The China Conundrum – are we headed for a supply chain meltdown?
diginomica.com
diginomica.com
I have one former Chinese partner in China, now far too successful to care anymore, who described it to me this way... You have farmers and one generation down from farmers managing the largest and arguably most complex political-economic situation in the world. The expertise is simply not there at the highest provincial and central levels, where its desperately needed. The political will isn't there to rebalance.
The meltdown won't just be the supply chain. China's military will impact the nature and breadth of the decline.
care to elaborate?
If you are in a conflict zone, exporting to other countries isn't the way to get rich; selling to the armies is.
For example, right now I'm helping indirectly build an AI, that is being shared with a sister company in China, and I just recently learned about said IP sharing law and am now concerned that it will be used in military applications (such as autonomous boats or drones, but with lethal application)
And when it comes to any country or even the Green Peace's Rainbow Warrior fighting Vessel or even me myself, if I get my hands in the Lex Luthor's new A.I.
Humans are here for profit, or what.
This is Naive: to expect is only from China......
Come on...
SO if someone(from beijing, moscow or washington) Have all the access to my unedited file, and they have it, my friend, believe me....
They know I am , just a old crazy Marijuana smoker who is Jobless recently and is bored and has nothing better to do then write fucking stupid and insane comments on hacker news....
Old people withou a job is the worst thing for this old people Mental health....
I should find a job as soon as possible, even if is cleaning the streets or taking care of public gardens...anything to do but stupid internet comments...
well and I am for hire, and now , the most important, If is for the good of humanity, I will do it, no matter who is for, ok, i said for the good of humanity...
so... I would do it even for free...but i am broke , no money even to buy my marijuana now...so...
Anyway, I care more for the Good-Faith then the money...
I did't go to the obligatory (law obligation) military service because they decided I was physically useless for them, and I didn't had a high-school degree, so i was intellectually useless for them too....But I didn't want to go....
Because they pay you 0 bucks and I was in age of having girlfriends and smoke pot...But also because I believe in Peace. I am a pacifist...
But I fucking admire people who has fucking Balls and people who has fucking Honor, like the guys in the Navy.
So...they know I am for peace and pot.
...even forgot to say that he was my grandfather, and there is a street with his name in owr town...
Already lets open the last bit...The street name is actually of my granpa's father, so my grandgranfather or something like this. American (U.S.) family.
The little hospital my grandGrandpa built, where my grandpa was born, and where my father was born, and where I was born...
still stands to this day, unmodified, in his original taste, since my granGranpa opened it.
Dr. Taves Health Home. We accept credit cards. look at Altavista : )
I wonder who looks Silly, Now.
If I was the boss of N.S.A. , Mister arminiusreturns, I would not hire you, or I would fire you now, because you gave yourself up so easily, and you didn't see even who you was talking too...easy research...easy logic...easy "secure" broke with silly comment...you don't know how to even secure, and you are Fired.
If doing business in China means funneling new tech to the PLA that could result in theoretical American deaths, then we don't do business in China anymore.
A historical precedent would be the soviet union, where we wouldn't even let ball bearing be exported to Soviet block countries. You can already see this with the current chip wars.
If that is indeed the case, I think is too late, in my opinion.
The historical precedent doesn't account for the fact that Russia and China are currently members of the WTO and that they have their own group named BRICS.
But I applaud your initiative on thinking on the issue and the Logic of your thinking is Good, and this is the most important.
A bit of information less then the needed, in this case, doesn't mean the Logic was not good. So, the understanding can be good.
And something important I have to say, I think, in my opinion, that is a naive misconception to count non-nuclear non-strategical weaponry in any reasoning, those are just toys to play, to show to the other kids and make poor kids envy, they are not weapons, in the Real Game of the Globe. Count only the ICBC in your logic, and you can have a better understanding.
China never needed, nor used it. USA is not innovating, nor creating new technology, that's a myth, unless you call somebody creating a 1000th clone of Facebook a "technology."
USA sat on the back of engineering and programming sweatshops in the third world for 3 decades already.
It requires one to have a special level of insecurity, to go so far hellbent on claiming their creativity as to print it in bold letters that "we surely did not buy this off the shelf from OEM in China."
The rich elites in USA are the ones with the strongest "pain:" no Chinese parent in his nightmare will imagine spending 100K+ on dumb "creativity" or "leadership" classes for his child, but in the West... you know the story.
You must be joking with this.
attacking capabilities are believed to have evolved in the last 15 years.
And the Proton are the oldest of their rockets, my friend, and is still up and ready in this very moment....
While not between major powers, these wars have changed world affairs.
PS: You might not intend the way your comments come off. Speaking about another's logic for three paragraphs -- seems more negatively patronizing than anything else.
The US was a crucial partner in building up the nazi and soviet manufacturing capabilities.
Public US companies care more about the next quarter way more then ant nationalist loyalties.
You and parent are saying different things.
The US has historically had no problem trading with and building up any economy with cash (your point).
But once that economy reaches parity with the US, if they have serious ideological / political differences, the US is quick to lock down legal trade (parent's point).
This observation (in general about the West) was the origin of the "hide our capacities and bide our time" component of Deng Xiaoping's 1990 strategy that Xi (foolishly and prematurely, imho) threw out the window.
Their first products were really crappy - stereotypical "made in China" stuff - but cheap, and it carved out the niche. Then more expensive things started showing up, but they still cost 2-3x less than comparable Western offerings, at similar quality levels. Now, most of the mid-range optics segment is dominated by Chinese-manufactured electronics with American and European brands stamped on it.
And I can't help but think that every time an American gun owner buys another Holosun red dot, he actually buys two: one for himself, and one for a PLA soldier.
Finding cadres was really tough even for the simplest things. Finding a guy who can program a particular brand of chipshooters took 2.5 months. We found a single guy in all BC/Washington/Oregon area, and he demanded 100k+ for something that I can teach a highschooler to do. In Shenzhen, I'm 100% sure that I will get few solid applicants on day one for just any machinery brand.
Simple assembly line workers. 50k+ undergrad students were horrid workers, with terrible discipline. 70k+ masters students, just a bit better. People with years of work experience and 80k+ expectations finally did that, but they were still spending more time wiring simple electric bikes than Chinese highschoolers do. At that stage, we decided to stop.
It seems like you said something a highschool students could do but then you discuss masters degrees.
I've personally found that a lot of employers still hire like it's 2009 during the great recession. Sometimes these days you have to be more creative. Like hire an additional manager at $80k and then hire workers at $40k and have that manager be more hands on.
When an economy is expanding, it is statistically impossible to fill all positions with experienced workers because there are now more jobs than there were before but the same amount of experienced workers. The opposite is true during recession when the economy shrinks. In that case there are a surplus of experienced workers because the amount of jobs have reduced.
Please don't take that as criticism, I just wanted to shed some insight into hiring based upon the rate of growth in an economy.
Electronics assembly requires at least a high school level knowledge of things like physics for a person to just to have an idea what, and what for he is doing, and what each component does.
It does not work as a "fully mechanistic process" where assemblers are treated as brainless robots. It requires cognitive skills, despite of high class "creative" people hating to admit that.
At least in the state where It each, that means they know nothing about physics. Literally, all that's required is an introductory course split between chemistry and physics. Time constraints means the second one usually gets thrown under the bus, and they barely talk about the laws of motion, let alone electricity.
So, basically, these employees probably do have high school level knowledge of physics.
That said, basic physics in bloody useful as well. I was always a shitty student, but I am constantly surprised people can't even figure out that they need to use physics to know certain things. In contrast with things like economics, physics is actually quite forgiving for the layperson when it comes to casual discussions about e.g. transportation.
I went to a decent high school with science labs, but most knowledge seemed so abstract. How often do you do accurate chemistry in everyday life?
Classical mechanics, on the other hand, is most of life. Everything moves. And it felt pretty magical that suddenly I had math that could predict the future.
This way of "thinking" is what has happened to manufacturing industry in the states.
It works totally fine in factories staffed with thousands of "poorly educated" workers in China, but not in USA. Why?
China tends to have a much hire ratio of supervisors on the actual assembly room floor as opposed to in the office. In the west, many would consider it micromanaging.
Not sure if would have made a difference in your case, but just wanted to mention it.
The end result is that you have great jobs, but no good jobs. Because you've eliminated room for them in the economy.
From what I see, any deterministic back-office job that can be documented is gone by 2024 in leading enterprise companies (various tech). With first-order analysis jobs following in another 5 years (basic feedback ml).
In critical professions, there's a labor-vs-capital struggle. There's a critical shortage of workers (e.g. a nurse can get a job anywhere, tomorrow), but they're seen as cost-centers by the for-profit companies that are managing most of the employers (i.e. hospitals). So you get sluggish wage growth and chronical overwork / shortages as the management companies optimize for financials by delivering just enough service.
This was exactly what I remember, and literally the guy will take a tool that is not a hammer, a screw-wrench, and hit the shit out of the machine like it was a hammer, and then loose some screw, and then bang-bang again, and then tighten some other screw...
Even the young, like 26 y.o. guy , from faraway Sichuan Province thats works doing this will receive a respectul title...
... and will be called a "Gong" (engineer) For example, if the guy's name is Zhao, he will be called with respect even by the bilionaire owner of the factory with the name and title: "Zhao Gong".
Some old Eletric/industrial design like 66 years old are making good bucks still kicking, no one is at Key West drinking margheritas...
I find surprising that this was hard to understand.
Logic and common sense on text comprehension are at it's historic lows, it seems.
The wiring of PLC control panels with servo motors, vacum-pumps (AIR-TACs) and All the moving parts of big machinery is the Slowest job at a chinese machinery assembling factory.
It looks complicated at first, then you see it everyday a lot and it starting to look easy.
Then you try do do it by yourself in a PLC that you have programmed yourself in the simplest and smallest model of the machine and you see that is actually very hard job to do.
Its actually like programming, because if you wire the wrong little cable among hundreds of little cables then you have to "debug" the wiring to see where was the damn little cable miswired...
In this place she was a 16 old girl, who had a son at 14 or so, from GuangXi province, very beautiful mountains but also has poor areas , but she was so nice and so patient and so good-hearted, it was unbelievable.
And she would wire cables all day, but not fast, slowly...slowly...because is hard.
And she learnt everyday from the 60 or 70 years old Shifu (Master, like in the kungfu movies)
I never met a better human being in my life, 100% sure, like this little girl from guangxi.
probably made around 350 USD a month. Poor child. I still have her wechat contact, I will rescue her someday...
So why did you waste 10 weeks searching for a candidate, when you could have so easily trained an entry-level employee?
It seems like your firm either failed to engage suffiently talented recruiters, or possibly failed to set the compensation offered appropriately.
Before, in my whole life, I only touched high end chipshooters less than 10 times.
supply/demand
And these skinny guys from the technical focused highschools there, can spend 14 hours doing your tech stuff on the screen + 6.5 hours a day playing DOTA at a massive smoky "smoke-to-death" Lan-house or cyber cafe or whatever its called nowadays. 7 days a week, 28 days a month.
And when this one brakes you take the next one on the line. Too many people.
They are. They are:
- 37 percent have moved production out of China in the past 12 months, while 33 percent plan to move in the next 6-12 months.
https://money.usnews.com/investing/news/articles/2019-01-17/...
- Apple Is Moving Some High-End iPhone Production to India
https://www.fool.com/investing/2018/12/27/apple-is-moving-so...
- China’s Xi Jinping 'most dangerous' to free societies, says George Soros
Where are these factories moving? Poorer countries in Asia. Vietnam, Thailand, etc. It's purely a cost-saving measure, due to the rising wages in China.
Despite much wailing and gnashing of teeth about the trade war, those jobs aren't coming back to the US. If neo-liberal economics, and nationalism continues to be a popular in the United States (I predict they will be), its only a matter of time until we'll be talking about a trade war against <The new China>.
>A recent UBS China survey of 200 manufacturing companies with significant export business or supply to exporters revealed the trade war has had a negative impact on 63 percent of those businesses.
>A quarter of those affected have cut jobs, 37 percent have moved production out of China in the past 12 months, while 33 percent plan to move in the next 6-12 months.
So it's 37% of 63% of a sample of 200 particularly strongly affected businesses, not at all 37% of global CEOs/businesses as GP was leading us to believe.
shops open and go bankrupt everyday everywhere...
The U.S. labor market "began to stop having as many vocational kind of skills"
If the incentives were there, you'd have those football fields full of tool and die makers Tim.
The fact that the skills aren't there is because your company doesn't pay for them.
Even worse, it's an outright lie and people like Cook know it because they put their money behind it. Haas Automation has an entire line IN THE US producing CNC machines that get shipped to China solely for Apple. Gee, if China was so much better at those skills, why don't you buy the machines there from Chinese suppliers? Hmmmmmm?
This one is indeed lovely. Ceos....
Me too. Napoleon said that a retreat in time is a victory.
So I got out to the woods eat berries off-grid and off-borders.
And I think most people agree with Soros.me too.
In my mind the real killer has been increasing costs, China's manufacturing decline has been showing signs since 2016, and is more related to increased labour costs and increased pollution regulations. The trade war is just another final nail in the coffin. The "China conundrum" or manufacturing moving out of China has been happening for a while, its just people haven't paid much attention to it until now. The decline would have happened even without the trade war.
this decline is to grow 5% a year next 50 years?
Or is the Nuclear Armagedom?
Or is to delay a few years the chinese pretty girl landing on the dark side of the moon?
The last video was not fake, I mean, the one on the dark side of the moon.
And as long as I know the massive miles and miles long Infrastructure Integration with Pakistan, India and Russia on Railways,
Oil pipelines and wherever and whatever is going very strong, thank you for your concern.
(If there is any update and it was cancelled ,and my info is old, please correct me) (I'm hidden in the woods eat berries off-grid)
So Russia is the one who has The Proton rockets and the Avangard (NATO denomination is Snow Flake) Heads in this rockets so the Chinese are not stupid , right.
Good grief, no. It was a colorful metaphor in the industry for explaining the self-sustaining problem with meltdowns: the fuel was very dense and would naturally flow and pool together, remaining a cohesive blob even as it escaped its containiment. Other runaway reactions naturally disperse and explode, meltdowns don't. So the failure mode analysis needs to worry about what happens long after it leaves the building and hits bedrock.
It was also the title of a pretty good movie, FWIW.
Vietnam doesn't work so well with the Chinese because of their history and because the US has already been giving Vietnam a bunch of free boats [3] [4] and money.
[1] https://www.theguardian.com/cities/2018/jul/31/no-cambodia-l...
[2] https://www.washingtonpost.com/world/asia_pacific/this-cambo...
[3] https://thedefensepost.com/2018/03/29/us-gives-vietnam-6-pat...
[4] https://www.reuters.com/article/us-vietnam-usa/u-s-delivers-...
But now you go even far and mention the wild old west, yeas, those are the developments of the free market.
> 1. China has attracted many billions of dollars in investment and outright purchases from Western companies
Not Western, the West and US in particular never were the no.1 investors in China. China was at all times bad at soliciting foreign money. Claiming foreign capital as a reason for China's past growth is like claiming that electric trains are running on gasoline. Most of that growth was from internal sources. That's beyond any dispute.
> 2. Tariffs and Trade Wars – President Trump and President Xi Jinping have pushed their trade war to the brink of disaster.
China and USA can mutually embargo each other tomorrow, and it will be a just a needle prick for both. USA and China have really little economic interdependence, completely contrary to the popular opinion. Though China will fare a little bit better, as it trades in more elastic goods, and will find markets to replace the US faster.
> 3. In terms of psychological advantage, US has the upper hand (my rephrasing)
And that, the only thing that's true. Despite all of above being relatively insignificant, the US side managed to make it sound like the end of the world was coming, and even convince many people in China of that. In fact, the prime majority of recent deflationary wave in China was due to people who were closing down and panic selling businesses that were perfectly fine.
> 4. “These China-U.S. tensions are real, and it’s a long-term problem I don’t want to deal with. I want to find other suppliers in other countries and even completely move to another country for manufacturing. It’s just not worth the long-term risk anymore.”
The prime majority of China's problems are fully internal, and completely orthogonal to the trade disputes. If something will sink China, it will be its own baggage of troubles.
The populist leanings of the Trump administration perhaps may make them more receptive to this argument, because they understand these kind of nationalist and hegemonistic instincts better than neoliberal technocrats, but I think this has been a dawning realisation throughout Western policymakers over the past decade. Even the Obama administration, which was strongly neoliberal, worked hard to isolate China economically through the TPP. Trump's disdain for trade deals killed that, but his confrontation of China is really just a noisier continuation of a pre-existing US foreign policy.
Big business might have put a restraint on Western policymakers' wishes to oppose China if they'd had more success in penetrating the Chinese market. But here the Chinese government has been too defensive, and Western business leaders have realised that they simply won't be allowed to be dominate in China in any meaningful way. Meanwhile, they have watched their infrastructure get attacked and their IP stolen, and have decided enough is enough.
The goal is absolutely true, thanks for pointing out, as China has to raise its huge population.
But ... illegal? WTF ... China has been ranked as the 2nd country after US by Nature Index [1] for years, which presents research outputs by institution and country. Is it illegal??
I believe there're tons of engineers in HN. I do think that if a private enterprise in China can inject a spy program on the chip without being discovered by the most developed countries in the world for years, that should be the concern.
But the question is, why do a country with such ability still want to spy United States? That ability should be more advanced than the current US technology for decades ...
[1] https://www.natureindex.com/annual-tables/2018/country/all
Mainly because it's cheaper to let somebody else do the research and find the problems.
If you were interested in stealth aircraft technology, you might be glad to read about another country's research into Schiff base salts for paint. Or somebody else's modeling for multistatic radar aircraft detection.
It costs tons to do these sorts of things. If by spying, you could just eliminate half of the tech dev blind alleys, you've saved a lot of money and maybe time as well.
But Hackernews is probably being spread with "Guided-Stampede" , you know, It is like a stampede when all the bison run following the one before him without knowing where is heading...........
Happened in the old wester movies with the cows. If you shoot a rifle at the bovines, for example.
Or if you let a napkin fall in the ground, sometimes, and this is true.
But this Stampede is "guided" , is not spontaneous, It must be whatsapp or facebook Religious groups "Reinforced Opinion Formation" Spammed messages, if you know what I mean, Reinforced , yes.
The kinds of The Brexit, Hungary, Yellow Jacket, Brazil, you know whoever......
This is to make people believe Chinas economy is collapsing????????? !!!!!!!!!!!
Did I miss Any headline here, really???????
This style of English and syntax is very similar to what I've seen pop up on, well, any article that mentions China in a non-positive light.
These comments always try to discredit the article (or attempt to use whataboutism with the US), and coincidentally, often read like badly machine-translated English.
Are you on the planet Earth???
Logic. Please. Keep The Logic.
I said "collapse"
Where is the collapse headline? ? ?
So it cannot be a coincidence when many people have the same coincidental completely mistaken perception, "It" All Has a Commom Source. Humans are smarter then this...
They are being lead into that......
This doesn't seem like it should be legal either but the article has no issue with it, rather touts it as being good. I'm sure if the US lost economically due to allegations it would be a different story altogether.
Are you joking? China has many more restrictions on foreign competition in far less sensitive areas than their communications networks.
Setting that aside, it seems reasonable for any country to decide for any reason what they allow to be used in such core infrastructure. Any country that can afford not to depend on someone they might not completely trust now or decades in the future is foolish to do so.