U.S. Manufacturing costs are almost as low as China’s • Hacker News Board

Re: U.S. Manufacturing costs are almost as low as China’s

#141

Post by chrischen » Mon, Jun 29, 2015, 5:03 AM UTC

CamperBob2 wrote: post #115

adventured wrote: post #34

Earlier quoted context omitted.

American entrepreneurs are the best thing that has happened to China in centuries. If it weren't for American capital, and the American consumer, China would have developed drastically slower (if at all). China's GDP per capita in 1994 was ~$480. That's ~45 years after the Mao revolution. There was no alternative than to pay them cheap wages to start. If you paid them 'first world' wages, nobody would have set up man…

I tend to agree with you, but note that the opposing arguments aren't entirely invalid. Think of how many Africans were better off as slaves in the antebellum South than living as free men and women back home. Did that justify slavery?

There's a fundamental difference since the slaves didn't choose to be slaves, even if better off.

The Chinese factory workers are choosing from the options provided. From their perspective they've been given a better option. From a western first world perspective, people here can't seem to relate to how $3/hr could possibly be a better option, but it is. Over here we have the benefit of minimum wage, welfare, higher standard of living, etc. Unfortunately it is a very egocentric viewpoint to not think of this from the perspective of an actual factory worker.

Re: U.S. Manufacturing costs are almost as low as China’s

#142

Post by kelukelugames » Mon, Jun 29, 2015, 5:18 AM UTC

jblow wrote: post #72

hifromsz wrote: post #61

Earlier quoted context omitted.

I'm not sure you would be as quick to sarcasm if you spent some time in Chinese factories. It's a though life, even in the good ones. As the purchaser you have a lot of power over the process, not just at one factory, but in which factory you choose. To me that also means you have a responsibility. The least anyone working with Chinese companies should do, is to go and look at the factories.

Yes, it's a tough life, but people actually pick that life because other options are tougher (for example being a rural farmer somewhere). It is true that we should care about conditions in factories such as these and work to improve them. It's also true that if you insisted that Chinese workers get paid what American workers would, there would have been almost no factories and the entire country would still be in de…

It's weird to hear you say insisting on one angle does not help anyone.

Re: U.S. Manufacturing costs are almost as low as China’s

#143

Post by hackuser » Mon, Jun 29, 2015, 5:42 AM UTC

adventured wrote: post #34

feelslikefelt wrote: post #28

Earlier quoted context omitted.

I agree with him. In this case, American entrepreneurs are abusing Chinese people. It's a human rights issue. It's an issue that China has been criticized for a very long time over. http://www.nytimes.com/2013/06/12/world/asia/man-details-ris... or even http://www.wsj.com/articles/chinas-tech-factories-turn-to-st... This isn't a "well suck it up because at least you're getting paid /something/" issue. Chinese workers…

American entrepreneurs are the best thing that has happened to China in centuries. If it weren't for American capital, and the American consumer, China would have developed drastically slower (if at all). China's GDP per capita in 1994 was ~$480. That's ~45 years after the Mao revolution. There was no alternative than to pay them cheap wages to start. If you paid them 'first world' wages, nobody would have set up man…

> American entrepreneurs are the best thing that has happened to China in centuries.

American business is a significant reason China was so poor to start with. To understand China, I recommend reading what is meant by the 'century of humiliation'.

> There was no alternative than to pay them cheap wages to start.

They can pay less than American-level wages, and yet still pay a living wage and provide safe, reasonable working conditions.

> the primary exploiters of cheap Chinese labor, are the 200 Chinese billionaires

That someone else does wrong doesn't justify doing it yourself. Otherwise, everyone's standard is whatever the worst do.

Re: U.S. Manufacturing costs are almost as low as China’s

#144

Post by hackuser » Mon, Jun 29, 2015, 5:55 AM UTC

mjfl wrote: post #22

chinathrow wrote: post #17

Earlier quoted context omitted.

I am neither US nor chinese but I know that 3$/h is not a rate I wish anyone these days. Anywhere. Simple, eh?

China is technically communist right? Shouldn't they be being taken care of by the state anyways? edit: This is an honest question.

> China is technically communist right? Shouldn't they be being taken care of by the state anyways?

They are not actually communist; they are an authoritarian state controlling a capitalist economy. They started down that path in the late 1970s under Deng Xiaopeng.

Before that, the state did a very poor job caring for its citizens. Millions died of starvation, persecution, and other ills. Look up the Great Leap Forward and Cultural Revolution, two government programs, as examples.

After that, probably never in the history of humanity have so many in a time and place escaped poverty as those who have in China. However, the country is so large that there are still many that are very poor.

Re: U.S. Manufacturing costs are almost as low as China’s

#145

Post by _delirium » Mon, Jun 29, 2015, 6:31 AM UTC

dba7dba wrote: post #71

bobjordan wrote: post #54

Shenzhen China factory owner here. The costs are definitely rising in China for English speaking technical labor such as the engineers we need. We compete with companies like Apple and all the other foreign companies rushing to China these days to keep them employed. But we are still talking much lower salaries overall, for example, $30,000 USD/year for a degreed Sr. Electrical design engineer with 20 years experienc…

Parts maker. It's something people forget about. Britain for a time was the premier plane/jet developer and manufacturing center after WW2. Like the Comet. And that helped a lot of parts makers (like Rolls-Royce jet engine) for planes grow in UK. Even when UK lost the crown of biggest jet maker to Boeing, those parts makers in Britain are still around and thriving. So it's more disturbing to me that you can't find su…

The U.S. has a pretty big parts industry, but it varies a lot by sector. It's quite strong in heavy machinery, for example, where domestic suppliers have a majority marketshare in both the market for the machinery itself, and the parts used for building and maintaining said machinery (and the tooling for the machines that build those machines... etc.).

There are various ways to slice it, but if you take the broad sector of "machinery and equipment" as defined by the U.S. Department of Commerce, domestic suppliers have about a 60% share of the U.S. market overall: http://selectusa.commerce.gov/industry-snapshots/machinery-a...

Re: U.S. Manufacturing costs are almost as low as China’s

#146

Post by mikerichards » Mon, Jun 29, 2015, 7:09 AM UTC

bobjordan wrote: post #54

Shenzhen China factory owner here. The costs are definitely rising in China for English speaking technical labor such as the engineers we need. We compete with companies like Apple and all the other foreign companies rushing to China these days to keep them employed. But we are still talking much lower salaries overall, for example, $30,000 USD/year for a degreed Sr. Electrical design engineer with 20 years experienc…

It sounds like this is how its supposed to happen. Now if the leftists would get this fixed pie ideology out of their ass we could move on to greater things like we've already done in the last 20 years.

Re: U.S. Manufacturing costs are almost as low as China’s

#147

Post by zaroth » Mon, Jun 29, 2015, 7:16 AM UTC

kristofferR wrote: post #36

pjc50 wrote: post #33

Earlier quoted context omitted.

Export post from China is heavily subsidised.

Mostly by the postal services in the recipient country actually: "If you buy the cheap goods from abroad today, you can often get them shipped "free" around half the planet and to your home. It may be cheaper to order a remote control with batteries from China and throw the remote away, rather than going to the store and buying a pack of batteries. That this may be a problem for local businesses is obvious, but the r…

Thank you so much for that. I guess this is basically why I am able to order LED bulbs from China on eBay which are better quality and about 1/2 to 1/4th the cost of a locally purchased bulb, plus they come with free shipping.

I had no idea how they could possibly have shipped them to me, in just about 10 days time, when the cost of the bulb seemed lower than the cost of the shipping. So I guess this is another reason why USPS is bankrupt, because they are legally obligated to deliver the parcel, basically for free, after a few cents were paid in China to put a stamp on it. Amazing!

Re: U.S. Manufacturing costs are almost as low as China’s

#148

Post by icelancer » Mon, Jun 29, 2015, 7:21 AM UTC

caublestone wrote: post #138

bobjordan wrote: post #86

Earlier quoted context omitted.

Generally, most favorable terms my company gives are 30% down and balance before shipment from China. Of course everything is negotiable and if I really want to do a job then we'll accept more risk.

U.S. Manufactures have access to capital such that they extend net 30 terms. That impact on our working capital is tremendous and outweighs the percentage cost savings.

My Chinese supplier extends net 90. But only because I've paid upfront so many times. It's not different over there, but you're not getting net 30 if you're an unknown person.

Re: U.S. Manufacturing costs are almost as low as China’s

#149

Post by icelancer » Mon, Jun 29, 2015, 7:23 AM UTC

sien wrote: post #60

This has been predicted for a while. This has been said as early as 2010 and possibly even before that by about 2015 costs would equalize. In 2013 there was an article in The Economist on this: http://www.economist.com/news/special-report/21569570-growin... Here is a key quote from the article: "BCG used to argue that companies unwilling to send their manufacturing to lower-cost countries were putting their very futu…

This was discussed at the turn of the century when outsourcing was the wave of the future. Economists and manufacturing experts knew that in-house stuff would have a large place regardless of what occurred with massive offshore work.

We've seen it at my business. Chinese suppliers crush American ones on low-skilled goods but we pay top dollar for intermediaries and local stuff when we can. Scaling is the real key of Chinese manufacturing, though. Cost we can negotiate on and play around with, but speed and scaling? Chinese factories crush the Americans in my line of work.

Re: U.S. Manufacturing costs are almost as low as China’s

#150

Post by icelancer » Mon, Jun 29, 2015, 7:25 AM UTC

SiVal wrote: post #47

rjdagost wrote: post #13

For some industries the USA is and has for some time been a bit lower cost for manufacturing than China. Labor costs are only part of the equation- you also have to take into account transportation costs, energy costs, costs of obtaining capital, etc. all weighed against political, scheduling, and quality risks. For my own industry (specialty machine vision systems) outsourcing to China is almost not worth the troubl…

You left out the biggest cost of all: technology theft. The Chinese government wants its manufacturers to watch for technologies that could be of economic or military value and to pass them on to relevant Chinese organizations for use. When the local Party leader's son starts producing your "specialty machine vision systems" in his factory down the road, are you going to go to the Party-controlled court and sue him?…

>You left out the biggest cost of all: technology theft.

Absolutely. The factories I deal with OPENLY DISCLOSE what contracts they have (not price, but brands) with other companies in my line of business. This is unbelievable. I didn't even ask for this information - and never would want it, given the implications - but they VOLUNTEERED it as part of their sales pitch.

And what are those companies - many of them multimillion dollar entities - going to do about it? Switch factories? Certainly not file a lawsuit. It's crazy.