Posted on 05/27/2007 6:40:37 PM PDT by TigerLikesRooster
Ping!
More competition for the sector that the US is trying to target.
WOW I didn’t know about this Tiger
Really
A lot. In return, they will get screwed royally in the end. Let them feel cocky now.
China / Korea ping
While I hope you are right, I don't see how this would happen. Could you please explain?
A massive stock bubble currently forming inside China, their badly corrupt financial system, and adverse effect of undervalued currency(invites currency speculation) lead to an unhappy ending. As for stock bubble, these days Chinese media features kiddy stock whiz in an elementary school who made bundle from his stock investment. This is an episode akin to shoeshine boy giving stock tips to Joseph Kennedy.
Comparing China to Japan is difficult.
Explain your point a bit further please. The artificial manipulation of the Chinese government’s currency has nothing to do with this?
People have been talking about this since the mid-90s. Most of the "shakers and movers" doing business in China have been planning their next move in Asia for years...
The currency changes (9% compared to the USD so far), and policy changes in the country, are making it more competitive while improving opportunities for local corporations thus creating a level playing field.
No longer do Chinese employees choose a foreign company to work for as a first option. There are a few local companies that have implemented very good business practices and could be considered world class.
However, on the flip side, there are still many years yet before business should be completely abandoned as they write in the article. A company needs to fully understand how to do business in China, and the tools necessary to be successful. In fact, there are still opportunities in the western part of China where the government is promoting growth.
The areas that are affected by increasing wages and cost are the giant super-cities along the east-coast where good employees are becoming more difficult to find. This is because there is always another company willing to pay more for their talent, driving up the cost for labor... The cost for services and materials are also driven upwards because of the increased demand in those cities.
The main reason those companies shut down, or are in the red, is because of poor management and bad planning.
Samsung is not moving to Vietnam because of the Chinese market conditions, but they are opening a new plant in Vietnam because of the opportunity for business in Vietnam and neighboring countries.
You don't understand. Foreign companies, especially smaller ones, incur many hidden costs, while Chinese companies with connections would do better. Besides, labor cost is rising because so much cash flow into China, and it is also creating huge bubbles in financial and housing market. This is in large part due to artificially undervalued Chinese currency.
China is also facing the same problem as S. Korean companies do. Their advantage of cheap labor is diminishing while other social costs are rising. Even though they may not face the problem now, they will soon do so.
The only way to take advantage of the situation is to understand the market and its dynamics. Only then can we always be one step ahead. Didn't Sun-tzu write something along those same lines?
The main reason those companies shut down, or are in the red, is because of poor management and bad planning.
You can always say that. Well-managed company can even survive world-wide economic depression, for sure. Still, the exodus of such company relfects worsening business condition in China.
I heard that Samsung's new plant in Viet Nam will service Europe and other areas. It may service S.E. Asia, but it is only a part of it.
There could be more opportunities deep inside China. However, as export hub, they may not meet the requirement of many foreign companies.
You are pro China manipulating it’s currency? Yes or No?
From what I see, there are no indications of an exodus, however one company's decision to relocate. The reasons for this move can be numerous, but in my experience, the larger companies will retain a portion of their production in different areas.
Therefore, the final product being shipped to Europe will have one component made in the Phillipines, one made in Malaysia, one made in Singapore, one made in China, one made in Japan, and finally assembled in Vietnam and put on a container for Germany.
This is how costs are kept down and all their eggs aren't kept in one basket...
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