Apple supplier Foxconn to invest $1B in India, sources say | Hacker News Reader

Apple supplier Foxconn to invest $1B in India, sources say

reuters.com

268 points80mph258 comments

> With India’s labour cheaper compared with China, and the gradual expansion of its supplier base here, Apple will be able to use the country as an export hub

While there are negatives, I appreciate how globalization of manufacturing helps lift poorer economies (albeit it slowly and not always agreeing with the politics of the newly-built middle classes). One might expect manufacturing in mid-Africa in two decades.

> I appreciate how globalization of manufacturing helps lift poorer economies

I really think we have to move to a Commons-based peer production paradigm. Ask yourself, would I want to work for Foxconn assembling $1k iPhones for meager pay? [1] And I am not asking you from a hypothetical standpoint where you pretend to be an Indian in the context of the country India. My question is: would you accept a job starting work at Foxconn today, in the place where you are living?

If not, why not?

I believe the Precariat revolt is imminent.

[1] https://www.theguardian.com/technology/2017/jun/18/foxconn-l...

I work in a high paying plush job. I will also not work in fields growing crops, neither in a call center, not even in a software service company paying me meagre ₹35 lakh/a. But what doed that mean?

Is ₹35 lakh/a that bad? While it's not the top 5%, it still goes a long way, even in Tier 1 cities.

> But what does that mean?

It means that you are in the dying Salariat class.

“At the top are a plutocracy and an elite, earning rentier incomes and wielding enormous political power. Way below them, in income terms, is a salariat, a shrinking group with employment security and an extensive array of non-wage enterprise benefits such as pensions, paid holidays and medical leave.“ [1]

You write:

> I will also not work in fields growing crops, neither in a call center, not even in a software service company paying me meagre ₹35 lakh/a

Guy Standing’s got you:

“If you are in the precariat and become unemployed, and manage to obtain benefits, you face a marginal tax rate of over 80% in taking the sort of low-wage job you are likely to be offered. It may be over 100%. Then you are called rude names if you decline to take such jobs. No member of the salariat would get out of bed if faced by such tax rates, except perhaps to take to the streets to protest. But that is what politicians have forced on the precariat.“ [2]

Your comment makes sense and your view from this privileged position is common for the Salariat.

If you’re interested to explore further, I love Guy’s work in ‘Plunder of the Commons‘, as well as ‘The Corruption of Capitalism: Why Rentiers Thrive and Work Doesn’t Pay’. Looking at the future, the most compassionate vision I’ve found is described (separately) by Kevin Carson, Arthur Brock and Eric Harris-Braun. They describe an open source world through Commons-based peer production. Together with Holochain currencies (mutual credit and reputation currencies [Ceptr.org]), these things make me feel incredibly inspired and hopeful.

[1][2] https://www.weforum.org/agenda/2016/11/precariat-global-clas...

> I believe the Precariat revolt is imminent.

References article about event 10 years ago.

> While there are negatives, I appreciate how globalization of manufacturing helps lift poorer economies

Let's be real about those negatives.

It seems as though it's always just the next country in line taking it's turn to provide subsistence-wage labor. The likes of Steve Pinker may argue that living standards continue to trend upwards across the board, but it seems like people are just becoming more and more time-poor (happy to be proven wrong on this point).

If we follow this pattern, once every country has lifted itself up by the bootstraps, the end-game would not be some poorer nations providing the subsistence-wage labor, but the poor population of each country providing subsistence-wage labor. Their living standards might be much higher, but they will pay in hours, or having to give up freedoms, like living on-site at Foxxcon. Why? Because those holding power have the upper hand, and would hardly be motivated to cede their power. Replace power with capital if you want. The only possible countervailing force being collective action, say in the force of democratic institutions, and a socially-minded polity.

But eventually, automation will outcompete everyone... at this point we're then forced to resort to either welfare or artificial means of population control. It seems more humane to consider policy on population and welfare sooner rather than later, but that's just my humblest of opinions.

EDIT: Cowards who downvoted me, might you refute any of my points?

> If we follow this pattern, once every country has lifted itself up by the bootstraps, the end-game would not be some poorer nations providing the subsistence-wage labour, but the poor population of each country providing subsistence-wage labour.

Nah, it's too politically unsafe to hire cheap in your own backyard and there'll always be country-level wage gaps on the bottom end, I'm just glad they're (slowly) reducing. No need attempting to run the simulation to a hypothetical end because there either is no end or it's unpredictable (could just as easily be a rise in extreme protectionist tariffs to discourage offshoring thereby re-widening the gap).

> Nah, it's too politically unsafe to hire cheap in your own backyard

There's two options, hire overseas at a lower labor cost (lower currency/lower minimum wage), or lower the minimum wage or currency of your own economy. If the labour costs of the rest of the world increase as their economy develops, it will make sense to employ locally again.

So subsistence wage moves from overseas, back local again... and why pay more than the subsistence wage if there's no government to compel you to do so?

Edit: Keep in mind, the US is a western democracy, and the largest economy, but has plenty of people living on subsistence wages.

> could just as easily be a rise in extreme protectionist tariffs to discourage offshoring thereby re-widening the gap

Protectionism may not re-widen the gap. Many populations starve because all their arable land is used for overseas exports.

> The likes of Steve Pinker may argue that living standards continue to trend upwards across the board, but it seems like people are just becoming more and more time-poor (happy to be proven wrong on this point).

Hours per day Americans spent on leisure and sports is not trending down: https://data.bls.gov/timeseries/TUU10101AA01013585

On average it's higher now than in the early 2000s (annual survey begins in 2003). Source: https://www.bls.gov/tus/ ("ATUS Tables")

Thanks for the link.

I see also this, in wikipedia:

https://en.wikipedia.org/wiki/Working_time#Trends_over_time

It's probable that the hours have just displaced to poorer countries. Presumably the BLS data, nor the wiki graphic, have data that includes developing and underdeveloped nations.

Edit: I found a book on the topic for anyone interested

https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/@...

Edit: Page 44 in the above link shows an increase in working hours in the US (note that the 4 of the 5 other western countries compared have continued to trend down, but also have strong social welfare and working policy)

Not sure if I follow your thought process, are you suggesting that people in developing and underdeveloped nations used to have more leisure time in the past than they do now?

My thought process is that there are large populations in developing nations are so trapped in debt they can do nothing but work all their waking hours, and they would not be paid money that would permit increasing their value as a human resource.

This is a phenomenon that is happening right now, today. It's effectively the same as slavery... I'm not saying 'it used to be better', but I'm not buying the line that globalisation has removed people from being 'overworked', or being effectively slaves. Nor do I believe it ever could, without some form of government intervention.

The simple truth is, if there's a place in the world where it is possible to pay someone only to work, and nothing else, there will be a company willing to exploit that, and there will always be a country willing to exploit its population to get an economic leg-up. Even the most high-minded bleeding-heart left liberals are still unwilling to pay a few bucks extra for something that is manufactured on 'living wages'.

> if there's a place in the world where it is possible to pay someone only to work

that place is _everywhere_ on planet earth. Calling the need for somebody to work 'effective slavery' is wrong. Slavery is involuntary. work is voluntary.

You might have misread me, but I could have been clearer.

A distinction can be drawn between someone who has the benefit of a wage where they can save money, and without. If the options are, work somewhere that pays just enough to live, or perish - it's not really an option.

Let's say that someone who, in an alternate universe would have the aptitude to work as a Software Engineer in Silicon Valley, happened to be born in the poorest province in a developing nation, and the only options available were work day and night, with enough pay for food and lodging, no internet access. Is that the same as someone born in Europe, has public education, access to the internet, uses the library, becomes a developer, gets hired by FAANG... etc?

You're ignoring the reality that the alternative to having a bad job is not having a job at all. People work on their own farm and grow their own food. Nobody is forcing them off their farms. When they decide to work they do so voluntarily because nobody can take farming away from them.

You're not going to solve sweatshops by taking away people's agency. You get rid of them by providing viable alternatives.

> People work on their own farm and grow their own food.

This seems to be ignoring reality. If you're born in a locality without options to grow your own food, or don't have a farm to inherit, these aren't actually options.

And actually, a lot of poor people have been forced off their lands, when lucrative commercial interests have swayed law-makers and bureaucrats. Property rights aren't quite the same in poorer countries.

> You're not going to solve sweatshops by taking away people's agency.

Obviously.

> You get rid of them by providing viable alternatives.

I'm not sure how this fantasy become reality without protectionist government intervention, or the whole world deciding they won't buy cheaper socks because they aren't certified fair trade. I'm pretty certain which one of those two is more likely though.

The ILO studies ends in 2000 and shows a slight increase in the US near the end. Here's what happened after 2000: https://fred.stlouisfed.org/series/AVHWPEUSA065NRUG

(Note that it's not clear if decreases in worked hours are actually desirable. Some people believe many part-timers would want to work more if they could.)

Yeah, given the dips corresponding to tech crash and financial crisis, it could be more an effect of underemployment, rather than more leisure time, or less overwork. Given the relatively weak social welfare policy in the US (amongst developed nations), that would match with the narrative of social unrest in lower income brackets in recent years.

Try to avoid fitting the data to your narrative.

more hours worked = slavery

less hours worked = underemployment

Are there any measures at all that would convince you that the overall the world is better than it used to be?

> Try to avoid fitting the data to your narrative.

I made a post above that addresses your plaint I believe. I'm not being disingenuous here, I'm trying to make sense of the data. Obviously hours worked (on average), is not separable from employment figures.

> Are there any measures at all that would convince you that the overall the world is better than it used to be?

I think it's troublesome to look at economic indicators alone and make a hedonic judgement. Because when someone says, 'The world is better', I immediately think they are saying, people are 'happier'. Globalisation and technological advancement have increased the world population, as well as per-capita quality of life, and GDP. So perhaps in that 'positive-utilitarian' sense, the world is better in aggregate.

However, let's take the Chinese. They have bided their time, and now have a quality of life far exceeding their forebears. However, they can now ask for higher wages, and the value of the currency has increased, and they were losing the lower-end of the manufacturing market.. so the government found a population they could put to work for nothing - I'm sure you know what I'm talking about here.

Currently I don't see incentives for these low substinence-wage jobs going away, so I don't see how data about per-capita improvements make the reality of sweat-shops disappear. If I could see global policy shifting towards the direction of human rights, and meaningful enforcement of those human rights, that would convince me the world hasn't just reached a plateau, but can actually uplift the very bottom rung of the population.

EDIT: If there was one measure that would convince me, it would be a trend in reduction in forced-labour and sustenance-wage labour. But I couldn't find data that captures this quantity changing over time, as it's not something that could be easily surveyed, or would likely be under-reported.

Subsistence wages are set by the value of the "outside option" for workers in undeveloped countries, which is subsistence farming. As a country develops, labor productivity increases and wages rise, until companies are willing to switch to lower productivity but cheaper workers. This cycle ends once the supply of subsistence wage workers runs out.

> Subsistence wages are set by the value of the "outside option" for workers in undeveloped countries, which is subsistence farming. As a country develops, labor productivity increases and wages rise, until companies are willing to switch to lower productivity but cheaper workers. This cycle ends once the supply of subsistence wage workers runs out.

As I've said in my original post, this just means that labor force is now sourced from another country. Subsistence wages are just the minimum you can possibly pay someone, and I don't see how this will stop being a thing unless governments across the board make it so. Happy to be proven wrong about this.

The graphs for other countries are interesting too. India is in favor of the argument that hours are going up in 'poorer' countries, Brazil against. Though unemployment appears chronically worse in Brazil vs India (pre-covid)

India - significant increase https://fred.stlouisfed.org/series/AVHWPEINA065NRUG https://tradingeconomics.com/india/unemployment-rate

Brazil - significant drop https://fred.stlouisfed.org/series/AVHWPEBRA065NRUG https://tradingeconomics.com/brazil/unemployment-rate

Actually I think, the most ideal countries to expand manufacturing to are African countries, they have some of the same advantages once china had.

1. Mineral Resources. 2. Cheap Labour. 3. High Density of Lanthanide and Actinide group minerals.

China also has a fourth advantage which is a good mix of Production, Manufacturing and Electronics Engineers. Which Africa doesn't have. On the other hand India doesn't have the raw mineral resources required to do long term manufacturing. For instance India doesn't have the ideal coal quality to produce steel, India imports 90% of its Anthracite from Australia.

So the ideal situation in my view would be to setup manufacturing hub in African countries. Hire Chinese/Indian/American/Russian manufacturing Engineers and the rich mineral resources in African countries. This would fuel the growth of the world for next few decades. Though one thing to notice African countries may or may not have the rare earth metals but the probability if explored is quite high.

I understand it is 'understood' that India is typically placed higher than Africa in the hierarchy of countries, owing to the success of their emigres.

However, in reality, barring these colonial era 'Macaulay's children' (ala ICS officers who swore by the Queen} India and Africa actually have very similar development indicators.

Unless, India sorts out its colonized education system, which ultimately is geared more towards shipping labor off to other countries, and focuses on policy reforms to make industrialization sustainable without paying politicians hundreds of millions in bribes, there's actually a good chance that it'll fall behind Africa as well.

They do teach mathematics in India well though. Indian expat population is a small percentage of what's back home. India has close to 1.4 billion population. Indian diaspora in other countries would be much less than 100 million. So that disproves your theory that Indian education is geared towards exporting labor. You might've been blindsided by India IT expats living in West. That came out because of focus on IT education.

Can confirm. Once there was demand for IT because of outsourcing, everyone studied CSE and most of them didn't have interest in it, obviously. This explains the quality of work outsourced to sweatshops like Infosys and TCS.

India is a single country, with a relatively well established national identity (obviously not perfect!, but enough for people to work and live in the same area), and a relatively stable government. Most African countries are still in flux in a huge way, and are just barely starting to establish stable national identities after decades of civil war.

Kashmir, Assam, Manipur and Nagaland would like a word with you

The problem with Indian education system is that it is rote-learning focused. People do courses for sake of getting jobs and therefore everyone tries to game the system by optimizing for some metrics. It is not fundamentally geared towards shipping labour to other countries.

The proportion of Indians was never that high in the ICS even right before Independence.

The main issue anywhere is the foresight and tenacity of the political (ruling) class. They have to do things which are long term by cutting back on short term and populist decisions.

That is one thing that is holding even India back. In democratic setup it is very difficult to take a long term view particularly when that comes with short term pain - the govt would be out in next election.

Africa should learn both from countries like China, Singapore and also from countries like India.

Otherwise I do agree that Africa is well placed to be the next manufacturing hub due to its cheap labor, mineral resources, coastlines etc.

> That is one thing that is holding even India back. In democratic setup it is very difficult to take a long term view particularly when that comes with short term pain - the govt would be out in next election. Africa should learn both from countries like China, Singapore...

What do you mean, become autocratic/centralized/...or whatever other word you want to choose. That's a quick one way ticket to getting invaded and thrown out by the US government.

The US doesn't care if you're autocratic; they've propped up and outright installed plenty of dictators.

You're right, but it's an awfully useful pretense for America to invade you if you're not "democratic"

That's just been completely orthogonal. Autocrats that toe the line get to stay in power; democracies that don't get military coups.

But, I thought that the destroying property and violence doesn’t bring about democratic changes?

Or is that only when the US is tsk tsking about how other countries treats its citizens....

>What do you mean, become autocratic/centralized/...or whatever other word you want to choose. That's a quick one way ticket to getting invaded and thrown out by the US government.

The US government has no problems with autocratic governments, in fact they have propped many in the past. No, if you don't agree with them in economic terms they will invade. And there are plenty of excuses to go around, not that anyone cares anymore really. Iraq was supposed to have chemical weapons and everyone disliked Bush for that, but with Obama the US is at war in multiple countries with no visible excuse.

I am a capitalist and I think politicians just reflect the situation on the ground. If the conditions are right Market will automatically take the lead. If it hasn't happened in India yet probably the market conditions are not right and there may be few one can explore but the bottomline is mineral availability.

Just FYI, Africa is not a country. It’s the second largest continent on earth.

achow did not state that Africa was a country. achow stated that Africa should learn from countries. Nothing factually incorrect about suggesting that a continent’s worth of countries could learn something from other countries.

Actually Africa only has as much coastline as Europe despite being much larger. It has a high proportion of landlocked countries.

Technically, according to Cantor, every stretch of coastline has exactly as much as every other stretch of coastline ever.

Some infinities are larger than others.

This wouldn't be such a big deal if the landlocked countries joined an African Union or something like that.

>>That is one thing that is holding even India back. In democratic setup it is very difficult to take a long term view particularly when that comes with short term pain - the govt would be out in next election.

The one thing you can count India on is that democracy will prevail.

Any government which comes to power will always appease industrialists and investors albeit their electioneering manifesto may have been on the upliftment of the proletariat and bourgeois

Those are not in the 'top 10' things required to support an electronics manufacturing base.

Africa is the last place any electronics are going to be made, and it's completely unsuitable to their situation, at least currently.

Manufacturing any kind of electronics any scale requires a fair bit of sophistication. There is a lot of know how in putting together lines, knowing what to optimise, managing supply chains.

I just got some quotes from various parties, they all had to have intimate, Engineering level understanding of the system, they all switched out parts, recommended alterations. They sometimes use expensive gear. Factories in China have labour, but they also have educated professionals.

They rely on an entire system of sub-contractors, suppliers etc.

Even before you get to that, in Africa you have:

- The electricity grid is inconsistent. - Basic things like water supply, air conditioning systems, HVAC is inconsistent, let alone trying to support a proper clean room. - Vehicle repair and maintenance can be hard. - Internet is inconsistent - Financial system is not fully coherent, financial services for many things don't exist. - Physical infrastructure (roads, buildings) is iffy everywhere. - Huge amounts of petty theft: things left unlocked will be stolen. - Massive corruption, payments to local grafters, police, politicians. - Political climate is unstable, politicians may promise something, never happens, want a 'cut' of your business. - Legal system undeveloped, lacking in transparency, commercial courts no well understood. - Many apps and services we take for granted don't operate in Africa.

Forget the elevated level of knowledge required to staff the front-office of a real factory. Even if you could, the concept of 'employment' and 'basic level of professionalism' is not widespread. Get people to show up consistently, get them to work together, plan complicated products, communicate with individuals in a variety of nations.

Bono started a clothing line to specifically have stuff made in Africa, but even that basic textile effort did not work.

The Chinese invest in African for minerals etc. they bring in their own workers (why do they do this if African wages are lower?).

Africa is mostly very underdeveloped right across the board in the terms we understand it. They're not at the level necessary to take on basic manufacturing. Their hope will be to develop natural resources in an intelligent way, like Botswana as a great example.

I think Vietnam, Philipenes, eventually Malaysia are more likely suited for electronics manufacturing, especially because it's going to be driven by Chinese leadership. Same for India: Foxconn maybe can pull it off, because they have expansive operational knowledge, there are educated people in India even if they can't fathom yet how to do that level of work and systems are not suited to it. India does very well in software - partly because it doesn't require expansive networks or an 'industrial base', it can grow up from 'small spots' of talent, with limited dependency on the environs. You can still have a 'great software shop' surrounded by corruption and degrees of dysfunction, you can't build electronics manufacturing base like this.

Here is some data on African manufacturing [1], notice it's fairly low level stuff: plastics, beverage, chemicals, food processing etc..

[1] https://set.odi.org/wp-content/uploads/2016/04/Export-Based-...

Thats a generalisations you have to look at specific countries which are developed enough to start now and over a period of time other countries with the right mix of resources would benefit and profit aswell. My guess is countries like Kenya and South Africa are developed enough for starting manufacturing. As far as design and knowledge skill is concerned that can be hired from other countries.

This is a great comment. But I think India will force companies to manufacture locally by having heavy tariffs in key sectors/components (which involve Chinese manufacturing), to offset cheaper production costs in China. It may not be a bad strategy for any country wanting to reduce dependence on China.

I have to disagree with you on almost all points. I lived in East Africa for 20 years, and my observation of the African people was that their intelligence was similar to what you'd find anywhere in silicon valley. The problems you mentioned with financial services was solved way back in 1999 and rivals any mobile / cashless system anywhere else in the world, and that was long before things like square came out in the US. Other issues you mentioned such as electricity and water are the reason why you will find some of the most innovative people out there. Rather than complain about their inconvenient lack of opportunities, they think outside the box to achieve whatever they want to achieve. When everything is handed to you on a silver platter, that is what causes lower IQs, and when you have less and are constrained, that is what causes you to innovate. It's amazing to see what some of the makers there make, even the children, when they have very little, or practically nothing sometimes.

I don't think people are suggesting folks in Africa have a lower IQ, they're stating that they have less training an expertise (required for this type of manufacturing). I guess the big question of this is the case is how to get people there skilled up. I wonder how China did it before becoming a manufacturing juggernaut.

China had a strong and very long tradition of educating the members of its administration, which I guess counted. There was of course Mao’s Cultural Revolution that tried to wipe all that tradition off, but it failed miserably.

I love your aspirational and positive attitude.

"Other issues you mentioned such as electricity and water are the reason why you will find some of the most innovative people out there. Rather than complain about their inconvenient lack of opportunities, they think outside the box to achieve whatever they want to achieve."

I get it - if you don't have consistent electricity you 'innovate' and I admire that a lot. But I'm sorry - you're going to need consistent electricity to do many things. It's not a 'complaint'.

There's just no way around having basic infrastructure. Also - consider that a nation that cannot get consistent electricity obviously has some deep problems. So it's partly the 'lack of electricity' - but really, it's the 'problems that cause a nation to not be able to have electricity' - those are the real underlying problems.

That said, nowhere in East Africa is going to be making electronics in any capacity any time soon.

You should also consider thy on earth you would want to do that, as it's not really a natural advantage.

I live in Canada - and we don't make many electronics either! Because it's not suited to us.

Does your President/Prime Minister have political control of the Central Bank, and the large National banks, and can he use it to make massive strategic investments in certain technologies and use it for export financing?

Do you have an attractive enough economy that you can lure international investors, and then force them to hand over their IP? Do you have the depth of Engineering talent to take the plans for an advanced European rail system, copy them, make your own train system?

Do you have a malleable a population of professionals willing to work cheap, to be servile to others and say 'yes, yes, yes' no matter what, work 7 days a week and get it done no matter what? Those are strong words, but that's China for the last 30 years, working with them, they always say 'Yes', it's always cheap, and they move extremely quickly. The results are something else to talk about, but they have a very specific kind of attitude towards work, that for better or worse, works for them. They have a strong sense of nationalist vigour like right out of the 1950's.

So if you can't have enough foundational sophisticate to do electricity, let alone those things, then as you say, with an innovative attitude you can just do something other than electronics.

Much higher value and branded goods along the lines of what Africa is doing already, i.e. going 'up market' at least on some things. Exotic produce, processed, textiles, definitely tourism and of course agriculture, probably specialised.

Think of the economy like a pyramid. If you want to build higher, you have to have a wider, and more solid base. It would be a much higher ROI for any nation to establish competent civics (ie 'base') that it would to try to develop advanced foundries.

Last note: the elite in Africa is a problem, moreover, there is no 'professional class' of owners, artisans ie tradition of highly competent people doing complicated, industrious things handing down from generation to generation. Surely there was some of this, it's just adaptable to our current version of globalism.

China has had an established bureaucracy for thousands of years. So has Europe. Africa and 'mostly' South America have not, and that is the 'social pyramid' (of competency, not just power) which is necessary as well. Though there are some obvious things about that people find unfair, it's just as unavoidable.

Some of the things you said are correct. I won't dispute them but they are solvable problems.

Its not about intelligence. Its about suitability for highly complex multi-level, multi-faceted complex economic supply-chain and supplier system.

It requires good government, good laws, good enforcement of laws, good infrastructure, good stability and much more.

Other countries had this too and the made the necessary changes.

Some African nations did a good job many did not. Once they do they will see similar growth to East Asian countries or other.

Your comment seems to be unnecessarily sweeping - in the sense that Africa is not a single country, but a continent with more countries than there are US states.

As such there is an enormous range to all of your points, which, with few exceptions, are sufficiently local to make your comment meaningless.

It would be the same as sweeping generalisations about the USA that equated new York, ohio, texas and Montana as all being the same place.

Well to be fair he was replying to another sweeping comment.

  The Chinese invest in African (sic) for minerals etc. 
  they bring in their own workers (why do they do this if 
  African wages are lower?).

This.

There's a most excellent documentary on the inroads the Chinese have industrially made in Africa called Empire of Dust (2011)[1] thats eminently watchable.[2][3][4]

Even going back a decade and more, the Chinese not only brought their own machinery, trucks, heavy and light equipment of all kinds down to nuts and bolts but also their own manpower for everything but the most menial of tasks for which they employed the local populace. This shows how unreliable or qualifiedly unworthy the Chinese deemed the skilled population in their host countries & how inefficient local governments were in furnishing them with basic skills.

[1]

Empire of Dust (2011)

https://www.imdb.com/title/tt2148945/

[2]

EMPIRE OF DUST - TRAILER

https://www.youtube.com/watch?v=MkEqI3_J4xg

[3]

Empire of Dust China in Africa Mirror

https://www.youtube.com/watch?v=4LSuZGlqL34

[4]

It's all so....tiresome.

https://www.youtube.com/watch?v=W9LaHualx-s

Unemployment

Or it could be a language issue. Africa speaks Portuguese, French, English, and local languages, more or less in that order. It doesn't speak Chinese. And while many Chinese speak English, there are far fewer Chinese managers with the time or the interest to learn yet another language. (Especially not Portuguese, which is one of the hardest Euro-based languages.)

Anyway - Africa will be developed after Asia is exhausted. It will take longer, but it will happen within a few decades.

Labour is cheaper in Africa than in China. What Chinese company spend to ferry a construction worker from China to Africa is enough to pay about 10 African workers in a year. China wants to to give Chinese jobs to Chinese people. However when it comes to manufacturing of plastics and other low tech products they use Africans. Why are they not importing labour from China? I had the opportunities to work in a complex environment where some Chinese companies operate. Local workers were far knowledgeable. But these companies would not allow locals to handle their core machines, something that is not harder than playstation games. Everything is written in Chinese and locals are not trained in such language. I have the honour to have visited Western countries, and I can't remember if they have apps that are not readily available in Africa. Africa may be underdeveloped but they have reasonably educated people. They maybe lacking core skill but they are not lazy and unfocused.

Bring manufacturing to Africa would really help grow world economy and would also end this current trade war. It may not be easy but it is possible. Africa has the cheapest labour you can find anywhere, hardworking people with strong sense of confidence. Africa is closer to Europe and America than China and India. Africa has strong cultural ties already with Europe and America.

Banking services develop along with businesses, and as the economy improves every sector would improve too. China was not built over night.

I'd think container shipping is so cheap that 2 will almost always outweigh 1 and 3.

> So the ideal situation in my view would be to setup manufacturing hub in African countries. Hire Chinese/Indian/American/Russian manufacturing Engineers and the rich mineral resources in African countries.

Wow, neocolonialism much? This sort of extractive thinking is exactly the reason that countries in Africa remain some of the poorest in the world. Which companies do you think will be bringing in these foreign workers? Do you expect them to settle there?

How many counties can you name for whom bringing large numbers of foreign knowledge workers worked to build up a a strong manufacturing core (apart from maybe operation paper clip [1])?

[1] https://en.m.wikipedia.org/wiki/Operation_Paperclip

There is opportunity to be somewhere in the middle ground that can help lift the wealth of a 3rd world country. In the case of Malaysia, the country focused heavily on manufacturing for foreign entities but was structured as joint ventures with the goal to retain knowledge within the country. Many industrialised nations saw this as “protectionism” as capital flowing in without flow out as easily and you are bounded by many restrictions. However, for citizens within the country, quality of life increased because of these policies.

Thanks, that sounds like an interesting example. Do you have any links to where I can read more about the policies? When was this?

I’ll have to do some research but I can drop you an email once I find some. This was roughly around 80s and 90s. There was a vision to become a first-world nation by 2020.

Malaysia's goals backfired badly on that account. Most of the manufacturing was in Penang, dubbed the Silicon Valley of the East for a while.

Some might remember most of their chips and RAM having "Made in Malaysia" on them through the 90/00's, all from one little area.

But the country squandered the opportunity due to racial divides and the federal government's dislike of the Chinese-Malay majority on the island, a place that very much resembled Singapore's demographics and ironically tried to secede at the same time but was shot down due to the Malaysian government considering it vitally important unlike Singapore (who then went from the one of the poorest countries on Earth to the richest despite absolutely no natural resources), the years after weren't much better, they never really ever wanted it to succeed too much and consistently denied appropriate amounts of federal funding despite the population levels.

It's one of the few states in the country where a leader who isn't ethnic-Malay is legally allowed to get the job. Many don't like this situation as Malay supremacy is written into the constitution and is still deeply engrained into the national psyche. An Indian or Chinese leader makes many uncomfortable.

Fast forward a few decades and there's still a reasonable contingent of manufacturing around but advanced fabs have long left, somewhat surprisingly to more expensive shores like Taiwan, SK and China, nowadays some silicon is made elsewhere and shipped into Malaysia for assembly despite the vast amount of infrastructure, foreign skillsets and supply chains built up over 30 years. At one point long ago one third of all of the exports out of the country was cpus. Quite impressive for a SE Asian country with a large amount of natural resources.

Sandisk and some other storage manufacturers are still around but there's the feeling the island never got to see it's full potential and was never capitalized on.

The government tried to replicate this recently in a more "Malay friendly" province 20km outside of KL renamed as Cyberjaya (literally cybersuccess). It's widely mocked as a failure across the political spectrum to this day, it only ended up housing some DC's utilizing cheap coal fired power in a tropical climate and some international call centers despite huge amounts of government subsidies trying to lure in innovation.

>How many counties can you name for whom bringing large numbers of foreign knowledge workers worked to build up a a strong manufacturing core (apart from maybe operation paper clip [1])?

Singapore. If you expand your criteria for success a bit to 'advanced economy', many countries have utilized foreign labor to great effect. Saudi Arabia, Dubai and other Middle Eastern states saw signficant economic development, and the emergence of large export industries, utilizing foreign labor.

Caribbean states with economies centered around finance and tourism, and at least one African state, Botswana, with its mining industry, did the same.

I think you should add to your list political stability, infrastructures (including basic things like stable electricity supply) and a cooperative workforce.

And acceptable levels of currency risk.

"1. Mineral Resources."

This is the first time I heard this. Source that this is/was important? If it is, why not Brazil?

"2. Cheap Labour."

I am not sure that African countries are so much cheaper than India. Also, you need educated people too, something that is not available in Africa, at least not in quantities.

3. High Density of Lanthanide and Actinide group minerals.

Why is this necessary? Source?

China has:

1. Very educated people (most communist countries had the highest literacy rate)

2. A very supportive government

3. A huge market with the necessary infrastructure, starting from Universities, Airports, roads, trains...

4. Clustering of industries.

The phenomenon of China can not easily be repeated. It is nearly impossible in Africa:

1. Uneducated people

2. Tribal societies

3. Corrupt governments

4. Lack of infrastructure

Look at a map. If it is a "non-integrating gap country", it won't be the next China.

China is a great place for manufacturing which is why it succeeded. But the next place has to be surely cheaper than china. The average salaries have increased in china, but African countries do have same advantages as China. The ideal mix as I proposed could be African Resources + Chinese Engineers + Scientists etc ...

More than my answers I think you need this http://www.catb.org/~esr/faqs/smart-questions.html

Once you learn that google is one step away to find the answers to your questions.

One major advantage that China has is an insanely good transportation and logistics network. Anything you need for production, you can get in a very short time and large quantities.

I can see how population density would be a huge factor when it comes to how feasible it is to establish and develop these networks.

Even India can be at par in supple chain logistics if she puts her mind to it.

Prime Minister Modi has spoken about it in his address to the nation.

This is awesome. Can’t wait to lift multiple African nations out of poverty and have my iPhone stay at a reasonable price.

India is perfect for global economic growth in general. India has a massive population that has massive consumer needs.

However, they cannot produce everything all by themselves. Partly because of mineral resources, partly because of education and partly because of land crunch.

Which means, when they industrialize more, they need to import more.

Which aids growth of countries exporting to India.

USA used to play that role until recently but cannot take it anymore for various political and non-political reasons. If anything, most of the developed world should be very happy that India is developing the way it is because it aids their own industries.

African countries will get there some day as well, but they would do much much better by having a unified bloc like EU.

What more can i say i am from India, and I can tell you a number of Indian Industries have closed down because the rate at which we procure raw materials, Chinese can produce a finished product at that price. Almost a decade ago we had a flourishing Lock Industry, but when Chinese lock manufacturers entered the Indian market our manufacturers couldn't compete. Chinese could produce locks at a price for which we couldn't even produce steel. In a matter of years most lock manufacturers closed down. Now most distributors just import locks from China. Indian steel manufacturers started producing high grade steel for special applications to survive in the market. Because it was clear we cannot compete with china at volume pricing for low grade steel.

Are you sure that Chinese government didn't subsidize their companies?

Could be I have no way of knowing that.

I think mineral transportation cost would just be an error term in accounting for per phone build cost. This 100 gram phone costs $500.

Also cheap labour doesn't mean cheap in the overall sense. You would have to hire international workers at much higher rate, eg Emirates pays twice to pilots compared to US salaries. Also logistics of other parts will be more expensive. India is just on the verge of crossing the barrier where you could mostly do with local talent and local logistics. Africa is far from crossing that barrier.

Africa as an industrial hub would probably be better than a lot of poverty and exploitation yet somehow it breaks the usual picture of that continent :)

Better in what sense? India might be poor (not a bad thing for attracting investment) but it's stable compared to Africa. South Africa is sort of stable but not compared to India and overall there's just no reason to invest in a region where you might have all of your equipment lost or stolen. Altruistic investors might feel differently of course but by definition they care less about returns then most other investors.

Countries with incompetent governments like Argentina also routinely do weird things like nationalize companies if they are mostly owned foreign investors. It's not like Argentina is a self sufficient economic powerhouse. They have lots of problems yet they keep executing strategies that can only drag the country down.

That's was the entire idea of globalized manufacturing for the past fifty years.

Africa however will be much more difficult as a whole. But there are individual countries that will maybe be able to benefit from it some day.

For now, it's more lucrative in most cases to "receive aid" instead of "produce things". In that sense, "aid" has similar effects as natural recourses have.

It would be amazing to see economies improve, but I am really worried about the wildlife and the environment of Africa if factories move there.

A lot of people have talked about the weakness in India, but have forgotten the strengths.

Outside China, India is one of the largest single market

The long term growth rate is expected to be good

There is a countrywide GST (similar to VAT)

Uber, Amazon, Google are relatively free to be in the market, this is more liberal than in many EU countries

Add to that the younger population, surplus labour, tightening global immigration

More over India is a new unwritten partner with US, Japan, Taiwan, South Korea - there is plenty of give and take. India has concluded multi billion dollar defence deals with the US.

India has made a huge push in infrastructure investments, and building several industrial corridors

India has a strategic location in the ocean

India is the only big power in the region that can kick the CCP's ass if it has to, and the Chinese have been testing it out several times

Since the coronavirus, the state of UP (200 million population) has relaxed all labour laws that was preventing employment generation and investment, has aggregated government land for new industrial setup, twice the size of Luxembourg.

> Outside China, India is one of the largest single market

Having a large population (without purchasing power) isn't enough to call a region one of the largest single market in the world.

China and India have growing middle class but 95% of their population still have no savings, these people only spend on food and household.

The largest single market in the world is the European Economic Area, the second largest is the United States (+ Canada and Mexico), all other markets are incomparable from these two developed markets because the difference is so large.

You are very right. It is true from the value point of view and for now.

There are two other actions at play here

1. When you are buying a new car or a house in the developed world it is usually replacing an existing car or house, perhaps with a marginal increase in efficiency. In the case of India you are adding an asset which adds close to 100% value. This also applies to roads, bridges and factories.

2. The number of units sold has a significant value to the company, that is part of the success behind China. That adds economies of scale as well as a ground to innovate for the rest of the world, which is incidentally mostly price sensitive. An iPhone costs more than Rs. 100K, typical budget Android phones are around 5K that is 20x. The investments that foxconn is making is pretty small, includes equipment moved from China to diversify.

Calling the European Economic Area a single market is also a stretch. Sure from a regulatory point of view it is, but practically it’s not. Cultural and language differences between countries are often a larger barrier to your product than tariffs and legal hurdles.

> China and India have growing middle class but 95% of their population still have no savings

You have A source on this ?

What OP meant is that these are largest growing markets today and probably in the near future . people are generally interested where the growth is coming from more than where the existing spends are, especially if you are a more traditional business and not planning on disruption of a current market as a business model.

> Since the coronavirus, the state of UP (200 million population) has relaxed all labour laws that was preventing employment generation and investment, has aggregated government land for new industrial setup, twice the size of Luxembourg.

Removing laws that protected the employees will only lead to exploitation. Is this the only way to entice investors? Factories with suicide prevention nets is the last thing India needs.

https://theprint.in/india/governance/up-suspends-labour-laws...

FWIW the Foxconn factories in China that had the suicide nets had a lower incidence of suicide amongst the population working at the factory as the general population in the province in which the factory was located, even without the nets installed.

There has always been a great support for strong labour laws, whether it was helping the labourers seems to be forgotten.

It was more of a tool for bureaucracy to interfere in the private sector and of course bribery. For instance factories are required by law to provide spittoons, they need to be updated.

And the presence of these laws that force a large number of business from employing full time contracted employees. Perhaps upwards of 70% workers would benefit greatly with simplified and reasonable labour laws.

Even well meaning employers are hindered from providing proper contracts in the past.

In India, laws of supervision/control == means to acquire bribes.

The more India liberalizes, the easier it is for businesses to operate without the constant threat of corrupt government or police.

By removing old foolish labor laws, the state can build newer laws from scratch. Also more economic activity means more jobs. So even if people tend to lose or be unhappy at current jobs, they can find something else.

Let's be realistic about India's military power.

In 1999, India lost 500 men when they were ordered to charge up the Kargil mountains WWII style even though they had complete air superiority and were backed by a Bofors artillery barrage all while facing an enemy whose long supply lines consisted of men and donkeys hauling ammunition and food for miles up steep mountain sides.

What I meant is that it is the only one in the region big enough to stand up to bullying and sustain a short term war.

The Chinese withdrew from the recent conflicts only because they knew that India wouldn't back down and the Chinese would get a heavy bashing.

It would of course not have happened without the support of the Indian allies on the east coast of China and the US.

In Kargil Pakistani troops had captured all the strategic high locations, and fortified bunkers. There are some answers here, https://qr.ae/pNKfPI

> the Chinese have been testing it out several times

Are you referencing something specific?

He is referencing Dokhlam https://en.wikipedia.org/wiki/2017_China%E2%80%93India_borde... and the current Galwan Valley standoff https://en.wikipedia.org/wiki/2020_China%E2%80%93India_skirm....

How does the Chinese test the Indians by not crossing the LAC https://www.indiatoday.in/programme/news-today/video/pm-nare... specifically?

The LAC is a buffer zone where the troops patrol but do not setup camps or bring in heavy artillery.

The Chinese setup camps, brought in heavy artillery and diverted/dammed the river in the LAC. This is the region that they have been patrolling, so it is still the buffer zone.

Do you have a source?

I wonder if this will be the start of an Exodus of manufacturing away from China. Corporations are constantly under scrutiny with their brand messaging and signaling with respect to various conflicts involving China, Hong Kong and the unrest within the United States. India on the other hand, is a Democratic republic, might help alleviate some issues. If India plays its cards right, they may pave the way for a manufacturing revolution for their 1+ billion people. For better or worse, only time will tell.

I think this will depend on how much of an ally they are in the future.

If they are seen as an economic threat, like Japan in the 80s, the media will probably start to report more on the atrocities committed in Kashmir along with the new Citizenship Law that appears to target or disadvantaged Muslims.

Vietnam might he another alternative, but they are also a communist country, so the optics might not be better than China.

Believe it or not Capitalists love Communist countries as manufacturing hubs, they can circumvent labour laws, unions etc. Vietnam Is an ok destination for skilled labour but is hardly the resource heaven than China is.

It is appalling how despite the availability of information online, people still choose not to verify what they hear on the MSM. Here is the link to the Citizenship Amendment Act of 2019 on GOI website. It's only a 2 page document.

http://egazette.nic.in/WriteReadData/2019/214646.pdf

It was amended to accommodate persecuted minorities from *neighboring countries" of India. It has nothing to do with the Citizens of India.

This is blatant disinformation by omitting context. The CAA itself is discriminatory, since it does not apply to muslims, but in the context of the National Register of Citizens (https://en.wikipedia.org/wiki/National_Register_of_Citizens) it becomes even more sinister. The NRC requires people to prove their citizenship through documentation, which is very difficult for large parts of India's population, who might be straight up illiterate or lack any kind of documentation whatsoever. The CAA makes it easier for non-Muslims to claim citizenship while Muslims slip through the cracks; that is the point of contention.

> The CAA makes it easier for non-Muslims to claim citizenship while Muslims slip through the cracks; that is the point of contention.

No it doesn't. Here's the relevant part of CAA(http://egazette.nic.in/WriteReadData/2019/214646.pdf) that mentions non-Muslims

> Provided that any person belonging to Hindu, Sikh, Buddhist, Jain, Parsi or Christian community from Afghanistan, Bangladesh or Pakistan, who entered into India on or before the 31st day of December, 2014

If you are a non-Muslim who wants to get Indian citizenship under CAA, you must prove (1) you are a citizen of one of these neighboring countries and (2) you entered India before 2014. It is just not enough to not have papers to "slip through the cracks".

Dude, you literally are spreading false information and you're literally quoting one thing on one line and contradicting it on the second line.

CAA makes it easier for non Muslims. you say 'no it doesn't' and then you literaly cite this:

Yeah, it specifically mentions Hindu, SIkh Buddhist Jain Parsi Christian. It leaves out MUSLIMS.

Let's go over. the law specifically excludes Muslims.

What does it mean? it fast tracks citizenship of ALL except MUSLIMS. meaning? it excludes Muslims

now comes the NRC, in this exercise, in Assam, they asked everyone to prove their citizenship by showing their grandfather's documents or ancesteral land documents. grandmother or parents document is not valid because what if your grandparents are illegal immigrants.

your documents like voter ID was NOT A VALID DOCUMENT FOR CITIZENSHIP because you have to prove that your GRANDFATHER WAS NOT AN ILLEGAL IMMIGRANT.

Assam NRC took thousands of crores of money to undertake. Just imagine what'll happen when everyone in India is asked to prove their grandfather's citizenship.

Nationwide NRC is different from NRC for Assam.

Nationwide NRC (https://en.wikipedia.org/wiki/National_Register_of_Citizens) is mandated by 2003 Amendment of Citizenship act (https://en.wikipedia.org/wiki/Citizenship_(Amendment)_Act,_2...). Look at the definition of illegal migrants there. It doesn't mention anything about your grandfather's papers.

Assam NRC is an entirely different beast (https://en.wikipedia.org/wiki/National_Register_of_Citizens_...). This was conducted as part of 2013 Supreme Court order. The entire process and the rules was prescribed and monitored by the Supreme court of India. The definition of illegal migrant is a far more stringent here since it hinges on 1971 Bangladeshi refugee crisis and subsequent bloody protests by the Assamese people.

The protest in Assam was/is not to include muslims. But, to exclude all illegal Bangladeshi immigrants. It seems, from Assam, CAA was brought to give citizenship to the hindu Bangladeshis that were left out of the NRC conducted in Assam.

> It leaves out MUSLIMS.

All those three countries in the context have Islam as their state religion. I would always welcome Muslim refugees in India but what was the point of partition if Muslims are suffering religious oppression in countries that were created as safe heavens for Muslims? Should we undo it?

And even recent searches show that minorities (the religions covered under the CAA) are not exactly doing better in those countries.

https://www.wionews.com/afghanistan/sikh-abducted-in-afghani...

https://theprint.in/opinion/letter-from-pakistan/pakistanis-...

This is post-facto legitimization of the logic of partition.

Why shouldn't we undo partition (if possible)?

Partition doesn't need legitimization. It has been legitimate since the day both nations recognized each other.

How does citing the official source of the truth become blatant disinformation? Did you read the Act? Your comment reads more like a rhetoric than a real argument based on logic and facts.

The guidelines for a nation wide NRC have not been formulated. What you're pedaling is nothing more than a conspiracy theory

I never said guidelines have been formulated but the Modi govt has said so in SC that a country wide NRC is necessary

"Centre Tells Supreme Court NRC Necessary, Contradicts Shah's 'No NRC' Declaration"

link: https://thewire.in/government/caa-counter-affidavit-centre

I had the same mindset initially. The CAA in itself is benign. Simply reading the Act will not give you the perspective on how it is going to be implemented. The statements given by the Home Minister of India - who is also a senior member of the ruling party - will give you a better idea of the situation. The backlash due to the passing of the CAB led the Prime Minister to make multiple statements that directly contradict ones made by the Home Minister just a few months before[1]. This, along with the general attitude of senior party ministers[2] is leading the people to be (IMO rightly) concerned about the motives of the government.

[1]https://www.youtube.com/watch?v=tEfaRmQIDU4 [2]https://www.youtube.com/watch?v=MCyBL8dBOEo

> Vietnam might he another alternative, but they are also a communist country, so the optics might not be better than China.

It's already a booming manufacturing alternative center to China. It's also a center of booming tech manufacturing. Samsung has invested a huge amount of money into factories there.

Their GDP has gone from $35 billion in 2003, to $261b in 2019. They've had one of the fastest growing economies for the past decade.

US imports from Vietnam have climbed from $14b in 2010, to $30b in 2014, to $66b in 2019. 371% increase in one decade. The US imports more from Vietnam than France ($57b) or the UK ($63b) now.

US exports to Vietnam by contrast are a mere $10b, so we're pouring an epic positive trade surplus (surplus for them) into the country. The same exact way China developed. US investment is going to build Vietnam into a middle income country in the span of 20 years. We'll probably soon have nearly a $100b trade deficit with Vietnam. If they keep on the right track, they'll develop very rapidly.

The Communism isn't a problem. The US wants Vietnam to develop so it can help be another strategic counter to China. The people of Vietnam also hold the highest opinion of the US of any people of any nation.[2] The US also doesn't have to worry about Vietnam becoming a superpower competitor, so they don't pose a China-like strategic threat. They're an excellent ally accordingly, we have many shared interests.

"40 years after fall of Saigon, Vietnamese see U.S. as key ally"

[1] https://www.pewresearch.org/fact-tank/2015/04/30/vietnamese-...

"84% of Vietnamese people view the US favorably"

[2] https://www.pewresearch.org/global/2017/06/26/tarnished-amer...

And to top it all off, Vietnam forever and ever will hate China. The enemy of my enemy...

Which is kind of ironic after what the US has done to people in Vietnam. But it's similar to what happened in Japan, only Japan was under US occupation, while Vietnam was not.

Whether Vietnam (to use your example) is communist is irrelevant, in the same way it is in fact that China is nominally communist.

The 'issue' is that China is a big country so can develop to become more powerful than the US and Europe. Vietnam cannot so is not a threat and can be bullied into submission if necessary.

In fact the US is courting Vietnam for this reason and as a regional opponent to China. Clearly the political regime is not important.

There will be no 'exodus of existential consequence'.

But there will be a shift away.

China is producing a level of design and manufacture that nobody can compete with.

Other countries can take on some of the low-end stuff, but there's just a lot they will not be able to do.

China has an educated workforce that also works at very low wages, and a government bent on providing the infrastructure necessary to make it all work.

Huawei is not going to be reproduced in Vietnam for example.

Agreed. China's wages have risen steadily to the point that they are substantially higher than the competition (Vietnam, India, etc.). Yet during the same time, their share of global manufacturing has also increased. Low wages are only part of the reason for China's manufacturing dominance. A lot has to do with supply chains, industrial expertise and skilled workforce.

Maybe, but don't forget that Foxconn is Taiwanese, so there could be an idiosyncratic political angle to this, too.

One of the key reasons for manufacturers to move to India is the massive domestic market. Apple's devices have to be imported into India which attracts an import duty. Minus this tax, Apple's products would be substantially cheaper, which would help it sell a lot more units.

While India is a leader (currently #2 behind China) in units of smartphones sold, their value is only ~20 billion of the ~500 billion USD smartphone market. I don't see extra sales in the superpremium tier being a strong motivator. In India, iPhones are luxury goods, where the higher price makes them more attractive. The sort of person who can afford ~8x average monthly earnings for a phone can also afford a ~6x multiplier. (That's why iPhones are popular in movies for villains and corrupt politicians.)

iPhone price in India is one of the highest anywhere in the world because of import duties. For a country obsessed with social status and a large upper middle class with increasing disposable income, a domestically manufactured cheaper iPhone will sell enough to make a real difference in Apple’s revenues.

Apple has no intention of diluting their brand by selling the same flagship phone cheap in India or anywhere else no matter the duty, their BOM is very very cheap, they can drop their price if they want to.

The would rather sell SE , refurbs, older gen for such markets, while this is better than nothing and has some traction , a 2-3 year old tech is perhaps not as attractive when it will still cost $500 and more when better offerings are there

Import duty is in 20-30% (just got hiked to 30 this year) range , while it is substantial making it zero will not change the market significantly in Apple’s favour given the massive price difference, no mainstream phone successfully sells at the 1500 price point the way only Apple can.

After their disaster in Wisconsin I'm going to wait till they actually spend the money before considering it newsworthy.

Indeed. Those who aren't aware can read this article [1] or listen to this brilliant podcast episode from Reply All [2].

[1]: https://www.bloomberg.com/news/features/2019-02-06/inside-wi...

[2]: https://gimletmedia.com/shows/reply-all/wbhjwd/

Just because US/Wisconsin could not get it done does not mean no one can get it done.

USA had much higher costs, even outside of population centers, and too much dependence on tax shelters. It may not be the same in india.

India is notorious for barriers to entry on top of massive infrastructure deficits. There's promising policy movement in some provinces recently, but historically these initiates have not panned out. There's a reason Superpower2020 is a meme.

I mean it happened with the same company just a few months back.

Foxconn canceled $5 billion investment plan in India because of a land deal - https://www.gsmarena.com/foxconn_cancels_plans_for_5_billion...

Never do with tax breaks what you can do with tariffs.

Unlike the US, Foxconn has functioning plants in India where they are already making iPhones and Nokia devices.

This investment is not a greenfield one like in the US. It's further investment in an already successful venture. So very few chances of a Wisconsin repeat.

Its the same billion they were supposed to invest in Wisconsin.

If I were anyone relying on China right now I would diversify to other countries as fast as possible. Everyone should ask: what if I get cut off tomorrow? And have a strategy for that.

A lot of CXOs are waiting for the Biden win and hoping for storm to pass so to speak.

Which storm will pass? Don’t think Biden winning will change Xi’s or CCP’s behavior?

The good old time when businesses could enjoy hundreds of millions of cheap, educated workers won't likely be back; the political stance against CCP is bipartisan while China is seriously turning back to more planned, protective economy. Probably investing into South/Southeast Asia would be a more reasonable option for those CXO, rather than expecting Biden to solve all the structural issues lies between the West and China.

Biden just release his Build Back Better plan and it basically puts defence against Chinese espionage and predatory economic practices as a centerpiece.

I wouldn't know why, everyone if agreeing on acting against China, since HK

I don't know much of American politics, but from the outside, Trump keeps talking about 'make America great again', so why are CXOs waiting for a Biden win??

I'm sorry if this is a dumb question. I just don't understand it.

Making American Great Again is a threat to the 'capitalist' class of America, who grow their wealth by avoiding the expense of employing Americans, using American resources, or materials.

Before everyone downvotes me- I'm not saying that Trump actually follows this agenda! I'm only sayin thats the style of rhetoric he uses in his campaign.

I understand your point and it is perfectly reasonable. But Trump hasn't actually interfered in the CXOs life right? they get their massive tax cuts and all. so I thought they'd be happy with Trump.

As if Biden would magically solve all the issues with Xi's China. Too risk averse to deal with many regimes in SE Asia, these CXOs have put all their eggs in a single basket. Now the owner of that basket is abusing power and making demands.

Actually, that's how other countries are dealing with the U.S.

> If I were anyone relying on China right now I would diversify to other countries as fast as possible.

I suspect even more are asking whether they are going to be cut off from American tech.

As we increase the offshore footprint for manufacturing of devices consumed by Americans, we set ourselves up for a future where our national interests are far away, hard to defend, and subject to the whims of foreign nations. This is a strategic error.

India seems like a good counterbalance to China -- it is, after all, an adversary of China in the region. But that could change in 10 years.

Geography is important. Instead of diversifying away from our own continent, we should use the power of our consumer demand to establish high-tech manufacturing facilities in the poorer/cheaper reaches of our own continent.

We already saw the dangers of offshore production when COVID-19 hit and we were unable to provide basic necessities like patient masks and protective gowns. The lesson there is that far-away manufacturing is problematic when the global market experiences heavy shocks.

This assumes that low cost labor is the only necessary condition for an acceptable geography. Likely, it is not. Surely companies such as Apple, with their army of supply chain professionals, has given deep thought to many options, including and beyond what the armchair analysts here on HN can dream up in the 10 minutes this topic catches their fancy.

Absolutely, manufacturing requires

1. Cheap Skilled Labour (India has unskilled labour because skilled abour is expensive in India)

2. Mineral Resource (India doesn't even have anthracite deposits for steel production) leave alone oil and other minerals for manufacturing.

3. India does have a good mix of software and other Engineers.

I think the best manufacturing countries for expansion out of china are African countries which do have Unskilled labour and Mineral resources. They can hire the rest from outside.

You're not alone in this thinking. Chinese corporations have been investing heavily in Africa for quite some time now.

Ofcourse people in the game know much better than a armchair intellectual like me.

All of these things are available in spades in South America.

In reality, Apple could create a manufacturing ecosystem wherever it wants. The company has spent $100 billion on buybacks annually for several years. This year, it announced it would spend only $50 billion.

You never know who the armchair analysts are on HN, so you shouldn't judge their comments based on your own guessed perceptions of their characteristics. That's like a blind ad hominem fallacy.

But really, is the US the only market out there? Do you think Apple and Foxconn don't want to be closer to the largest markets in Asia?

Serious question: Modern manufacturing, especially for things like electronics, is highly automated and increasingly so. That implies you don't need a lot of labor to do it and what you do need is skilled labor anyway. Lower unskilled labor costs don't seem like a huge advantage there. So what's still keeping it in countries like China and India and not e.g. Minnesota, which would yield a PR advantage and lower transportation costs?

I can think of a few reasons in the nature of China devaluing their currency or other countries ignoring pollution, but these seem like illegitimate reasons. They're not a true advantage of China or India, they're perfidious regulatory arbitrage and a failure of US policy to punish cheating or impose the same environmental standards on all manufactured goods sold in the US regardless of country of origin.

So are those the only reasons (to which plausible yet unimplemented solutions exist), or is there something else we have to fix?

Regulation. It's not that easy to buy land, build a building, hire and fire people. If this is confusing, try buying some land and building a building.

Also the supply chains are all over there so the lead times and communication are vastly better.

Foxconn employs about 1.2 million workers in China. In Shenzhen and Chengdu, a combined Foxconn workforce of 500,000 provides labour for Apple Inc. Daily wage is ~$5 per employee. [https://www.facing-finance.org/en/database/cases/working-con...]

Napkin math if you were to move 500k workers to the US and paid them $100 a day instead of $5 a day it would cost you $17B a year.

Would be interesting to see how labor per unit is trending to determine if manufacturing is actually getting more automated and at what rate.

In what world do you pay a skilled American $12.50/hr? And that is before considering benefits.

You’re absolutely right, I was being unrealistically conservative. In reality that many workers would almost certainly unionize and average labor costs could easily be $250-$300 a day or more.

The main thing those numbers are telling you is that Foxconn is really big.

I think your link is also relying on data which is several years old, this is more recent and listing average hourly wages of $3.60 in China:

https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-c...

But that's still less than a third of $100/day.

The real question is whether the required number of employees is off too, which if the numbers are from years ago and the theory that automation is increasing is true then it would be, and then as you say, how that plays out in terms of labor per unit.

Here's a cynical view: a human is cheaper to "develop" and "program" than a fully automated production plant in most third world.

The main reason modern manufacturing is in (mostly south) China is the ecosystem! For electronics specifically, you have a tightly woven network of suppliers, factories, part distributors, logistics companies, and lots of local expertise tying it all together, as well as lots of established relationships and processes that keep it running smoothly. A factory, however highly automated, does not run in isolation. Of course you can build that kind of ecosystem elsewhere, but that's a 3-4 decade project and requires enormous investment at high political and financial risk (which is what China did in the 80s with the SEZs).

Foxconn is getting ahead of the curve here. They know its going to happen and so its better they do it and keep the client than letting others get in to the game.

Indian consulting companies use the same strategy. They have offices all over the world and actively go to places where the wages are low and set up shop themselves.

Well didn't foxconn managed to get Trump to paddle a shovel in Wisconsin and then managed to do almost nothing for years? India shouldn't be happy until the billion dollar is actually invested instead of promised.

Yep. I've been hearing for YEARS that Tesla is starting a gigafactory here. Unless they build one and cars are manufactured in it, I'll not trust anything.

Google was supposedly going to invest in a telecon company. It also didn't happen in real life, just in newspapers.

Google was going to invest in Jio and they were beaten to the punch by Facebook. There was some talk about investments in Airtel but no idea if that had any weight.

Someone help me understand this. If China and India get into a conflict, doesn't that mean each side would be trying to get the other's exports banned? Which means, effectively, Foxconn is handicapping itself?

India and China recently ended up at war. 20 Indian soldiers died and an undisclosed number of Chinese soldiers died during a primitive battle with Kung Fu sticks and stones. There's an agreement on not using firearms in conflicts and that has held up for some 60 years. There's no reason to believe this would be an all out war anytime soon.

Really? This deserves a post of its own!

it won't be that big. After 1962, Mao was the Chinese Primier and Nehru was Indian PM.

Right after the cuban missile crisis was solved, UK and US started dropping military equipment to help India.

Mao then did a single handed ceasefire and retreated back to the original places.

then a peace summit happened and India China decided to not indulge in a firefight at the border again.

And now China had started meddling in Indian affairs, after weeks of tensions, I don't know what Indian govt did, but tensions were de escalated.

Yes, sadly, both sides lost lives, but the thing is CCP has now claimed a Russian port of Vladivostok (I read in the news), it has claimed Bhutan, and Ladhak in India and it has always claimed Arunachal Pradesh (India)

Quick chime in regarding arms supply post cuban missile and 1962 Sino-China War: While US and UK definitely gave arms to India, they refused to supply advanced machinery and weapons. This is where the Soviets were glad to step in, and henceforth was one of the major reasons why in the latter half of the Cold War the India sort of allied with the Soviets; while the NATO block in general sided with Pakistan (whose really close ally was also China).

> There's an agreement on not using firearms in conflicts and that has held up for some 60 years.

This is the first time I heard about this and a quick search confirms it's true. Amazing!

> The Information wrote on Thursday that at least one Apple supplier has been asked to ship iPhone SE components to a facility in India starting in July

> Assembling iPhone SEs in India helps Apple to avoid a 20% tax on imported smartphones, and potentially to gain a greater foothold in the growing market. Apple earns just 2.2% of its global revenue in India

https://www.thestreet.com/investing/apple-to-move-iphone-se-...

and yet, for some reason, iPhone SE will be having the same exact cost even if they assembled in India.

Worth noting that Foxconn assembles iPhone XR in India. It also manufactures Xiaomi phones in Indian plant.

https://goo.gl/maps/GDwxEKhaBEJSs7YR7

https://www.business-standard.com/article/companies/apple-st...

I'm surprised big companies haven't built up India to make it's own type of Shenzhen there. Seems like a huge investment by any forward looking metric. They already outsource a lot of software development.

Land acquisition in India is a grand legal process going into years and property rights are individual.

This is unlike major portions of China where the CCP can simply takeover land and property is leased out by the government on long term deals.

If India truly wants to become a leader, they need to cut red tape in everything but especially in flipping of property.

That's something for the government to decide. Individual companies don't have that power.

Wisconsin says, "Hold my beer."

We just don't have the infrastructure for this.

Too much red tape. I will believe it when I see it.

Would be interesting to see the politics surrounding this in light of the recent border conflict between India and China and the Indian government's ban on 59 Chinese apps and government contracts to Chinese firms.

Sounds like a defensive move to me for both Foxconn and Apple. If the India/China spat escalates and India starts outright banning more "made in China" products, then this is plan B so they can keep selling to India.

There's a pent up demand in India for cheap iPhones. Most of the phones manufactured would be for domestic market. Local manufacturing would provide better pricing to compete with Android market in India.

somehow these global corps need to be held to a unified standard with regatds to environmental and human impact as these vary country by country.

Yes but good luck with that.

Especially since western companies/countries have profited from the exact same exploitation for so many years already.

economic localization is the only sustainable way forward

in other news, suicide rate of India has sky rocketed.

This is just stupid. If you're referring to suicides in Foxconn factories, you first need to consider the size of the workforce. The suicide rate at Foxconn factories was, at the time of the report, and is still currently significantly lower than that of the US.

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