Putting Countries in Perspective

Submitted by fyl on 12 October, 2008 - 16:18.
The following story was sent to me by a friend. He is also a NL member and can take credit for it if he wishes. While it is about China (and the U.S.), I wanted to put it here to discuss. A lot of the article is background and then there is one part which I have put in blue which I want to discuss a point.
I went shopping today with my Chinese wife and her Chinese friend. We were shopping for gifts for my wife's family back in China, and we were looking for gifts for a 72 year old father, 50 year old sister, 45 year old brother, spouses, and numerous kids from 3 to 15 years. So we were looking for pretty much everything for boys, girls, men, women, and all age groups. I was planning on dropping around $600 to $1000 today. After spending 3 hours on Sixth Street in Grants Pass, and finding nothing suitable, we went over to the WalMart Superstore. BIG MISTAKE! If you thought we were not going to find anything on Main Street USA, you can be guaranteed that at WalMart VIRTUALLY EVERYTHING WE SAW WAS ALREADY MADE IN CHINA, AND COULD BE BOUGHT IN CHINA MUCH CHEAPER when she arrives there on Oct 27th.

I came to the sad realization while shopping with these two Chinese women that we in the US don't have a whole lot to bring to the table anymore. We Americans DO NOT HAVE ANYTHING THE CHINESE WANT, yet we are buying everything from them, already. Even tools you buy to fix your Asian cars at Harbor Freight are virtually all going to be made in China.

The Chinese own us, and it is only going to get worse!

And yet, all Chinese want to leave China as rapidly as possible, for the US. The reason: they think it is like in the movies they see. The reality, that we USians all know: It Ain't!

But the other, really valid reason, is that we still have a few freedoms left here that they do not. Namely, the FREEDOM OF SPEECH.

I also watched a documentary on China's history with my wife last night. When it got to 1949, when the Communists took over, I began to rail against them and how bad communism was. My wife was astounded. She said no way. Communism was good. I said what could possibly be good about Communism. Her answer was brilliant in its simplicity: before the communists, my family had nothing to eat. And her family was upper crust.

Now, anyone under 40 in China is probably a lot LESS a Communist than any of you reading this. My "shopping trip" today drove that point home if I had not already known it from being there in 2005, where all the younger Chinese were more electronically connected and gamed out than I ever have been.

Is "the U.S. as seen on TV" what makes the Chinese want to move to the U.S.? That is, they think if they can move to the U.S. they will have 2.3 wives, a great high-paying job and so forth? I don't know but, if this is their reasoning it also could be the reasoning behind Nicaraguans moving to the U.S.

Looking at another point, will the news of the U.S. economic meltdown help counter the TV image of living in the U.S.?

Finally, why is it that China has become this amazing producer nation while Nicaragua, with the exception of its Chinese sweatshops (with are really Taiwanese) seems to just follow the current U.S. trend of buying everything from China?

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here's a great visual aid to putting things in perspective

Submitted by arlington on 13 October, 2008 - 14:46.

http://show.mappingworlds.com

Not that I found it revelatory but, it is shocking when you look at military spending and children not in school.

In a world of fakes

Submitted by mjt on 13 October, 2008 - 10:39.

When dealing with Chinese manufacturers or competing with them it is not really possible to separate the creation of an in-country product with the likelihood that "it" wont be illegally copied and undercut (usually in terms of quality and also in terms of price - and no margin appears too small). While this used to be the domain of expensive items (everything from computer software to a set of encyclopedias, high-end electronics to car parts, jewelry to recorded music, etc.) Chinese manufacturers now are willing to pirate virtually anything, including products costing as little as $0.09 to make. I can't find the link to the 9-cent article, but a recent survey by Business Week ("Chinese Counterfeiters Thrive in Africa") features a $0.20 toothbrush and $0.35 shoe polish. Enforcement of illegal products isn't all that much better in some C.A. countries than it is in some African countries (in fact, after similar problems in Honduras, Kiwi funded polishing kiosks, park features, and rewards information on fake polish). If a product made in C.A. was truly successful, and the maker not tied to a government family, it might well be the target fake-product makers, which might be an added incentive for not trying/investing. In a world of fakes and little protection, when the average buyer has relatively little money, the incentive is to make a cheap crappy product, and the Chinese surely own that market.

http://www.businessweek.com/magazine/content/08_33/b4096062676521.htm

Are there choices

Submitted by fyl on 13 October, 2008 - 12:11.

What you say totally makes sense. Anyone trying to compete for the bottom will eventually get there. But, are there alternatives where Nicaragua could be successful?

Here are some thoughts:

  • Something perishable can get to at least Western Hemisphere markets quicker from Nicaragua than from China.
  • While shipping has been cheap, large or heavy items that require quick transport should be able to compete in local markets.
  • If a product needs phone or on-line customer support, Nicaragua is a better place time-wise than China for markets in the Western Hemisphere. Also, Spanish skills are a plus for most of the Western Hemisphere including a lot of the U.S.
  • Are there some high-end markets where Nicaragua has specific resources or skills to compete? One resource that comes to mind is fresh water.

While I don't see a magic bullet, I do think that there are some possibilities. For example, Nicaragua is in a good position to offer both geothermal energy and wind energy to the region.

China

Submitted by mjt on 12 October, 2008 - 19:49.

While we [U.S.] might not make products found in Chinese department stores (if anyone thinks the Chinese-made crap found in U.S. department stores is pretty bad, wait until one closely examines the Chinese-made crap found in Chinese department stores), in 2007 China became the 3rd largest U.S. export market - a market that might rank higher shortly after any alteration in the high-tech export regulations the U.S. maintains toward China.

Though just a generalization, I am not sure it is completely accurate to say all Chinese want to leave China for the U.S. In fact, often, it seems Chinese want to leave China for any capitalist country, period. Here in Honduras there is a never ending influx of Chinese people, just as there is at least one visa-passport scandal involving Honduran government employees and the Chinese community. When you ask a Chinese person if they like it in Honduras [or Peru, Bolivia, Panama - basically anywhere I have ever been], the answer isn't necessarily a resounding "yes", but more like, "...at least it isn't China...". While all of these people might have preferred the U.S., they were quick to settle for any place not China. None of the Chinese people I have ever met were under any delusion as to what life would be like in a Central American country, nor what it would be like in the U.S. For the most part, people make the trip after family members have already done so, and the close family contacts insure fairly accurate information. While some emigration to the U.S. might be based on a television model, I don't see that per the Chinese - at least not those who have actually left China.

Per production, no country like Nicaragua (or Honduras, El Salvador, etc.) will cease to be an almost total China-consumer until it is possible to make the things they current import from China. Pick almost any product someone with a job might aspire to own and might be able to save to buy: coffee maker, bicycle, blender, portable radio, television, motor scooter, whatever. How hard is it for someone start a Nicaraguan company and start making these things in Nicaragua? Answer is, really hard (would the parts or components all be imported?), but the second question is the one that matters more: How could someone make the thing and undercut the price of the current Chinese imports? Answer, in most cases, is that it simply would not be possible, and no one is eager to invest in something that is not likely possible.

I think you just explained

Submitted by marnica on 12 October, 2008 - 23:15.

I think you just explained why Canada has lost over 400,000 mfg. jobs in the last few years and why Canadian and Us companies are now pulling out of Mexico and Nicaragua. Simple, the almighty buck. As long as they, the corporate bad boys can exploit the people and it doesn’t matter where they come from Nicaragua, Canada, US., China. They will and with no guilt. Just a smile all the way to the bank. You can count on it. All it takes is only pennies on the dollar difference for them to pack up and walk out of Canada. Just imagine how easy it is to do business with China where the labor and material differences are huge. At the same time Nicaragua has not the resources or the infrastructure to even contemplate being in the game not for a long long time anyway and if you ask me it's a loosing game. It just is not a level playing field. I guess if we wait long enough for all of China to catch up to us or for us to fall back to their level then maybe they can send work our way. Think about. Leaning Spanish is tough enough. How’s your Chinese?