Posted on 06/23/2023 4:09:05 AM PDT by FarCenter
With the current geopolitical challenges between China and the United States, as well as the ongoing supply chain issues affecting manufacturers and consumers, there’s been much talk about moving global manufacturing out of China.
But despite the talk, US-China trade reached a record level in 2022, with no signs of any slowing in the near future.
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We interviewed Joseph Eiger, our former student and an executive in a global sourcing company that manufactures consumer products, about how the world of manufacturing operates.
Consider the case of making a baseball cap, for example. Some baseball caps are very basic, while others are more complicated and involve embroidery and more expensive fabrics. As Eiger put it: “While producing baseball caps is not the same as producing a cell phone, it’s still pretty complex.”
China’s manufacturing industry has access to a high level of agglomeration economies — or ecosystem. Take the example of producing a hoodie. It’s not just about the textiles needed to cut and sew into a hoodie. It is also about the trims, dyes, zippers, cords and other necessary pieces that are required for assembling the product, Eiger explained.
China has deployed a strategy that ensures the entire manufacturing supply chain is located there, and has mastered each step of the process. China even imports and processes much of the world’s wool and cotton, including a significant amount of US-grown cotton that comprises approximately 35 per cent of the world total.
This cotton is then processed, made into fabric, dyed and sewn into clothing and other products. They are then exported globally, including back to the US as finished goods. The entire textile ecosystem for production is located in China. And this is not just the case for fabric, it’s also the case for all of the components.
If a retailer in the US or Canada wanted to move the production of the textiles it sells out of China, it would have to move the entire ecosystem with it. Either that, or the retailer would need to source the inputs needed from China into other countries like Bangladesh, where final production would take place.
Costs are too high
It turns out that the costs associated with leaving China are simply too high. As long as the ecosystem for manufactured goods remains in China, then so will its significant share of the world’s manufacturing.
Will there be a tipping point when companies will relocate production out of China? It is unlikely that conditions will suddenly switch anytime soon in favor of other countries.
In the coming years, as manufacturing sectors in other Asian countries emerge and develop their own ecosystems, the economic case to move production out of China will grow as well. But this is some years away.
allegedly, almost all USA sex toys are made in China
Why? Because the Uniparty oligarchs still make more money on MCGA than MAGA. Just check out the position of their MCGA hired gun.
The U.S. had that for most of the prior century and as a result was able to put that onto a wartime footing very quickly. The logistics of turning out weapons of war and delivering them to the front line against two enemies who were far ahead of us in the buildup of their own war machines was how we won WWII.
WWIII? Advantage - china.
All that used to be done in the US. It should be again.
LOL. Who did THAT research?
For about the last 35 years K Street/DC and Wall Street have sold out Main Street to China. It really is that simple.
This is pure globalist propaganda to kill the American working class and to weaken USA's self reliance. This is a matter of national security.
As for costs to the consumer, what are the costs per unit? We don't buy in quantity, we buy in small amounts and if a "widget" is made in the USA the nominal increase in cost would be tiny to the end consumer. If every thing was made here in the USA things would be about 8-9% higher on average. This would be a one time adjustment in labor costs. Welfare spendng would decrease dramatically. Tax revenue would shoot up.
Yes. We basically exported the whole manufacturing environment to China. There was time, when moving to China was the thing to do for any company. Now, we are stuck with China as sole supplier!
BTW, When they got the monopoly in some area, they raised the prices, so even the price is not good anymore, but they have us by the ball’s.
How could we let that happened?!
China sends some manufacturing to lower cost Countries like Vietnam.
Everything is fluid as Globalists chase low cost Countries and “farm labour”
The Globalists want to destroy the US, not build it up
I remember all too well their argument on why we need to pass NAFTA ND GATT... “But but but if we raise their economy they will start buying from us!!”
I always replied that once they have our manufacturing ability, they won’t need us...
And here we are...
A small across the board import tariff of 10% would more than offset the difference in labor costs between the USA and the 3rd world.
some guy i met who worked as a manager for a sex toy store
You make some good points there. To which I’d add, regulations of all sorts stifle American businesses.
This is something Congress can change with the wave of a hand. But of course they won’t.
China has deployed a strategy that ensures the entire manufacturing supply chain is located there, and has mastered each step of the process. China even imports and processes much of the world’s wool and cotton, including a significant amount of US-grown cotton that comprises approximately 35 per cent of the world total. This cotton is then processed, made into fabric, dyed and sewn into clothing and other products. They are then exported globally, including back to the US as finished goods. The entire textile ecosystem for production is located in China. And this is not just the case for fabric, it’s also the case for all of the components. If a retailer in the US or Canada wanted to move the production of the textiles it sells out of China, it would have to move the entire ecosystem with it. Either that, or the retailer would need to source the inputs needed from China into other countries like Bangladesh, where final production would take place. Costs are too high It turns out that the costs associated with leaving China are simply too high.That sums it up. What used to be seen here, like as in WW2 production, is now seen in China. Which also would much applied to war time production (How ridiculous was American production in World War 2? [images at link]), which in a protracted war the US cannot and is not willing to ensure it will be able to match.
I’m guessing that Hillary and her “assistant” Huma Abedin had something to do with it.
(Was that wrong? Should I have not said that?)
The so called globalists will be confined to a country that will become as much a backwater as Spain was after their empire collapsed. If China or Russia destroys key cities like New York and Washington, they may lose their political power base. If American dollar hegemony ends, they will not have their financial power base.
For some reason I can't seem to ge upset over the thought of this happening.
Greed. The same thing that caused us to sell the materials to Japan so they could build their war machine. Our merchant class has no soul.
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