Article

2005-01-17 China-Japan-Koreas

It's Just Business, Nothing Geopolitical

Archived material is restricted to Rantburg regulars and members. If you need access email fred.pruitt=at=gmail.com with your nick to be added to the members list. There is no charge to join Rantburg as a member.

Posted by Zenster 2005-01-17 2:10:28 AM|| || Front Page|| [5 views since 2007-05-07] Top

#1 And China will soon export cars to the US. Let Detroit try and compete with $100/month labor.

Posted by ed 2005-01-17 2:22:46 AM|| 2005-01-17 2:22:46 AM|| Front Page Top

#2 ed: And China will soon export cars to the US. Let Detroit try and compete with $100/month labor.

Detroit can compete, by opening plants in Southeast Asian countries that pay $300 per month, like Thailand. (Why Thailand? Because the odds are that Uncle Sam will never go to war with Thailand). Because big labor has its forearms around Detroit's throat, this will never happen, and Detroit will die slowly, instead of being able to take advantage of cheap labor abroad while harnessing American design skills.

Posted by Zhang Fei 2005-01-17 2:41:22 AM|| [http://timurileng.blogspot.com] 2005-01-17 2:41:22 AM|| Front Page Top

#3 Zenster, do you realize that every time you post an article on China, you erode my faith in democracy? Dammit man! :P

Posted by Edward Yee 2005-01-17 3:04:55 AM|| [http://edwardyee.fanworks.net] 2005-01-17 3:04:55 AM|| Front Page Top

#4 China needs secure sea lanes for its ever-rising oil imports, and like the rest of Asia, it implicitly relies on the American Navy to keep the tankers safe. And this is why they have been building and buying an enormous, deep water navy in a crash program for 20 years--so that they can protect their merchant marine. Unfortunately, it also means that they MUST have Taiwan, or their entire southern coast, and its shipping, can be neutralized. But if they do have Taiwan, they have the de facto control of the Pacific that Japan wanted in WWII.

Posted by Anonymoose 2005-01-17 9:36:11 AM|| 2005-01-17 9:36:11 AM|| Front Page Top

#5 China may buy, export, and reverse engineer, but they will never innovate. So much for a closed "commodity" society.

Posted by Captain America 2005-01-17 9:53:27 AM|| 2005-01-17 9:53:27 AM|| Front Page Top

#6 Anonymoose - Not sure that having Taiwan would give them control of the pacific. No matter how big a navy they build in the next 20 years, I think the US will have the ability to annihilate any and all merchant shipping world wide, right up to their very ports.

The reverse won't be possible. China could cause chaos, sure, but a long term naval war still ends like WW2 did for the Japanese, with their fleet sunk and US carriers and subs off their coast.

Posted by Laurence of the Rats 2005-01-17 10:06:22 AM|| [http://www.punictreachery.com/] 2005-01-17 10:06:22 AM|| Front Page Top

#7 Oh, Detroit may go down, but the US auto industry is doing fine. I'm talking those American companies like Nissan, Honda, Toyota, and Mazda. They all have plants in the US and design centers here (often Orange County). Toyota is going to be the largest automobile maker in the world within 10 years.

I really doubt that China can really compete with them. Do they have an original product? Do they have good build quality? Will their system allow them to change quickly in response to market events? Is their basic economy on a sound foundation?

Now in more stable industries, or those in which original content is very small (ripoffs of western IP), they can do well.

Posted by jackal 2005-01-17 4:39:45 PM|| [http://home.earthlink.net/~sleepyjackal/index.html] 2005-01-17 4:39:45 PM|| Front Page Top

#8 If cheap labor were the whole story we'd be buying cars made in Mexico or Brazil.

Posted by Mrs. Davis 2005-01-17 4:57:07 PM|| 2005-01-17 4:57:07 PM|| Front Page Top

#9 Well.....VW does make cars in Mexico...

Posted by Bomb-a-rama 2005-01-17 5:54:29 PM|| 2005-01-17 5:54:29 PM|| Front Page Top

#10 http://www.unm.edu/~hmuller/hybridEDIT.htm

Concurrent with this national policy shift, a change in the location of auto industry investments took place. Sites in the north became more attractive for the establishment of auto plants oriented towards greater integration with US industry. These included plants in the states of Aguascalientes (Nissan, 1985), Durango (Renault, 1982), Coahuila (GM and Chrysler, 1981), Chihuahua and Sonora (Ford, 1985).

As a result of the trend towards greater integration of the Mexican auto industry with US and international production, today, road vehicles make up the largest proportion of exports from Mexico to the US [US Department of Commerce, 1996, p. 800], and automobiles, transport equipment and auto parts make up the largest part of both imports and exports [Bank of Mexico, 1996, see Table 49]. Although Ford had only a fifth place participation in domestic sales in the Mexican market, the plant in Hermosillo placed the company at the forefront of automobile exports from Mexico. Before the plant opened in 1986, Ford did not participate in exporting automobiles from Mexico. Its CuautitlÃ¡n plant, built in 1964, served the domestic market. In its first year, the Hermosillo plant boosted Fordâs participation to 32 percent of total units exported from Mexico (163,073 units overall), and, after increasing plant capacity to 170,000 vehicles per year in 1990, the plant represented approximately 27 percent of the installed capacity for producing automobiles for export [Micheli, 1994, p. 225]. This figure illustrates the importance of the plant to Mexicoâs economic strategy of North American market integration and export-oriented growth.

Posted by ed 2005-01-17 6:34:46 PM|| 2005-01-17 6:34:46 PM|| Front Page Top