Posted on 11/15/2005 10:40:01 AM PST by Paul Ross
This week, President Bush visits the People's Republic of China. As with all such high-level diplomatic missions, he will doubtless be tempted to accentuate the few, putatively positive aspects of the Sino-American relationship, and gloss over the increasing number of negative ones. In that happens, history may record this as a moment when the failure to speak truth to the Chinese communists condemned the two nations to conflict later.
(Excerpt) Read more at washingtontimes.com ...
But some things may provoke that premature war...Taiwan fully breaking away from any Chinese claims upon it, for instance.
Well... China recently showed Russia how great friends they are by having spies in the Russian rocket agency giving them secrets.
Maybe we could compell the Russians to beleive we're a better ally against China.
China has already stole our Manufacturing SuperPower status and sadly only a matter of time before they steal our Military SuperPower status.
I think I wouldn't call it stolen as we (those companies involved) willing sold it to them.
Director of rocket firm accused of espionage
The Guardian (UK) 11/15/05
author: Associated Press
2005 The Guardian; Source: World Reporter (TM)
The head of a rocket and space technology company linked to Russia's space agency has been arrested on espionage charges and accused of delivering sensitive technology to China in violation of state export controls, the Federal Security Service said yesterday.
Igor Reshetin, director of Tsniimash-Export, is charged with the illegal transfer of state-controlled technology to a Chinese company and with stealing 30m roubles (£600,000) through a scheme involving fake companies.
Two of his deputies are charged in connection with the alleged theft, the FSB said.
More like we priced ourselves out of that market.
We can either learn from it, or we can watch ourselves go the way of france with high unemployment.
We can't make the world stop competing with us.
Who's "We"???
I voted NO! Politically. And Economically. Every single chance I got, and whenever there was even half a choice.
The Chinese are making sure that we are left with no choices but to drink the hemlock.
Thanks, Paul, great post.
What market? They disregard wholesale all of our patents and copyrights, trademarks, everything. The whole smack. Just like the good little communists they are, and remain. You think it is an accident of price differentials that they refuse to buy anything from us? (with the exception of our raw materials, closed-up cutting edge factories boxed up and sent to Tianjin, and minimal quantities of new technology...to be copied without royalties.)
We can either learn from it, or we can watch ourselves go the way of france with high unemployment.
It is a given that the "we" of us who are making these cavalier decisions and refusing to confront reality are too invested in their mistake to reverse course. These inept policy hacks need to be fired. Both parties. Personnel is Policy.
We can't make the world stop competing with us.
Don't have to. And no one is asking for that. BUT. We can stop China. We were doing fine until we trained our own "competition" from an enemy nation, and then stopped enforcing a level economic playing field, with the defacto minimum wage standards of competing nations to protect our own middle class...and our necessary industrial base for our own military greatness.
"We can stop China."
How?
Give us all a plan of action, and how you would measure success.
We await, with baited breath, the product of your genetically superior genius!
Here is one blatant incremental step along the way for them to bridge the gap...
Aerospace Offshoring Set for Big Increase
Aviation Week & Space Technology 11/14/05
author: Joseph C. Anselmo
Aerospace lags other industries in expanding its supply base to low-cost nations such as China and India, but that's likely to change dramatically in the coming years, according to a pair of new surveys.
While aerospace suppliers in the U.S. and Western Europe are reaping the lion's share of today's business, net spending in those regions is on track to decrease as prime contractors farm out more work to reduce costs and gain entry to lucrative new markets.
That's the upshot of surveys conducted by management consulting firm PRTM and Computer Sciences Corp.'s (CSC) consulting practice in association with Aviation Week & Space Technology. Survey results are scheduled to be released this week at Aviation Week's Programs and Productivity conference.
PRTM's survey, which included interviews with senior executives at half of the 20 largest aerospace companies in the U.S. and Europe, found that little direct spending on goods and services incorporated into end products is going to Asia or Eastern Europe. But over the next three years, respondents plan to greatly increase procurements in those regions at the expense of the U.S. and Western Europe, where spending declines are expected to outpace increases (see chart). CSC's survey of more than 400 aerospace executives, in conjunction with the Aerospace Industries Assn., found a similar trend, with more than 90% of respondents planning to increase or maintain their level of offshoring in the coming year.
The survey responses reiterate that even the insular aerospace industry cannot avoid the wave of globalization that has swept over fields such as electronics, automotives and textiles. "Look at the amount of work in other industries that is shifting off shore," says Michael Goldberg, director of Bain & Co.'s aerospace consulting practice. "It's in the multibillions of dollars. It's a natural macroeconomic force."
Aerospace executives argue that they can't wall off their companies from an economy that is becoming more globally interdependent by the day. "It's very easy to say that offshoring is bad, but it can also increase market share and therefore stabilize jobs within the U.S.," says Goodrich Corp. CEO Marshall Larsen.
Goodrich has shifted more than half its production of aircraft evacuation slides to a plant in Bangalore, India, but has kept a similar facility open in Phoenix. "It's not an all-or-nothing game," Larsen maintains. Overall, "we've certainly hired a lot more people in the United States than we have elsewhere in the world."
On the other side of the argument, critics of offshoring will likely seize on one result from the CSC survey to bolster their case that greedy companies are sending jobs overseas to fatten already hefty profit margins. Just 10% of respondents said that the ability to offshore was critical to their company's success, while 41% said it was of little or no importance. "People are basically using it as a cost-reduction measure," says Pete Wiese, director of CSC's aerospace, defense and industrials consulting practice.
But companies that hope to save a few dollars by shipping work to nations with lower labor costs would be well advised to tread carefully. Many overseas regions still lack the technology, supplier networks and skilled labor pools needed to produce highly engineered aerospace components, particularly the integrated, ready-to-go systems that prime contractors are increasingly favoring over pieces and parts (AW&ST Nov. 15, 2004, p. 34).
And, unlike activities such as software programming, aerospace development often requires constant collaboration, which can be difficult if the parties are half a world apart. "There's always pressure to reduce costs and there's always a desire to expand supply base options, so it's natural to assume [contractors] are going to be looking at these options," says Douglas J. Reinart, a partner at PRTM's Asian practice. "But then reality sets in. How are they going to engage with a company in the middle of India?"
Firth Rixson, a U.K.-based metals supplier owned by the Carlyle Group, looked for a local supplier when it decided to produce seamless forged rings for aircraft engines in China. But Alan Erickson, a lead consultant to the company on the project, says Chinese expertise in rolled-ring technology was 15-20 years behind Firth Rixson's. "The leading rolled ring company we talked with uses coal to fire their heating furnaces," he says. "You can't control the temperatures from a coal fire to the tight tolerances you need in the aerospace industry."
Firth Rixson's options: transfer its technology to a Chinese supplier or build the facility on its own. The company opted for the latter, opening a 50,000-sq.-ft. plant on Nov. 4 in a duty-free industrial park a 2-hr. drive from Shanghai. The area--which allows companies to import and export components tax free so long as they are not sold within China--is attracting other aerospace suppliers and fast becoming a self-contained city, with modern infrastructure, international schools, hotels, restaurants and a library.
But while factories in China now boast such well-known nameplates as General Electric, Pratt & Whitney, Rolls-Royce, Singapore Aerospace and Smiths Group, establishing an operation there is still a challenge. "The supply chains are not yet fully linked," Erickson says. "You can acquire a hunk of metal and you can have it machined, but you go through some significant logistical challenges."
OFFSHORING IS NOTHING new to companies like Boeing, which has used it for decades to attract risk-sharing partners, capitalize on local expertise and spread work to markets where it wants to sell commercial airplanes. Cost savings have been a secondary objective.
Indeed, PRTM found that some aerospace offshoring goes to areas that don't offer rock-bottom labor costs. One of those is Japan, where suppliers have agreed to share the development costs of major programs--such as Boeing's new 787 jet--in return for a large share of future production work. Other not so inexpensive offshoring destinations include Israel and Brazil, which have expertise in aerospace technologies.
But cost is starting to become a much bigger concern. Canada-based Bombardier Aerospace, which has aircraft components built in Japan and Northern Ireland, looked for a lower-wage location when it decided to build a new aircraft structures plant. Luc Beaudoin, the company's director of strategy and business development, notes that competitor Embraer benefits from lower wages in its home country of Brazil.
After considering sites in China, India and Indonesia, Bombardier chose Queretaro, Mexico. While Beaudoin calculates the company will gain only 80% of the cost savings it would have gotten from locating in China, the Mexican factory is one time zone from Bombardier's headquarters in Montreal, making logistics easier. The plant is slated to employ 600 by the end of 2007 and ultimately will be capable of assembling aircraft, a job that is done today in Canada and the U.S.
Bombardier will be joined in Queretaro by Messier Services America, which is planning to relocate a landing gear and hydraulic component repair facility from Virginia (AW&ST Oct. 31, p. 18). Beaudoin says the Mexican government has agreed to build an aerospace trade school to train skilled workers for the cluster of companies it is hoping attract to the region, which is near Mexico City.
While Bombardier opted for Mexico, low wages and immense market potential have made China a top overseas location for other aerospace contractors. Participants in the CSC survey cited lower wages as the top reason they offshore, followed by offset credits, which are used to meet the customer's requirement for local content. China is an ideal site for both.
Offset requirements that could be passed on to customers were the main reason Firth Rixson decided to open its plant in China after looking at locations in Eastern Europe and Mexico that were closer to its U.K. and U.S. operations. "The offset content is very desirable to the big manufacturers in aerospace," says Erickson. "They want to sell their airplanes and their engines over there, and local content is what the Chinese are demanding."
Still, some analysts caution that offshoring may not occur as quickly as companies expect. PRTM's survey found that 80% of respondents plan to increase spending on integrated systems at the expense of individual parts. Low-cost nations may be ill-prepared to take on such complex work. "If you look at Eastern Europe, only a couple of those countries have built airplanes in the past," says Dirk de Waart, a partner at PRTM's operations excellence practice.
And in the near term, political concerns and U.S. export control restrictions are likely to limit most aerospace offshoring to commercial products. Defense contractors in both the U.S. and Europe fear a backlash if they contribute to China's ongoing military buildup (AW&ST Mar. 7, p. 20).
But, as U.S. military spending levels off, analysts say both the Pentagon and defense contractors are going to come under enormous pressure to cut costs, which could lead to offshoring of non-critical components. More worrisome is the prospect of U.S. defense contractors losing their technological edge.
"Just about all consumer electronics devices are now built outside the U.S.," notes PRTM's Reinart. "The volumes and the learning curves are so heavily in favor of these other regions that you're going to reach a point where these companies in the U.S. are going to have a hard time keeping up technologically. It's quite likely that our defense companies are going to have to go offshore at a certain point because that's increasingly where the expertise is."
"What market? They disregard wholesale all of our patents and copyrights, trademarks, everything. The whole smack. Just like the good little communists they are, and remain."
There is unquestionably a lot of truth to that, after all copyrights and patent laws are domestic laws supported by international treaties. However our ability to force China to respect our copyrights and patents is limited, we mainly can ban importation of items violating those patents and copyrights, which we do with considerable but far from complete success.
However, American manufacturing companies are increasingly moving thier manufacturing facilities outside the US, because it's too expensive to manufacture things here. That's not violating patents or copyright, because the patent or copyright holders are still in control of that intellectual property. The goods themselves are being manufactured elsewhere.
"It is a given that the "we" of us who are making these cavalier decisions and refusing to confront reality are too invested in their mistake to reverse course. These inept policy hacks need to be fired. Both parties. Personnel is Policy."
Huh? The reason that France has high unemployment is because their socialist policies have made it unprofitable to hire French workers, and have made it so that French workers have little encouragement to be productive.
The Unions did similar things here in the US and destroyed our manufacturing industry.
Unions aren't necessarily bad, but the policies pushed by unions in the manufacturing industry have made it so that manufacturing is not profitable in the US.
"We were doing fine until we trained our own "competition" from an enemy nation"
Huh? We've been sliding out of power in manufacturing since as long as I can remember. Japan was a major competitor in the past, but inflation in Japan has made it so that it's cheaper to build many things in the US than in Japan.
China has been building up their industrial prowess for a very long time. Their technology has been improving. The education level of their people is improving. They've made themselves a more attractive place to do business as well.
In the process, they've given their people a little more freedom, and a bit higher standard of living.
How do you propose we stop the Chineese people from being trained? Ban them from our universities? Ban our companies from doing business there?
Then they'll get training in Europe or elsewhere. Companies from Europe will do business there instead of us.
We can't stop China from becoming an industrialized nation.
"and then stopped enforcing a level economic playing field, with the defacto minimum wage standards of competing nations to protect our own middle class"
The minimum wage has harmed the poor in the US much more than it has helped. Socialist policies drag down the economy and increase unemployment. This has proven true time and time again.
".and our necessary industrial base for our own military greatness."
We do need manufacturing capacity for national security. I agree with you on that point. However, private industry isn't going to be providing it if we can't make building things in the US profitable.
If you look at history, you'll see that the government neither protects or creates the middle class. The middle class creates itself. It does so best when the government keeps out of it's way.
Still breathing? [You meant bated breath, right? Kind of a Freudian slip on your part I surmise.]
Let me guess from the snotty and juvenile acerbity of your tone, you want us to just give in? Whose side are you really on? What are you selling?
I believe in the greatness of our country, in spite of the betrayals of the last 15 years by idealogues who either profit by China or willfully see no evil there. (Are you among their number? It would appear so.)
I think we can turn it around, as measured by the trade balance, and reverse-flowing industry back to the U.S., although we will continue to have a newly emerged Chinese megalith breathing down our necks still. But we can chop them down at least two or three pegs and slow down their momentum...right now...it's called leadership and confrontation. It is not a new idea. Reagan did it to the Soviets. And he did it the right way. First the public leadership has to openly challenge the denial-complex surrounding the accomodationists (just like AA preaches to alcoholics).
As Frank Gaffney observed in the above article, "Such a review is made all the more necessary insofar as the U.S.-China Commission notes the United States lacks a "coherent strategic framework... grounded in a clear-eyed understanding of how the Chinese military and political leadership leads the country, how decisions are made and how their economy works... . China is an authoritarian regime and a nonmarket command economy still controlled by the Communist Party. The central goal of its leadership is maintaining its own power, at all costs."
It flows from this basic insight that we must be concerned about such developments as:
The persistent assertion by the Chinese leadership to their political cadre and military officers that America is the "main enemy" and that war with the United States is "inevitable."
Then you need to thoroughly embrace a set of policy changes that effectively reverses previous bad behavior. (Please read, if you are at all a serious person, the late Dr. Constantine C. Menges, in his final work, a bequest to the land he loved, and hoped to protect, China-The Gathering Threat (2005). Some of my suggestions would be as follows:
(1) Immediate, and complete revocation of ALL MFN TRADING STATUS. NOW. And any other nations who have similarly pegged their wages (not not currencies per se, that is only an auxilary necessary manipulation pursuant to wage manipulation)...too low.
(2) REVOKE ALL STUDENT VISAS FROM CHINA AND TAIWAN, AND CHINESE NATIONALS FROM TERTIARY NATIONS who are involved in scientific and engineering technical studies of any kind. Only those who wish to seek asylum from persecution will be allowed to remain on a case-by-case basis.
(3) ALL CHINESE FRONT COMPANIES OPERATING WITHIN U.S. TERRITORIES BE DISSOLVED. All Chinese agents declared Personna Non Grata, and expelled.
(4) Further Western FDI into China by Western Companies Immediately Banned.
(5) The President must also, even before issuing the public challenge, Issue all necessary secret commands by Executive Order by virtue of his position as Commander In Chief to prepare the U.S. for a number of possible "asymmetrical" Chinese sneak attacks...one of the most likely being an EMP barrage from Arab registry container ships off our shores.
(6) A comprehensive PR attack on the COMMUNIST REGIME and its legitimacy in China, and the phoniness of its revisionist history attacks against the U.S. which has been a big part of the downturn of the U.S. acceptance around the Globe.
(7) A call to freedom for the oppressed masses of Chinese. Open appeals for their freedom, and defenses of liberty must be made at the highest levels, before all Church groups and councils of freedom. No deals with China until progress is made on freedoms. Period. Reagan ALWAYS got the Soviets to release prisoners of conscience before he would meet with them.
(8) Underground freedom movements aided directly by covert actions to blow the Chinese Regime apart from within. Meanwhile publicly decry all religious persecution, and "imperialistic" communist national aggression against the captive peoples of Tibet, Xinjiang, and Hong Kong, and the threatened peoples of Taiwan, the Phillipines, and the whole of Southeast Asia.
(9) Re-Arm and rebolster a new set of security arrangements with the nations surrounding the Chinese Communist regime and its Axis.
(10) Restore U.S. national security preparations (re-prioritizing U.S. only purchasing) with appropriate expenditures and policy-recognition for two-front warfare, and an indefinite but possibly imminent pre-emptive attack on our power projection forces...naval and air assets.
(11) Begin Deploying Brilliant Pebbles SDI ASAP and develop counterstrategies and weaponry to police space against Chinese Mini-satellite ASATs.
Enacting these policies would be a painful, wrenching process, but one that is essential if we are to prevail. I believe that we could see the Chi-Comms overwhelmed and collapse within eight years if these policies are vigorously pursued faithfully, and the Chinese agents and moles are sufficiently weeded out of their sinecures within various political, foreign and commercial policy apparatus, not to mention national security entities. The Chi-comms are cavalierly murdering people by the hundreds of thousands today (2 million in the Laogai) and oppressing countly hundreds of millions...not to say a billion and change....and threatening their neighbors and the globe. Time to put these rabid dogs under.
Yes, of course. That is the global environment...but it is far from natural. That is primarily because of the existence of the intentionally and consciously-designed parasitic Chinese labor supply, kept by the Commmunist masters at world-beating low prices. They also keep their currency rigidly pegged to enforce this economic black hole operation. Many of the Pacific Rim and "Tigers" are also pegging their currency to the dollar in lock step with China, to avoid losing all their business to China. If China was removed from the equation, then tney would be free to rapidly inflate and would do so. They did so after China's 2% increase in the Yuan. China is the anchor weighing down everyone else's income.
We can't stop China from becoming an industrialized nation
We can slow them down, and reverse the reverse brain drain. Their technical class will attempt to flee as they stagnate.
Thanks for the ping!
Thanks Paul. I'll come back.
My breath's baited; I just ate a sausage, bell pepper, and anchovy pizza. :)
"Let me guess from the snotty and juvenile acerbity of your tone, you want us to just give in?"
No, you said there was a way to beat China; you sort of neglected to tell us what it was.
"I believe in the greatness of our country, in spite of the betrayals of the last 15 years by idealogues who either profit by China or willfully see no evil there. (Are you among their number? It would appear so.)"
Ah, the joy of the Internet. I'll bet--since no one's given you a Hindu beauty mark yet--that you don't throw those insults around like that in face-to-face discourse...
By the way, pinging a bunch of your other screen names is kind of silly.
Is this another bash Wal-Mart thread?
The minimum wage has harmed the poor in the US much more than it has helped. Socialist policies drag down the economy and increase unemployment. This has proven true time and time again.
This latter response of yours deserves some clarification of what I was thinly alluding to by "minimum wage". I was alluding to the tariff regimen that kept wages in the "the First World" from being collapsed by third world wages. There was no explicit U.S. imposed wage requirement. But if we deemed the playing field to be fundamentally unfair, usually as a result of a despotic government such as China's we denied them MFN status. That immediately triggers the Smoot-Hawley tariff...but only against a malefactor so branded.
And I have to ask you, since you are convinced of the following: "Socialist policies drag down the economy and increase unemployment. This has proven true time and time again. "
Why is Communist China succeeding at the trade war? (And don't contend that they are some sort of hybrid and are really neo-capitalist...its not true). I also am no fan of socialist policies. No Hamiltonian economist would call tariffs which undergird a policy of national industrial development...socialist.
Furthermore, I favor switching from truly socialist, nay COMMUNIST policies such as Income Taxes, Corporate Income Taxes, and Capital Gains Taxes, to a general revenue tariff, and a national sales tax instead. The numbers add up. It can work. And it would have profound impacts to the good at redressing the trade imbalance, excess consumption, and deficient savings rates, and restoring industrial competitiveness....more or less across the board. Time to get busy, and push for real change, not the penny-ante policies of the RINOs.
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