the focus has been on the next hot spot of economic activity which is Asia and its 4.5 billion or so people. The middle class there is growing as they leave their industrial revolution phase and middle class grows exponentially.

Asia will drive the economy of the future. Supply chains have been setup there, stuff is going to be made there and that is where much of it will be sold as more and more of their people rise from poverty and into the middle class.

People here don't understand the demographics involved over there. They also don't understand that we can't just setup all this infrastructure to make things that we have to import the parts for. The entire idea is outdated and we've never really had the technology to do these things, nor should we want to make cheap goods that we already sell for massive profits. The gain on investment is negative, the entire thought process is flawed.

We don't want to make the goods here. We can't make the goods here and any attempt to try and make them would have a major negative ROI.

I find it funny that people get so mad mover the trade deficit, which is little more than a mathematical curiosity, while ignoring a much more dangerous yearly budget deficit. You have a massive trade deficit with every store you shop at, this frees you to do other more productive things than growing and making your own crap. Well the same is true for China and the third world making our goods. No one here wants to work as much and for as little, much less the environmental ramifications, safety hazards and disposal of waste. Why the hell do you want to rape everything around you for cheap goods? Goods you already get some other sucker to make and abuse their resources while making most of the profit on anyway?

Its stupid. The entire premise for this trade war is retarded.

If you want to diminish China's role, just because you want to stick a finger up their brown hole, then you get back into TPP and prop up the areas around them to make them more competitive. This allows you to use back doors into china, much like they were doing to us via canada on steel for a long time. This allows you to build up other competitors and over the long haul keep China in check by ensuring you are constantly meddling right in their sphere of influence.

This whole screaming MAGA at everyone while threatening tariffs and threatening established decades of economic activity only limits our influence over the world and gets countries used to ignoring the United States. You already see long time partners like Europe bypassing our currency and corporations to do business with countries like Iran because of our temper tantrum over a deal we made and then pulled out of. We need to get used to the idea that the world, post nuclear, is a very different place. We can't constantly go Bi Polar and exit deals and then try to abuse our influence to force other countries to back out of the same deals. Yet cozy up to another dictator (NK) and nuclear power. This is toddler crap, it isn't how business or government works.

You don't want the world ignoring the dollar. That is our biggest lynch pin and key to our future success. Keeping the world hooked on dollars is paramount. If we lose reserve status and the world starts dumping dollars at the same time we are bursting with debt and deficit spending we will end up in some deep doo doo.

Last edited by aridon; 05-30-2019 at 12:45 PM..
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Old 05-30-2019, 03:01 PM
 
1,128 posts, read 1,046,843 times
Reputation: 1418
Quote:
Originally Posted by HomeHunt82 View Post
In lieu of the recent trade war, why do we have such a heavy dependence on just one country? Why can't we consider India, Nigeria, Bangladesh or other developing countries for manufacturing? These are all highly populated with cheap labor and are mostly pretty stable.


Obviously, I know that many things are already made in Bangladesh and India; but it's not nearly as much as China.


Sorry if this has been asked already. I couldn't find much on this specific question here upon scanning the forum.
I think you mean "in light of," in lieu of means instead of. But to address the spirit of your question, I think it's just a matter of history related to trade deals and diplomacy. Cheap labor can be had in many corners of the world, but generally a country wants to make alliances and deals with countries were there's a mutual benefit.

Many suppliers and manufacturers have already begun shifting away from China when the tariffs were announced (Williams Sonoma for one).
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Old 05-30-2019, 04:03 PM
 
2,669 posts, read 1,099,254 times
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It's actually somewhat untrue that China is so dominant in manufacturing. This is partially because the math behind trade calculations is actually flawed, oftentimes significantly so. What China is a good it is final assembly, which actually inflates the value of the goods that are "manufactured" in China.

For example, take an iPhone. Components come in from South Korea, Taiwan, Africa, all over the world. Oftentimes the thing China adds is labor, which then leads to the finished good. When that iPhone is shipped to the US, the entire value of the phone is counted as a surplus for China. In reality, China has added very little value, they are just the point of final assembly. If we switched to a "value added" system of calculating trade balances, it's estimated that our trade deficit with China would be 20% smaller.

My point is that China is the king of final assembly, Indonesia or India could potentially take that away if the US really pivots away from China. For now, China has excellent supply chains and infrastructure, making it attractive even with tariffs. The problem I see is not that our manufacturing is too heavily dependent on China, but that US firms will lose access to Chinese markets. China has the largest middle class on earth, it will be damaging to US industry if we are shut off from that market.
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Old 05-30-2019, 04:28 PM
 
3,114 posts, read 799,958 times
Reputation: 3635
Quote:
Originally Posted by 1insider View Post
This is a repost from the Investing forum:


A little perspective about moving manufacturing from China from Reddit user Xazier:

"I worked in China for 7 years in manufacturing so I'm going to chime in here as an "expert". What you mention above is... Somewhat true. There are countries that will take over some of the manufacturing and really its already happening. Textiles have moved to Vietnam and Indonesia, mass amounts of tooling shops have gone to Thailand and Philippines has picked up some of the metal work.

But this is the big issue. Supply chain. Screws, nuts, bolts, washers, wiring, motherboard components or just plain raw materials . You cant get all of those things in one place easily. Apple did a study 4 years ago to figure how long it would take to move the complete supply chain back to the US. The most conservative estimate was 12 years. And that has to be moved completely before production could start.
So you say China is just cheap labor, sure. But they also have the supply chain. All of it. If I want to make a watch I can find every component I need within 10miles in places like shenzhen, guangzhou, Shanghai, Xiamen, dongguan.

Philippines, Thailand, Indonesia, Vietnam hell even Europe and the US don't have it anymore. You still need raw material or components from China unless you want to buy from small manufacturing outfits in the states and guess what? They're ****ing expensive. So there goes your costing out the window.
So let's summarize, China has cheap labor but they also have all the supply chain needed to be successful and almost everyone else doesnt. So in short we still need China until all component and raw material supply chains can be moved out. Which would take decades. Also, one other note. They mine majority of the world's rare earth materials for electronic components. Which is also a bummer.

On a personal note, screw China they cheat like hell and copy everything. But they are damn good at it and they won't stop for Trump. They will just wait him out. If economy tanks they know he will get replaced. If China's economy tanks they have controls to keep in charge until they can turn it around."
The attempt that Apple made at moving production back to the US was a pitiful one. They aborted the entire operation because there wasn't enough of ONE TYPE OF PENTALOBE SCREW - CURRENTLY AVAILABLE in the US. So what? Have the darn parts shipped here and then resume production. I'm willing to speculate it was an intentional oversight to destine the project to fail, so they could return to enjoying their higher margins.

Countless electronics from the auto industry are made overseas, the press only really cares about final assembly. What gives?
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Old 05-30-2019, 05:15 PM
 
2,486 posts, read 1,407,292 times
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Quote:
Originally Posted by ddm2k View Post
The attempt that Apple made at moving production back to the US was a pitiful one. They aborted the entire operation because there wasn't enough of ONE TYPE OF PENTALOBE SCREW - CURRENTLY AVAILABLE in the US. So what? Have the darn parts shipped here and then resume production. I'm willing to speculate it was an intentional oversight to destine the project to fail, so they could return to enjoying their higher margins.

Countless electronics from the auto industry are made overseas, the press only really cares about final assembly. What gives?
Why do you pretend that was the only issue?
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