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I appreciate the well thought our response.

I offer a counter on one point:

"If you want numbers that can't be faked, inbound container counts at the port of Los Angeles are up."

There is a world wide glut of shipping capacity. http://money.cnn.com/2016/03/31/news/economy/china-shipping-...

port of LA could still be up but perhaps it isn't really an adequate example to generalize.

otherwise, I am in the same place. Sure, countries where production left due to labor costs will be able to compete again, and will enjoy some advantages around strong research institutions and being close to their markets, but its silly to think that China won't now have a strong consumer market to provide for, that they can't innovate, and that they can't have top tier research. I have lived in the US and China and I always get this feeling that Westerns think they have a monopoly on ideas and China has a monopoly on cheating/cloning/cheap. They are all wrong.

also, I would love to offer some interesting numbers

I manufacturer in china (https://flair.co) and just recently got some quotes from Bay Area Metal shops.

A tool for metal stamping that costs me 5KUSD in China was quoted to me for 55KUSD in the East Bay. And, the 5K cost gets refunded to me after 40K pieces are bought...

The notion that there aren't significant cost differences now is also misrepresented in the article. Sure, I would love to produce parts next to my apartment both because of convenience and proximity to my market (not because of bruhaha made in america nationalism nonsense) but it simply doesn't make financial sense.

So get that tool in China today because you need it today.

The article was about the future. All signs are pointing to that tool costing you ~7.5USD in the US in the near-term future. With better shipping, support and logistics. The price differential is going to, at some point, matter way less than those other considerations and you may well decide to eat the entire $7.5K switching cost just to get access to them. I buy all my iPhones retail, for full price, from Apple.

Of course China is going to win a bunch of price races today, it's like competing in swimming vs. Usain Bolt as a varsity college swimmer. Sure, you might win the first few races. But once Bolt gets serious, he's going to be able to level his skills up way faster than you will, even given your 5 year head start. His genetics are simply better.

The US just has better DNA for commerce. Other countries can win battles, but never the war.

> The US just has better DNA for commerce. Other countries can win battles, but never the war.

As concise and positive a statement of religious faith as any I've ever seen.

There's always a certain amount of faith involved in future-predicting. Show me a sure-fire way to predict the future in any better way, and I'll take that and make billions with it.

If seeing what you want to see qualifies as prediction, I'd say you have it down pat. Congratulations in advance on your Thielesque attainment.

We're all riding on the shoulders of giants. The men who designed the postwar world were remarkably prescient in their engineering of affairs to benefit the United States.

The US has another decade or two of riding that wave until things get hairy.

The problem is the can-do, hardcore engineering types (particularly those without college training) are gone and supplanted by layers of bureaucrats and bean counters.

Have you read "The Accidental Superpower"? Highly recommended.

It covers the demography, geology and geography that guarantees the USA will continue to be the predominant power for the next 25 years, if not longer.

Not sure I buy all his arguments, but definitely worth a read.

Not even. Religious faith is usually disconnected from reality, and in a way can't be proven false. Here a simple check backwards and outward will tell anyone that, if "DNA for commerce" makes any sense at all for a country, it applies very well to China.

> His genetics are simply better.

> The US simply has better DNA for commerce

I'm sure the price will drop in the US for manufacturing devices (because the alternative is going out of business -- very few businesses are so sentimental about nationalistic supply chains that they'd eat a multi-hundred-percent markup).

But I'm interested in a more fact-oriented discussion (you probably don't think those are specific, detailed facts). The US, for instance, is relatively open for free flow of capital into and out of the country -- China doesn't allow that, and that helps commerce here. But if China changes their policies (which is not totally impossible), and, for instance, capital transfer out of the US is restricted as a result of a negotiation with Mexico (which a presidential candidate seems to be willing to do) then that advantage disappears. The Could also disappear if another major party's candidate for president gets their wish as regards offshore profits. Plenty of protectionism in all major parties these days, enough to sink this advantage, at least.

The US has a relatively high-trust business culture, which is more durable. But it's also changing in China, moving (perhaps not as quickly as some would like) away from a guangxi-based business system.

So a lot of these theoretically defensible advantages are actually pretty weak, and (while defensible) ill-defended.

> But I'm interested in a more fact-oriented discussion (you probably don't think those are specific, detailed facts).

I like facts as much at the next guy, but good, actionable, agenda-free facts are actually pretty hard to come by. So many times I've read a convincing article painting things a certain way, and then later seeing one convincingly saying that the previous article was full of misinformation.

You don't get out of the need for good, experience-based intuitive analysis just by looking at facts. And facts won't prevent you from being horribly wrong.

> Plenty of protectionism in all major parties these days, enough to sink this advantage, at least.

Protectionism is fighting a tide, it doesn't actually possess the capability to reverse decades of progress on globalization. Only to accelerate or decelerate it. It's now market forces that make the biggest difference, not political ones. Politics was never bigger than the market anyway, which is why market-friendly policies are better for people in the long run.

>genetics >has better DNA

It's a bit racist, isn't it?

I don't see any mention of race. Is the belief that phenotype expresses genotype racist?

nationomics ?

It's not literal. It's a comment about culture, not actual DNA.

When I was younger a common thing people said about China was that they were culturally incapable of innovation, and in my parents youth the same was said about Japan. Several years ago I found an article about olde-timey racism that said the Germans too couldn't innovate.

Where I'm going with this is you need to be extremely careful about these kind of blanket statements because you almost certainly have historic blinders on.

The US was the world's leading commerce nation from the 1950's (after the WW2 and the collapse of the British Empire). Based on sums of imports and exports it exceeded very other country comfortably.

Until 2014, when China overtook it.

While your argument about the cost of production isn't too far fetched, it is unclear what this magical "DNA for commerce" you speak of is? I've heard of this thing called "American Exceptionalism" - is this an example?

> A tool for metal stamping that costs me 5KUSD in China was quoted to me for 55KUSD in the East Bay. And, the 5K cost gets refunded to me after 40K pieces are bought...

Mechanical engineering in the US DRIVES ME CRAZY.

For electrical, China is 1/2 to 1/3 the cost. They also horribly screw up 1 in 3 that you have to redo completely. This is fine if you have the time. Otherwise, you go domestic.

Everything associated with electrical in the US understands that they are competing on turnaround, high-margin, high-value, and customer service. Yes, they're more expensive than China, but not unreasonably so.

The mechanical stuff is just totally out to lunch in the US. My gut feel is that mechanical shops in the US are in two categories: 1) competent, and running at 100% capacity or 2) incompetent, and running at almost 0% capacity. This is a recipe for frustration. You either can't get time ot can't get knowledge.

Consequently, all of the good electrical manufacturers I know have mechanical on site too (CNC milling, lathe, and probably injection molder). Even if it sits idle 95% of the time, that ONE time they need it NOW, it just paid for itself.

"My gut feel is that mechanical shops in the US are in two categories: 1) competent, and running at 100% capacity or 2) incompetent, and running at almost 0% capacity."

Buying something mechanical in the US is disorganized. There's nothing like Alibaba's wholesale side, with a reputation system. There's ThomasNet, but it's just a big industry directory. There might be an opportunity here for somebody. But it's not going to be a huge business.

Designing something to be injection molded is hard. There are lots of little things that run the price way up. There's "Injection Molding Part Design for Dummies", which is $495 on Amazon, but Proto Labs will send you a copy for free if you ask them. Incidentally, all TechShop locations have a small injection molding machine good for about one part a minute, and a CNC mill on which you can make a mold. They even have Autodesk Moldflow, which helps design molds using finite element analysis to predict what will work. So you can make prototypes and learn what works.

If you're dealing with a mold-making shop, if you send them files in Inventor or SolidWorks along with a Moldflow analysis, you'll probably get a much better price. In mechanical, the more clueless you are, the more it costs.

EMachineShop has a nice little CAD program which knows what their shop can do and will price the job. It will tell you if they can't make something due to some constraint (sheet metal bends too close, hole too deep, etc.) and gives hints on how to make the job cheaper. Those guys have been around for about 15 years, do a nice business, but haven't grown much.

TechShop is great for hobbyists with some money to spare (there are a lot of hidden costs, both time and money, that they don't tell you about), but terrible for professionals. Their machines are regularly not working for days at a time, and I've had experience with multiple locations so this is indicative of the company as a whole.

If you want to manufacture with plastic, I'd be surprised if there was any reason to do it outside of China. If you're working with metal, it's a much trickier question.

Along with EMachineShop, there's also Plethora. I've never used Plethora and it seems incredibly limited, but they've been around a few years and have a ton of people on staff (which can't be cheap) so they must be getting decent business.

Your mention of Alibaba made me think of something. I believe the electrical manufacturing world is much more globally integrated than the mechanical world. I say that as a practicing mechanical engineer. A resistor, capacitor, chip are the same in US, Europe & China. On the mechanical side all have different material standards and industrial standards.

And here is the US's disadvantage there, we are still on an island when it comes to that stuff. Sure you can get some metric nuts and bolts here (in US steel grades). But try buying European grade steel here (nigh impossible). Try getting an EN (nee DIN) or JIS flange here (do-able but lots of calling around). Try finding an engineer competent in the PED or machinery directive.

In Europe and Asia they can get US materials and make to our standard and sell to us. But its much harder and more rare to make products here and sell them to Europe and Asia. Usually you are making a US product, and "proving equivalency" with the European and Asian standards.

It's not even that easy to get metric nuts and bolts (as a hobbyist at least).

"but Proto Labs will send you a copy for free if you ask them"

... and you happen to have a U.S. or Canada mailing address.

http://p.protolabs.com/injection-molding-dummies-book

"*We currently ship promotional items to the U.S. and Canada only."

I'm not a mechanical engineer, but if I were to make mechanical parts I'd probably venture up to Detroit, Windsor, Seattle, or Los Angeles to tap into automotive and aerospace talent.

It's hard to believe there aren't a ton of shops out in those areas to help keep costs competitive. But I could see costs remaining high for the reasons you stated - high cost, high value industries.

There are a few companies that totally get it though. Protolabs has an amazing service, it is highly automated so you save the programming costs that makes local CNC manufacturing so high. They are limited in the features, but for the majority of things they are fast and reasonably priced for low quantity. There are similar services for sheet metal I've used as well.

However even with that service, I have a CNC machining place I use in China that will beat even automated vendors. It takes 6 days to ship instead of 3, but the prices are generally lower, they can do a lot more finishing, they can do much more complicated machining and higher tolerances.

I feel bad for our local CNC guy as he rarely gets any work from us anymore. He has always had our best interests in mind, and has bailed us out on many occasions. He just cannot meet the lead times we can get elsewhere, we cannot afford to wait 2-3 weeks for a part when we can get it in a week. His prices are also higher, but that really wasn't what drove us elsewhere.

In my experience there are plenty of US shops happy to get work on a few specific widgets, typically by having a CAGE code. They aren't necessarily incompetent in the act of making a specific part, but they aren't optimized in a production sense.

A quick checklist for sniffing out shops: 1. Are they ISO? Getting through an ISO audit says something about the facility. 2. How much WIP is sitting around on a visit? With the best vendors I've worked with you'd swear they didn't do anything until you see their shipping lanes. Low WIP and busy shipping is another positive. 3. Ask to see their rework area. If they have one and SOPs for handling rework, that is a positive 4. Ask to see their documentation for current parts. PPAP, CoC, etc.

The greatest mystery in economics are things like this price difference. Why does one cost $5k and the other cost $55k? Some economics PHD should go and research into this and figure out why there's such a huge price difference. It would be interesting if they would go beyond the usual "just so stories" and simple answers and chase the numbers as far down as they can.

The answer in this case is indeed simple: cost of living. It's really about 10x difference.

Why is food so much cheaper? Why is land so much cheaper? Why are utilities so much cheaper? What are they doing that makes everything so cheap? IMHO, this is really a phd thesis sized undertaking and would probably teach us a lot about the inefficiencies in our western system.

It's also not just because they're underdeveloped. Some cities in developing countries, like Luanda, Angola, have some of the highest costs of living in the world.

Land actually isn't that much cheaper, but the others are true. It also isn't a Western System issue; Japan is actually one of the most expensive countries in the world.

A lot does come down to being underdeveloped. Or more specifically, living standards are lower, especially with the lower class (e.g. the poor in the US live far better than the poor in China). Take away all of developed nation's anti-poverty programs and minimum wage laws (that provide for floors on labor costs), combined with cost-inducing regulation that exists to protect human health and the environment, and yes, you would make products in the economy a lot cheaper.

Note that Luanda is only outrageously expensive for ex-pats, if you want to live how you are accustomed to in the West.

If you accept the lack of access to Western goods, then it is much more reasonable.

Why is food so much cheaper? Why is land so much cheaper? Why are utilities so much cheaper? What are they doing that makes everything so cheap? IMHO, this is really a phd thesis sized undertaking and would probably teach us a lot about the inefficiencies in our western system.

Have you ever been to one of these places?

People are much poorer, and the standard of living is much lower. Things like utilities often don't exist, or or much less reliable than in richer countries.

Some things are cheaper: branded clothes and foods are generally priced beyond the means of most, so people don't buy them. Transport is cheaper, because people don't own cars - they walk, or bus, or share motor-scooters.

Accommodation is cheaper on a per-person basis, because 6 people in a single bedroom apartment is normal.

A few exceptions exist of course - the US health system costs a lot more than anywhere else in the world given the health outcomes. Places like Chile and Cuba pay a lot less for health care, but sit above and below the US on tables of life expectancy[1]. There are also things like extreme inequality in some countries which can cause other distortions.

But there generally really are no secrets - they live cheaper because they are poorer.

[1] https://en.wikipedia.org/wiki/List_of_countries_by_life_expe...

> Why is food so much cheaper? Why is land so much cheaper? Why are utilities so much cheaper?

Don't forget about currency manipulation. People in China are buying those things in yuan and then to do the comparison you're converting it to dollars at the manipulated exchange rate.

I am no economist (I am pretty sure this a well studied and documented field), but as some one who has lived in both developed and developing countries, I imagine it is because people from third-world country accept much a lower standard of living than a person in the first-world country. This is pretty much reflected in every aspect of life to the littlest detail. Everything from quality and size of accomodation, to the vehicle you drive, the quality of food, roads, toilets, water, etc. A shop or an office or home, might be more shabby in a poor country than in a rich country. Even if functionally they may be the same, a higher level of expectation is there in a rich country.

All this costs money, and it all adds up. Once the average Chinese citizen demands to have the same standard of living as his/her counterpart in the west, the price advantage will disappear.

I find very hard to believe that it is just cost of living. I am more willing to believe that, instead of that, what happens is that people in China just expect to have less resources to live.

This opinion is based on my observation of how wages work in Argentina, in comparison with the US. Food (eating the same food) is cheaper in the US, rent (renting the same kind of appartment) is cheaper in the US, going to the cinema (same movie!) is cheaper in the US, buying a car (the same car) is cheaper in the US, buying clothes (the same clothes) is cheaper in the US.

Even thou, when I worked in a Boston based company they claimed that our salary should be lower because we had a lower cost of living. It is just that they can get away with paying us less. The chinese (or argentinian) cost of living being lower is a lie. It is just that we cannot do the things that USians expect and our salaries are reduced accordingly.

Its not a mystery at all. China has tons of free world class education based purely on academic ability and a couple of billion people educated to a world class standard.

The US has virtually no education system, what does exist is expensive and not practically oriented.

Basic supply and demand. US has high demand for skills and totally non competitive supply. (even in tech now, which is why they need the H1B visa thing)

But dont expect it to get fixed. It's that way on purpose.

https://www.youtube.com/watch?v=ILQepXUhJ98

When I was in elementary school, we were warned that we'd have to start going to school on Saturday to keep up with Japan.

Replace China with the USSR and your argument could be from the 1960s. Replace it with Japan and it could be from the early 90s. Do you see a trend here?

Every few decades we have a new enemy that's going to destroy our economy. Business interests push these narratives to move students into fields that will drive down labor costs for their companies. H-1Bs exist for the same reason.

Oh...and How many Americans enroll in Chinese Universities?

well. japan destroyed us car manufacturing.

and the ussr. despite everything. destroyed us global military equipement sales.

China seems to be picking at a dead carcass tbh, not exactly much left to take.

US is so scared of chinese tech advancement they have banned exports of high end intel chips there. but that hasnt stopped them taking all the top places of the worlds fastest supercomputers.

As soon as a couple of Chinese unis overtake the ivy league colleges will there be anything left in the US except bones?

would you even know whether they have already?

perhaps you missed junes

China maintained its No. 1 ranking on the 47th edition of the TOP500 list of the world’s top supercomputers, but with a new system built entirely using processors designed and made in China. Sunway TaihuLight is the new No. 1 system with 93 petaflop/s (quadrillions of calculations per second) on the LINPACK benchmark.

> japan destroyed us car manufacturing.

Hardly. Toyota and Honda both make cars in the US, which seems counter to saying they've destroyed it.

Even just looking at the American manufacturers, America still does alright. For instance, in a list of the top 10 best-selling vehicles in the world in 2015 [1], yes, a Japanese car came in first, but a German car came in second and US took up the third and fourth spots.

yeah. Detroit. still the booming global center of car manufacture it was in the 80s.

Maybe if you close your eyes and click your heals together three times.

Meanwhile. in the slightly more real world.

http://theweek.com/articles/461968/rise-fall-detroit-timelin...

It's a lot more complicated than that. If you were forced to buy a US manufactured car in in 1979, it was pretty much guaranteed it would be an ugly, unreliable piece of garbage. And Detroit had already been a mess for decades. In response to Japanese competition and investment, US auto manufacturing quality has completely turned around, and is vastly better than before Japan was a big presence in the US market.

If it is such high quality now why did Detroit become the largest city ever to file for bankruptcy in 2013, even after the $17.4 billion bailout to GM and Chrysler in 2008?

How is that "vastly better"?

We're talking about production not the product. and that isnt complicated. Asian markets have an abundundant supply of highly skilled labour. western markets do not.

furthermore. that isnt a surpise. its policy.

>Detroit become the largest city ever to file for bankruptcy in 2013,

Detroit filing for bankruptcy has more to do with car manufacturing moving to southern, union free states and Mexico than it does with Japan.

funny how americans blame the labour unions for the destruction of their car manufacturing. when the country and companies that forced that destruction have

https://en.m.wikipedia.org/wiki/Labor_unions_in_Japan

It's quite simple. Detroit was built on manufacturing jobs. Those jobs went to southern states and Mexico. They didn't go to Japan.

The reason they went south is that labor was cheaper there because those states are unfriendly to unions.

I'm not blaming anyone, I'm pretty pro union myself, but that's what happened. You can argue until you're blue in the face, but it's a fact that the manufacturing jobs left Detroit for southern states and Mexico, not Japan.

Detroit is a city, not a car manufacturer it has its own set of problems. If GM/Ford/Chrysler filed bankruptcy, you'd have a point

> and the ussr. despite everything. destroyed us global military equipement sales.

http://www.nytimes.com/2012/08/27/world/middleeast/us-foreig...

"Overseas weapons sales by the United States totaled $66.3 billion last year, or more than three-quarters of the global arms market, valued at $85.3 billion in 2011. Russia was a distant second, with $4.8 billion in deals."

only if you pretend things like this

http://news.sky.com/story/china-signs-russian-gas-deal-worth...

were not part of a gas for weapons agreement.

which it. well. was.

then you have stuff like http://m.sputniknews.com/military/20160217/1034893494/russia...

the difference is. both china and russia sign deals "payment in kind" us signs deals where they get nothing but some of their debt paid off from other (broke) g8 countries.

you know that's not sustainable for the us right?

China is paying Russia about a bit more than $10 billion a year for that deal. Even if some of that money is going for weapons, the US is still doing much more in total arms sales than Russia.

I'm not sure why I bothered responding, because I'm sure you'll reply with something about how they are really paying much more than that under the table (even though no reputable news sources have reported on it).

It's clear to reasonable people that neither the USSR, nor Japan destroyed the US economy. China will not destroy the US economy either.

This fear of China is caused by inappropriately extrapolating current trends, i.e., China is growing at 7% per year, and this rate will continue unabated despite that fact that historically GDP growth rate always declines as a country becomes developed.

As to your earlier assertions about super computers, those numbers are close to meaningless.

The UAE has the world's tallest building, should we be afraid of that?

If the UK wanted to build the world's fastest super computer, they could. If the US wanted to we could. It's just a dick measuring contest that is primarily a function of how much money a country currently wants to spend on building them.

The only thing faster super computers prove is that they are simply worth more to China than they are to us. They are massively behind us in nuclear capability, so the ability to conduct simulated nuclear testing is more valuable to them. The PR win is also correspondingly more valuable to them.

china gdp per capita even as it becomes the worlds larget economy this year is only $6,807.

Their growth rate is not going to slow or deviate significantly in our lifetimes.

Yes, I've seen the arguments to the contrary. But they are all based on wholly flawed assumptions.

the op is "Why China won’t own next-generation manufacturing".

Well. the worlds fastest super computers are what deliver next-generation manufacturing.

As for massively behind the us in nuclear capability.

Not for long. They already poached the US's best talent. https://www.technologyreview.com/s/542526/china-details-next...

>Their growth rate is not going to slow or deviate significantly in our lifetimes

I'm not sure what you're basing your projections on, but China's growth rate has been heading down for the past decade. They are currently at half of their max GDP growth rate.

There are zero serious forecasts that show a constant ~7% growth rate for the next 50 years (based on your our lifetimes quote). That is insanely optimistic beyond even the dreams of the Chinese government.

>Yes, I've seen the arguments to the contrary. But they are all based on wholly flawed assumptions.

Again, any evidence that doesn't fit your narrative is rejected.

>Well. the worlds fastest super computers are what deliver next-generation manufacturing.

That's not even remotely close to true. Next generation manufacturing will primarily be driven by advances in automation that have little to do with super computers. The world's fastest super computers aren't even close to the largest factor in advancing manufacturing methods.

>Not for long. They already poached the US's best talent.

That article doesn't show anything except that a group in China has a goal of commercial molten salt reactors by 2030. According to the article they didn't even have funding yet past next year.

Stop posting random tangentially related articles that don't prove your point.

Seriously are you just trolling me? You really believe that China's growth rate won't slow over the next 50 years? That's completely insane.

I'm not sure what you're basing your projections on, but China's growth rate has been heading down for the past decade. They are currently at half of their max GDP growth rate.

lower growth last years was policy -prevent "overheating". http://www.independent.co.uk/news/business/news/chinas-overh...

now it isnt

http://www.tradingeconomics.com/china/cash-reserve-ratio

still have something like 20 or 30 years left before they reach their urbanisation goals. And things dont stop there.

Your out of date and worthless references don't do you, or anyone else any favors here. The article from 2011 about China overheating is laughable.

China's economic numbers have long been known to be fiction, regardless of the truth or facts that may play a small part in their creation. http://www.economist.com/news/china/21689628-chinas-obsessio... http://www.wsj.com/articles/SB100014240527023034481045791521...

Current articles about energy oversupply only reinforce, in a current context, the fact that their GDP, growth and other financial numbers are fabricated: http://www.bloomberg.com/news/articles/2016-01-26/china-ener...

The only way to understand Chinese financial conditions is through hindsight. This is problematic for the global economy, but it's even more problematic for China. While their resources are massive, they are not infinite. The point is that it is not sustainable and eventually they will be forced to operate in reality and communicate their reality.

Not sure what you mean by "out of date" in 2011 they launched a policy of reducing growth by raising the reserve ratio massively, they are targeting "high single digit growth".

That growth is all mostly coming from the urbanisation policy. from 98% of the population living and working in the paddy fields a few decades ago to their target of 90% living in modern super cities.

They can literally double their output from now simply by spreading technology from the early 1900s, rather than pure manual labor. But they are going straight for "next-generation manufacturing".

"Energy oversupply", "city oversupply"... Those would be those "flawed assumptions" I was talking about. Its only "oversupply" if you think it impossible they get from the 56% urbanisation rate they are currently at, to somewhere near the 95% urbanisation rate of countries like the USA. Which is the current policy.

And pretty much anything is much much more productive than picking rice from a paddy field by hand, which is the current working day of 46% of the Chinese population - more than 600 million people - or twice the population of the US.

http://www.worldbank.org/en/country/china/publication/urban-...

By 2030, up to 70% of the Chinese population - some one billion - will be living in cities.

If they wanted to they could target high triple digit growth because it is all fiction.

China's diminishing growth, and a current, global energy oversupply are not flawed assumptions, they are global economic realities. I provided credible, current references to support this point in my previous post.

You can beat the drum about growth, urbanization or broad assumptions, but you fail to address the primary problem that this merely propaganda not grounded in credible, objective data.

I was more concerned my comment about China in hindsight and your out of date references would be misconstrued as contradictory. Your reference was out of date and already proven false and thus irrelevant. China can only be viewed in hindsight because it takes years to disprove the current propaganda.

is this a cause and effect thing you are struggling with?

didn't they teach you in school the effect (lower growth) has to come after the cause (raising the reserve ratio)?

Or is it just that because US policy has had all policy levers thrown on full speed and they still can't manage an inch of growth that you don't believe in them?

If that is the case, newsflash, that is because the workforce population isn't growing and the education system is shit.

You fail to address the elephant, so why chase the mice?

I thought the article was an interesting perspective because China does own manufacturing today. This is suggesting that next-gen manufacturing will present new challenges and benefits that will make it more difficult for anyone, in this case China, to own it in the future. In particular, this creates opportunities in engineering and automation, which from the comments, seem to be of particular relevance for this audience.

If you can't elevate your debate while acknowledging the fictional nature of China financial information this isn't much of a conversation.

Thanks for your perspective though.

The article does not in any way address the fact that China has the very low cost base (massive numbers of highly trained human capital and substantial investment in physical capital and R&D) to guarantee pretty much no other country can compete.

Does it?

Instead, it seems to start from the premise that they are not already the world leaders in "next gen technology".

Which is a total fallacy.

You know lines like:

China’s manufacturing engine has largely stalled

and

Even though China is graduating far more than 1 million engineers every year, the quality of their education is so poor that they are not employable in technical professions.

->utter BS. For a start, their "top 10%" is greater than the total number of US graduates. And their "Bottom 10%" is still more employable in a technical profession than an average US graduate.

Unfortunately, when you focus on human capital in China, you can't dismiss the fact that China, particularly in the manufacturing sector represents modern day slavery. The fact that no other country can compete only supports this.

In fact, the article does address this (cheap Chinese labor/slavery), and proposes that the shift in need of labor through robotics and automation, essentially resets the playing field in that regard.

They are not already the leader in next-gen technology because it is next-gen, is is in the formative stages. It is the leader in manufacturing, the current generation.

I don't agree with the statement that their manufacturing engine has stalled. Their growth is diminishing and their dominance is at risk.

I agree that the statement that their education is so poor they are not employable sounds like b.s.

That was never my point. If you can respond to my points, that would be a start. If you could refute them rather than promoting the propaganda I would be impressed.

->They are not already the leader in next-gen technology because it is next-gen, is is in the formative stages. It is the leader in manufacturing, the current generation.

Erm. They are the leaders in everything from manufacturing to supercomputing. What does that exclude?

-> Unfortunately, when you focus on human capital in China, you can't dismiss the fact that China, particularly in the manufacturing sector represents modern day slavery.

Maybe, maybe not. Working for western companies like Apple, sure.

Alibaba

probably somewhere between conditions at Google and Ebay.

At least you are funny...

So, it's the Western companies, like Apple? I don't think so. Western society may provide the demand and the capital to create the conditions, but the Chinese are the perpetrators of slave labor.

Can you provide some examples of where they are already leading in a field that doesn't exist yet?

nuclear: msr projects and their fusion reactors.

various space based warfare kit (shooting down satellites for example)

that quantum communication satellite.

Im sure there is more.

Then you do believe China has 50 years of 7% growth.

It seems you are a lone prophet crying out in the wilderness. No one else, not even actual Chinese propagandists would make this claim.

I've nothing left to debate with you. Your absurd exaggerations show that your arguments are based on nothing but your own pet theories augmented by Chinese propaganda.

I have no idea how someone outside of China could fall harder for Chinese propaganda than actual Chinese people.

Could you elaborate a little on what this tool is? Are you paying for design work or just manufacturing? Typically with non-trivial mechanical parts there are also jig design costs.

If you're making a PCB then pretty much anything within the design rules goes through the same process. With mechanical parts manufacturing is more complicated. E.g. someone may need to figure out how to hold the part so it can be machined from different directions. If you specify tolerances then it can be a non-trivial exercise in how to sequence things to meet your tolerances. etc.

The cheap part from China possibly includes significantly lower rent, lower salaries, cheaper equipment, no benefits for employees, no insurance, less concern for safety, some corner cutting, an easier regulatory regime (dump that acid down the drain?), possibly economy of scale now that they're doing so much manufacturing.

At any rate, for low volume jobs where the overheads dominate and there's no special knowledge required there's no way the US can compete. Once volumes get up and/or there are some more complex specialized tasks the playing field is more levelled. The kind of manufacturing that Apple does where they have a room full of CNC mills making iPhone casings is not going to be that different. If there was sufficient business/margins in the lower end someone would invest in more automation to try and bridge the gap but most likely it's simply not worth it to participate in this race to the bottom.

EDIT: Btw, cool product! Good luck with it.

When manufacturing people talk about "tooling", they mean custom stamping dies, molds for injection molding, and other one-off items used in making parts. These are complex, custom-machined items usually cut from hard metals and machined to tight tolerances. Designing them is tough, making them is expensive, and if there's a mistake anywhere, it's very expensive to correct.

Take a look at some Youtube videos of progressive stamping for a sense of how ordinary metal parts are produced. Look at the elaborate custom tooling required. All the work is in the tooling. Once the tooling is right, the stamping process is simple and cheap.

Here in the UK it's relatively common to get the tooling made in China but do the manufacturing over here. They're really good at making tools and yes a 10x price difference is not unusual. I find it a good compromise. The unit cost is higher in the UK, but that is wiped out at the low volumes I'm doing by the time and cost savings in QC and the PITA that is dealing with incoming freight.

For an uniquely millenial perspective of the prospects, quandaries & aspirations of the Chinese middle class one might want to glimpse at this refreshing, slightly irreverent & eminently watchable, BBC documentary called Secrets of China.[1]

Surely there is much better hard-nosed reportage of the ground realities of the struggles of the burgeoning Chinese middle class, out there. But this series covers a broad swath of the demographic without putting too fine a point on just the commerce, trade and civil rights aspects.[2][3]

[1]

http://www.bbc.co.uk/programmes/b068237s

http://www.bbc.co.uk/programmes/b068237s/episodes/guide

[2]

BBC3 Secrets of China: Fit in or Fail

https://vimeo.com/137839217

[3]

Secrets Of China | Season 1 Episode 2 | Desperate for Love

https://www.youtube.com/watch?v=wBzu1nGz74o

Here seems to be a good analysis of the 6.7% figure by Christopher Balding on FT Alphaville, and apparently it doesn't match the constituent granular data: http://ftalphaville.ft.com/2016/08/02/2171409/guest-post-fur... Also, direct comparisons between China's and US's GDP growth rates are usually very flawed or misleading because of differences in how developed those two countries are; it's a tricky/unsettled matter, but 6.7% > 2.2% does not imply anything much, because it should be much easier for China to grow before it reaches US's levels of wealth.

> Here's China's GDP growth.[1] 6.7% annually this year, down from 7.9% in 2023. The US is 2.2%. China is not "stalled".

If you trust any numbers China puts out publicly, I got a bridge to sell you...

China builds completely empty ghost cities to try and hold onto their GDP growth rates. Many of the older ghost cities are falling into disrepair because nobody is using them. They're becoming decrepit. Sure, there are a couple here and there where people actually moved in and use them, but the vast majority are still vacant and due to lack of maintenance, falling apart.

If that doesn't scream "hollow numbers" I don't know what does. Not to mention, China has routinely shown they will fudge the numbers without hesitation or care.

Ghost cities? You think the real estate developers are idiots developing flats they can never sell? Please read more about real estate market in China

There are no real estate developers in China. At least, not the kind you're thinking of. The government itself, the PRC designs and builds the cities. They are the alpha and omega in China.

See here about ghost cities - "The unreal emptiness of China's Ghost cities": http://www.wired.com/2016/02/kai-caemmerer-unborn-cities/

And a dissenting opinion for balance http://www.forbes.com/sites/wadeshepard/2016/04/19/an-update...

No need to downmod me (I was sitting at +1 until literally the moment you decided to comment), what I said was 1,000% factually correct. There ARE ghost cities in China, A LOT of them. Just because some of them are no longer completely vacant doesn't mean they stop existing. The majority of those cities are still vacant. End of story, really.

Actually, it isn't. Over the last 2-3 years, China has been soliciting reporters and writers to come out and visit some of their "ghost towns", specifically, the few they've actually put some people in. They pay for the entire trip and basically give them the emperor treatment while there. The hope is that these writers will come back and write fluff pieces like this, they want to change public perception. I know they do this first-hand because my ex-roommate is a writer for a large well-known website and received such an offer. He had to turn it down because his wife was 8 months pregnant otherwise he would have went.

Oh, and your article talks about reasons for delays in getting people in there. I think the entire article is a load of BS (it's forbes, after all). Many of those ghost cities are beginning to fall into disrepair due to how long they've remained empty. At that point, justifications and excuses become a moot point.

Recent data reveals much worse numbers for the US economy. Annualized GDP growth over the last 3 quarters (of available data) is closer to 1% per year. See http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease....

Have a feeling US will soon change the definition of GDP to attain higher growth rates soon. GDP is a fuzzy concept... like inflation.

that's a really insightful and well written response.

except for the ad hominum at the end. that felt distasteful.

It's well deserved

http://observer.com/2012/07/woo-boy-singularity-us-vivek-wad...

One of the comments in the linked thread suggests that he might have picked up a different definition of the word "homeopathy" in India, one that includes actual herbal medicine in addition to the nonsense dilution thing.

China grows at 6.7% because the US grows at 2.2%.