Posted on 10/17/2022 4:57:34 PM PDT by SeekAndFind
China is losing its influence; it’s in decline. At the same time, however, China, ruled by a despotic regime, is responsible for 28.7 percent of global manufacturing output (more than 10 percentage points ahead of its No. 1 rival, the United States). This utter dependence on China for manufacturing must be stopped. As I write this, three countries are working to siphon customers away from China. Will their efforts prove to be successful?
I speak from experience when I say the following: communist China is not a fun place to live in. Moreover, with its frequent power cuts and the Chinese Communist Party’s (CCP) obsession with “zero -COVID” policies, it’s not a fun place to do business in, either. Such an obsession with eradicating a borderline-endemic disease is not conducive to a healthy society; in fact, it borders on the pathological.
The CCP’s utter blindness is not lost on major companies like Apple, Google, and Samsung. The three tech giants are moving more of their operations to Vietnam, home to the fastest-growing economy in Asia and one of the fastest-growing economies in the world.
Vietnam seems to offer a considerably more favorable environment to big businesses fed up with China’s constant lockdowns and production disruptions.
As the author Govi Snell recently reported, due to its cheap labor and close proximity to China, Vietnam is attracting an increasing number of renowned businesses. Greg Poling, director of the Southeast Asia program at the Center for Strategic and International Studies (CSIS), told Snell that many of these businesses no longer see a future in China. Between the trade war with the United States, rising labor costs, and the complete failure of supply chains during COVID, said Poling, the CCP’s “zero-COVID” policy should be viewed as the straw that broke the camel’s back.
China’s loss is Vietnam’s gain. Take Foxconn, for example, a Taiwan-headquartered manufacturer of smartphones for Apple. The company recently signed a $300 million contract with Kinh Bac City, a Vietnamese corporation, to expand its facility in Hanoi, a city located in the north of the country.
The move could prove to be monumental, considering Foxconn—a company that has done so much of its business in China—is exploring the possibility of entering the world of semiconductor manufacturing.
Apple recently announced plans to shift more of its production away from China and into India. Interestingly, Foxconn is currently manufacturing Apple’s latest phone, the iPhone14, at its factory in Chennai, located in eastern India. Like Vietnam, India is home to a rapidly-expanding economy. Set to become the most populated country in the world very soon, India has aspirations of becoming a worldwide manufacturing hub by the end of the decade. Such aspirations appear to be rooted in reality. Last year, India ranked second in the Global Manufacturing Index, leapfrogging the United States.
Another country with dreams of becoming a manufacturing hub of genuine significance is Mexico. In July, the author Jeremy Bliss asked, somewhat rhetorically, why Mexico? He then laid out several reasons why companies, especially those based in the United States, should seriously consider moving their operations to Mexico.
In addition to its “optimal location along the US’s southern border,” he wrote, Mexico offers “convenient access to North America, as well as Atlantic and Pacific trade routes.” Indeed, it does. Moreover, when comparing Mexico’s cost of labor and transportation fees with other manufacturing hubs, the North American nation offers a very favorable environment. For these reasons, noted Bliss, “Mexico can connect businesses to more than one billion consumers and 60% of the world’s GDP.” This explains why so many companies—including BMW, Nissan, Honda, Audi, Daimler, Mazda, and Toyota—have moved a large portion of their operations to Mexico or are building new assembly plants there.
You undoubtedly noticed that all seven of these companies are foreign automakers. They are attracted to Mexico because of the country’s highly-skilled workforce, low energy costs, and free-trade agreements. The IMMEX program, which was signed into effect in 2006, allows foreign companies to conduct full operations in Mexico with low-tax structures and significantly reduced labor costs.
This brings us back to the title of this short piece, can any of these countries replace China as the world’s factory? To many, the question seems utterly ridiculous. But it really shouldn’t. If enough companies turn away from China and direct their business elsewhere, the world can gradually become less reliant on China. This won’t be easy and will take some time—but it can be done.
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.
Oh BS. A small tariff will even the playing field and create ecnonmic prosperity here. You want balanced budgets? The you want tariffs and industry.
To the end consumer that is insignificant and equates to a few pennies on the dollar.
Tariffs are good.
horse sh1t.
You can’t be that f-ing stupid? So according to you a made in the USA a widget costs $20 and made in the 3rd world $5? LOL. You are saying per widget, the cost of labor is $15 of per US made widget? So it takes 1 hour to make one $20 widget? Where the F did you go to school?
Ask the mods to pull your post, reason? Pure stupidity...
According to the BLS only 7% of the US manufacturing work force is in a union. Yesterdays war. Hey old farts, it’s not 1975!!!
“According to the BLS only 7% of the US manufacturing work force is in a union. Yesterdays war. Hey old farts, it’s not 1975!!!”
Good, then getting rid of that 7% won’t be a problem!
Good then rapatriating industry wiil be overwhelmingly non union. Old fart, listen up it is not 1975....
“Good then rapatriating industry wiil be overwhelmingly non union. Old fart, listen up it is not 1975.”
Yep, sounds like a deal - get rid of unions and repatriate the manufacturing jobs!
If there are only 7% union in the USA then you don’t have to completely elimnate them. You have some kinf of mid 20th century form of union derangement syndrome.
You build one pipe bomb in your basement and the Feds are all over your ass. You build a virus that could kill 200 + million and the feds are no where...
> You are saying per widget, the cost of labor is $15 of per US made widget? <
No. It’s the cost of labor, plus the regulatory costs, plus the taxes, plus the insurance costs, plus a dozen other things. American industry is hamstrung by almost too many things to count.
I am quite familiar with your posts. You favor tariffs to help bring industry back to America. If you’d care to check, you would see that I agree with you completely. A nation without industry is helpless.
My point - and I stand behind it - is that it business leaders are not the main villains here. Local, state, and federal governments have arranged things such that many American goods are no longer price-competitive with foreign goods.
This has got to change. And that change has to start in DC.
Since I’m in a typing mood, permit me add something to my post #52. It is something I have mentioned before.
A few years ago I was watching a news story about an American company that made door locks for cars. The company owner was very upset. He said that the Chinese had entered the market, and were selling door locks for less than it took for his company to make them.
The Chinese locks weren’t as good as the American ones. But they were good enough. So the owner had only two options. Either go bankrupt or move his production to China. He hated that he had to make that decision. And he was almost crying because he saw his employees as family.
I don’t know I what the owner ended up doing. But if he moved production, he’s not the bad guy. The bad guy is the one who let the Chinese locks enter the American market.
“You have some kinf of mid 20th century form of union derangement syndrome.”
Correct, spent many years having to deal with them. They need to go, they serve NO PURPOSE that isn’t covered by labor laws.
You’re living in the past, 100 years plus in the past.
Or, if you did, your product would be ridiculously expensive. Because our government is a financial vampire.
As I said get rid of the killing manufacturing production regulations and increase energy production
Fire most of the EPA.
I have no free trade illusions and know that stable jobs for the entire working population is the best path to stability and a functioning society
Yep. Stop making as much disposable plastic stuff, too.
In a word tariffs.
Fed government overregulation, corporate taxes, unreliable energy supply, CIA coordinated antifa brownshirts, race riots, dindunuffins running wild, corrupt justice, corrupt DAs, and fat, spoiled millennials who don't want to work. How are those for starters?
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