You mean all the moaning about Japan, Inc? Yeah, I recall the scaremongering. I seem to recall Al Gore heading that up. Seems like he moved on to another Big Scare that is flopping, too.
Where is Japan, today, after the Lost Decade? Why would a nation set its interest rates at 0% for ten years if it was so successful?
And what about the Hikikomori - many of whom are PG and AS? Japan has kicked its most unique people to the curb. Is that smart? This is a huge and lost opportunity for Japan (and the world) that can never be recovered.
Furthermore, the Japanese auto manufacturers understood the trajectory of their costs and they in-shored the assembly and much of the parts processes to the US. Why would it not be smart for US firms to do the same thing?
The only advantage China has is labor costs and the fact that they way underestimate future costs. This, too, will change, as it did for Japan and as it has for Korea and in Taiwan.
I never said the Chinese stuff was junk. They make some great stuff. But intellectual theft is rampant. They also undercut price and then later realize they made a mistake as they have to provide support and maintenance. They either then raise the price to cover costs or cut corners. If they do the latter, then staff leave and the product suffers.
The US and others talked China into something they will come to regret - being the sweatshop of the world. They have huge hidden lifecyle costs that are coming due and will come due as time goes along. And as a result the cost advantage will dwindle while the other cost drivers such as flexibility, transportation, coordination - stay fixed or become more important. And emerging nations in Africa will have lower costs in terms of labor and distance to market, andmore Western values, so plants can be moved or built anew.
I'm not impressed. They should have driven a harder bargain and grew more slowly.
Let's see what happens to China's emerging asset and commodity bubble in the next six months. And the soon to be worthless US dollars they have stockpiled.
I think the Chinese have been snookered.
Hi Austin,
You must be a little young. In the middle 80s, I was heading up the automobile group for a major investment bank. There was a time that everything you wrote about could have been said about the Japanese. When I was a kid, if it was Made in Japan it was junk. Amazing what was done in two decades. And what was even more remarkable was what Korea did in one decade with quality.
You sited some examples and I have heard them too but they are isolated, otherwise the trade deficit wouldn't be so f---ing big. The math tells all and little anecdotes don't add up to anything on world trade. The US imports a great deal from China and it grows. And when they wanted planes from Boeing, which is our largest exporter, they made them build them there. And Boeing agreed.
So you can pretend that your universe is real but I will bet you that your reality will burst within two years.
Ren
