It’s a huge misunderstanding that the competitive advantage of China is cost of human resource, otherwise Tesla should build super factory in India or South Asia countries.
- Tim Cook, Apple: https://www.inc.com/glenn-leibowitz/apple-ceo-tim-cook-this-...
Tim Cook points out that many believe it’s about labor costs, and that’s largely a matter of arrogance in my opinion. Many of us don’t even realize how few of us here can actually make the stuff we design. Even if we could afford our own labor, we couldn’t find the people to pay to do it anyway. How will we compete?
I’m actually curious if anyone knows what the solution to this is. It worries me quite a bit. I don’t see a bright future for North America because we can’t manufacture so many things and I think it’s going to eventually bite us very hard.
It took Japan and South Korea several decades to develop a reputation for automotive quality, and many still swear off the quality of South Korean cars in particular.
The reason China has electronics supply chain skills is that for decades they've had massive foreign investment as companies outsource productions and do knowledge transfer through JVs (joint ventures).
For future industries this won't be the case (as its politically unpalatable and China is ageing quickly). The primacy China has in the electronics supply chain is already diminishing.
- It is huge, with lots of resources inside China. China also controls Tibet, non populated and with lots of natural resources.
- Population density is enormous. Some cities in the tens of millions of citizens, lots of cities in the millions.
- Very good communications by rivers and channels and also the sea with the rest of the world.
- Environmental laws are a joke there. Rule of law does not exist like in the West. In the West caring for the environment make things more expensive. In China you just trow away waste.
If they're going to do an "agile" design, which seems to be the Tesla model (they seem to be much less about model year iterations than some brands), that could be a big deal.