Why did we outsource primarily to China instead of Mexico?

[KevK]

Originally Posted by NorthPoleMarathoner

I just read an article the other day. China is decreasing the size of their military. Though it is getting stronger. (weapons systems are getting better)

Companies are heading to China because everyday China is throwing out workplace laws. Salaries usually only account for 7-10 % of a companies budget. U.S. Governement regulation and taxation account for 50% on average.

In China companies have no EPA, Social Security, OSHA, Workers comp, EEO and all these unecessary burdens that cost them money to deal with. Unions are illegal. No wonder comapnies are leaving. No cap and trade either.

I bet they would come back if we eased up on some of the stupid crap we make companies deal with here.

Interesting enough if you look at history you will see that the smaller a government is the stronger the military is. The bigger and more powerful a govt is the weaker the military is.

Makes me wonder when every time I turn on the TV some politician is proposing some new workplace law to make everything "fair" what we are really doing to ourselves. Sending alll our jobs overseas and making our military weaker. Not a good idea.

I agree! Let's tunr this place into a craphole too so we can compete with the Chinese! By golly if they will work for 50 cents an hour, we will work for 30 cents an hour!

[drunk on kool aid]

Originally Posted by oberon_1

You make some excellent points. One day we may find ourselves sorry for putting all eggs in China's basket!
Here are some things that might answer your question:
1) The US doesn't have a clear policy to encourage outsourcing to China. It just happened because the private sector (as you can see in other instances) is like a flock of sheep. Once a few large trendsetters moved their manufacturing to China, the others just followed.
2) Being a communist country, China decided to make a coordinated effort to attract foreigners. Its easier when you are a dictatorship.
3) As part of their national effort, China offered the manufacturing infrastructure that Mexico didn't.
4) The Chinese traditional discipline which Mexicans lack.

Good points. I'd only argue with your 4th point. Mexicans are capable of very hard work. Many of the Chinese factory workers are very poor rural folk with little or no education for what they end up doing--it's just a matter of training.

Originally Posted by gardener34

Mexico labor rate is too expensive. Seriously on a global scheme this is true.

I've also heard this. I guess Mexico's proximity and potentially cheaper transportation isn't a large enough offset?

Originally Posted by Dopo

- Capitalism doesn't spread democracy (read the definition of democracy and capitalism)

Why China instead of Mexico?
(1) Biggest market in the World controlled by a communist government (1 person controls everything) proving that demand (1 billion people) is what drives a market and not supply.

I don't assume that capitalism spreads democracy—I may have overstated the correlation. I just wanted to offer that the capitalistic direction forced the Chinese government to relinquish some control and that newly wealthy business people tend to demand more freedoms, at least as far as running a business goes. The move toward capitalism has had plenty of very bad side-effects as well: wide income gap, disappearance of social safety net, pollution. In any case, modern China is a far cry from the days of people in Mao jackets and virtually no cars on the streets.

Originally Posted by Dopo

I forgot to mention another important factor:
Infrastructure:
You notice how important this is when you see a nice being built and a few months later businesses are jumping on it to have their business next to the nice street, road or highway.

Why is this important?
It explains why Africa is never an option and 3rd World countries with good infrastructure (government spending on infrastructure) attract businesses.

This is a good point that punkrocker27ka also mentioned.

Originally Posted by LauraC

Does it have anything to do with China holding most of our debt? (I'm asking, I don't know.)

They've got us on a leash now but I think this is a result of our outsourcing to them and not the cause.


I'm no advocate of the cold war but there seems to be plenty of people in government that are still fighting communism. Why didn't these people resist our outsourcing to China? We won't even sell cars to Cuba. I'm sure the Cubans would have been happy to work for cheap wages and Cuba isn't going to be a nuclear military threat to us. Or did the U.S. think that empowering the Chinese would be a counter to the Soviet Union? I guess I'm wondering if there were restrictions with doing business with communist regimes that was lifted for China?

In summary, it seems that U.S. businesses, in an attempt to save a little bit in labor, coupled with an accommodating Chinese government decided that it was worth the potential future problems vis-a-vis outsourcing to Mexico?

Am I the only one who thinks that outsourcing to Mexico instead of China, at a small sacrifice in cost savings, would have been way more beneficial to us in the long run?

[texdav]

It is one fo the emerging markets as is india. We only investeed once the chinese had done much of it theirselfs by going to capitalist methods of business. notive that chna in thier stimulus is not bailing out any companies. Its all infrastructure they need built for trhe future.We do have investments in mexico but tehy are not a emerging market and actually thier largest export is people that send back money back home.

[ergohead]

China loaned us money.

And, you can't unionize China - The People own China, and The People are not going to allow unions.

[momonkey]

Originally Posted by KevK

I agree! Let's tunr this place into a craphole too so we can compete with the Chinese! By golly if they will work for 50 cents an hour, we will work for 30 cents an hour!

You're the liberal so don't act like your crowd isn't the one driving business elsewhere. Liberals never met a new regulation or business tax they didn't like. We could demand wages if we didn't run-off good companies. But why would any international corporation want to stay in the US? What is the advantage?

Lazy, greedy workers with EPA, OSHA, union reps and lawyers on speed dial?

Some of the dumbest empolyees on the planet thanks to the NEA's monopoly on education?

Stacks and stacks of regulations?

[MovingForward]

Because American business is completely devoid of ethics.

They don't care that American workers lose their jobs.
They prefer countries where environmental laws won't require that they clean up their mess.
They don't mind using slave labor, including child labor.

American business--on a global scale--is run by thieves and maniacs.

There shouldn't be outsourcing to anywhere.

A new kind of American businessman--a southern man with global influence:

http://www.ted.com/talks/lang/eng/ra...inability.html