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Old 04-12-2012, 10:24 PM
395 posts, read 645,620 times
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You first need to understand the divide between the rich and the poor in China. The rich only constitutes a small percentage of the people...maybe like 8%, but that 8% in a country with a billion plus will equate to about 100 million people. To be considered rich i would say a chinese person would need to have atleast 2-3 million usd. Slightly upper middle class is typically consider to be 800k-1.4 million usd in net worth.

China will have a consumption market for imported goods, but many of the imported goods are taxed very heavily...thus favouring domestically made goods over the long run. China will consume imported goods, but at the end of the day the majority of the consumer staples and average ce goods will be domestic in nature. In addition, china will develop their own brands with time...maybe in about 12-15 years which will rival the quality of anything made outside of china and the price to value/utility ratio will be better than anything the developed countries can produce (could still be undercut if outsourced to other se-asian countries but i would guesstimate that it would be too small to be of any significance.)

Out sourcing and technology transfer over the years will allowing US companies to cut cost, but at the end of the day the benefits of outsourcing will erode as north america becomes less and less important as a consumer market in the decades to come...at which point many of the producing countries have already learned and maybe even improved upon the manufacturing techniques. What people need to understand is that producing most ce product or consumer staples is not rocket science. It's all pretty basic engineering for 75% of the items households use, the other 25% may be more complex of a puzzle to burst.

e.g., china doesn't want to play the bluray / hd-dvd game due to licensing games/rules. they just develop their own format to circumvent the games of the big boys. if they have a market large enough media companies will adopt that format for their country. China Blue High-definition Disc - Wikipedia, the free encyclopedia
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