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China Hardware Technology

The Coming Decline of 'Made In China' 327

retroworks writes: Adam Minter documents the move of Chinese steel mills to Africa, and speculates that China's years of incredible rates of economic growth may already be over. This one steel mill's move to Africa, by itself, increases Africa's production by two-thirds. "The officials in Hebei Province who oversee the company may have felt they had no choice. First, they undoubtedly faced political pressure to reduce their environmental impact in China: reducing production of steel, cement and glass -- all highly polluting industries, especially in developing countries -- will have a direct impact on Xi Jinping’s pollution goals. (Starting in Hebei will have the added benefit of cleaning up polluted, neighboring Beijing.) Second, Hebei may simply be at a loss as to how to scale back businesses that they recognize have become massively bloated. Officials in China’s construction-related industries clearly have too much capacity and too little demand." It's also possible that these moves will be encouraged by China's transition to clean economy, though that could be a bad thing for pollution in Africa.
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The Coming Decline of 'Made In China'

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  • What Will They Do... (Score:5, Interesting)

    by MightyMartian ( 840721 ) on Wednesday December 31, 2014 @12:44PM (#48705291) Journal

    And what will all our fine corporate interests do when they run out of wage slaves?

    • by koan ( 80826 ) on Wednesday December 31, 2014 @12:47PM (#48705317)

      Robots.

      Besides with 7.5 billion humans and growing I doubt "wage slaves" will ever run out.

      The answer to every human problem? Population control.

    • by PeterM from Berkeley ( 15510 ) <petermardahl@yahoo.NETBSDcom minus bsd> on Wednesday December 31, 2014 @12:51PM (#48705347) Journal

      Haven't you heard? Manufacturing is coming back to America, bigtime. It's just coming back automated. Relatively few jobs are coming back with the manufacturing.

      Hate to sound like a luddite, but what's a person to do for a job? Farming is automated, manufacturing is automated, even service industry jobs are becoming automated (self checkout at grocery stores, robotic stocking, brick and mortar retail dying out in favor of Amazon). Driving/shipping jobs are going to be automated.

      And there just isn't much economic demand for lots of engineers and scientists and artists--a few of each can serve the entire planet and thus everyone who labors is trying to "supply" a few jobs with little demand for labor. And we can't all just doctor/nurse and sue each other. I don't see us making money entertaining each other either, there have to be people who can afford and pay for entertainment. Wages are going to crash, then what?

      -PM

      • If we don't have jobs because there's no more productive work to do, then we could, at least theoretically, live lives of leisure and self-improvement. For the remainder of jobs that do need human labor, we might adjsut schedules to that having something like George Jetson's 'grueling' 1 hour a day, 2 days a week job is the norm.
        • by hodet ( 620484 ) on Wednesday December 31, 2014 @01:28PM (#48705657)

          Just requires the obscenely rich to share their wealth.

          • by lgw ( 121541 ) on Wednesday December 31, 2014 @02:49PM (#48706411) Journal

            All of the wealth in America, including all corporate assets, all retirement plans, and all home equity, is less than $350k [usdebtclock.org] per citizen. That won't solve much. Even if you distributed it, most people would be broke in a year - wealth is a habit more than anything else.

            In the long run, we benefit far more from wise investment decisions than from redistribution, because economic growth is exponential growth, and redistribution is a one-time constant. 95% of Americans live better than 99% of everyone who has ever lived. The median income in America is far more than the $30k or so that makes you a "1%er" of the world. Exponential growth per capita comes from technological progress, and there's no reason to believe technology will stop progressing.

            Are the currently wealthy the best as making investment decisions? No, of course it's not optimal, but it's not terrible either. The entire premise of Capitalism is that you buy wealth, rather than being gifted it for loyalty to the leader or military conquest, so the better you invest your wealth, the more you can accumulate. That's a good thing when it works out that way!

            • Re: (Score:3, Insightful)

              by drinkypoo ( 153816 )

              All of the wealth in America, including all corporate assets, all retirement plans, and all home equity, is less than $350k per citizen. That won't solve much.

              Stop letting people sneak it out of the country legally, which you can only do if you have scads of money.

              The entire premise of Capitalism is that you buy wealth, rather than being gifted it for loyalty to the leader or military conquest, so the better you invest your wealth, the more you can accumulate. That's a good thing when it works out that way!

              Yeah. Only it hasn't worked that way in a long time. Once you get enough money to buy legislation, the game board is tilted.

        • by khallow ( 566160 )

          If we don't have jobs because there's no more productive work to do, then we could, at least theoretically, live lives of leisure and self-improvement.

          "IF". We already know, from a casual glance at the world outside of the developed world, that there is plenty of productive work to do.

          • If we don't have jobs then we don't have money. No money means we don't buy anything. (I suppose we could have a subsistance/barter economy) No buying means the corporations go broke. (They still pay taxes so automation won't eliminate their costs) Bankrupt corporations means the Government nationalizes everything. (Yay! Entitlement society means free stuff!) Government can't run everything without money, so they conscript workers. (Communist Russia, here we come)
      • Automation increases the demand for engineers and scientists. Those technologies don't just appear or are supported out of thin air.

        The jobs being replaced by automation are mundane repetitive jobs - work that is demeaning for a human anyways. The problem impeding the rise of automation is that surplus humans are just cheaper robots.

      • Re: (Score:3, Insightful)

        by gurps_npc ( 621217 )
        I disagree strongly. The main thing you don't understand is that people create jobs, not the other way around. Jobs are not a set supply to be divided up among the lucky few.

        Instead, jobs are defined by work that people want to do. The more things we want done, the more jobs get created. We haven't run out of things to do, we've just taken care of the emergency stuff. There is a lot of new things we could do, so there are a lot of new jobs we can create.

        When people automate jobs away, they decide t

        • by Billly Gates ( 198444 ) on Wednesday December 31, 2014 @01:31PM (#48705683) Journal

          Wrong. Jobs are created by demand. Not the other way around. Look at thr great depression as proof? With no demand due to lack of funding led to no jobs which led back to a lack of demand in a 15 year loop.

          • Re: (Score:2, Flamebait)

            by roman_mir ( 125474 )

            Wrong. Jobs are created by people coming up with ideas for new businesses based on new products and best product ideas come from people trying to solve their own problems in life.

            Saying that demand creates jobs is fine, when the jobs in question are in very well understood industries, but it is wrong even then, because all new supply brings down prices even further and creates more choices. So in reality SUPPLY creates new demand, because the bigger the supply, the lower the prices.

            If TVs cost 1000USD per

          • Your argument is seriously flawed. Among other things demand did not suddenly disappear or re-appear.

            Moreover, demand is a psychological thing. By your argument we can simply create more demand by education.

            The main thing you misunderstand is that I was talking big picture and long term, in response to someone with a big picture/long term question. Short term there are lots of things that interfere with people getting jobs - education, fear, etc.

            You also mentioned 'lack of funding', which is the oppos

        • jobs are defined by work that people want to do.

          Jobs are defined by work that people with money don't want to do.

          When people automate jobs away, they decide to do more work, creating new jobs.

          Or, more tasks to automate. Which creates a few more jobs, yes, but not many.

          • The entire process is a feedback loop with a delay built in. This delay causes the problems we call unemployment and depression, but the feedback loop eventually fixes them.

            Automate X frees up people Y to do task Z. Task Z starts getting done (eventually - after people figure out it is the next thing to do and learn how to do it), Bit not just Z. When Z is done, AA needs to be done, then AB then ACIt isn't one task to automate it is a BILLION tasks to automate. A billion jobs that we don't even try

            • The entire process is a feedback loop with a delay built in. This delay causes the problems we call unemployment and depression, but the feedback loop eventually fixes them.

              Yes, that's the idea.

              The amount of work that needs to be done is mindbogglingly. We don't do it because it is so big, and not as important as feeding each other. Things like genetic research, space research, policing polluting factories, rescuing abandoned animals, etc. etc. etc. etc.

              The first three of those things are all things which in the USA in particular are actually prevented by government, in one way or another. Take policing polluting factories. I know someone who used to get paid by the government (EPA IIRC) to climb stacks and probe them for emissions. He told me that everything he ever sampled was over the limits, and that they can find stacks over the limit as quick as they can pay people to sample them. But what happens next? A handslap, a fine that do

        • by Sir_Eptishous ( 873977 ) on Wednesday December 31, 2014 @02:50PM (#48706419)

          The main thing you don't understand is that people create jobs, not the other way around.

          I don't know about that, I'm sure there have been quite a few(ahem...) jobs that have created people...

      • by tom229 ( 1640685 ) on Wednesday December 31, 2014 @01:32PM (#48705689)
        Technicians are going to be needed to service the machines. Anyone who grew up in an area influenced by the car industry will tell you that. We all started training to be technicians and millwrights years ago.
        • Technicians are going to be needed to service the machines. Anyone who grew up in an area influenced by the car industry will tell you that. We all started training to be technicians and millwrights years ago.

          Service revenues on automobiles are in the toilet because they're designed for much longer warranty periods today, and there are less mechanics than ever. Anyone familiar with the car industry will tell you that.

          The trend in electronics is towards more modularity, and it won't be long before the robots are repairing one another with regularity.

      • Hate to sound like a luddite, but what's a person to do for a job?

        You sound like a Luddite. Employment is rising, not falling. We have been automating jobs out of existence for centuries, and living standards have risen, not fallen. Incomes have risen the most in countries that have automated the most. There is no sign that any of these trends have changed, much less reversed. Rising productivity does not cause poverty. It causes prosperity. In fact, it is the ONLY thing that causes prosperity.

        • You sound like a Luddite. Employment is rising, not falling.

          According to official numbers the Civilian Employment-Population Ratio for the US peaked in 2000 and has been trending downwards ever since. Were you talking about some other kind of employment?

      • by sjbe ( 173966 ) on Wednesday December 31, 2014 @02:28PM (#48706247)

        Haven't you heard? Manufacturing is coming back to America, bigtime. It's just coming back automated. Relatively few jobs are coming back with the manufacturing.

        Hate to break it to you but manufacturing never left America. Ever. It's a popular meme to claim that the USA doesn't make anything anymore but it is not and never was ever true. The US manufacturing sector, by itself today if it were a country, would be one of the ten largest economies in the world by GDP. The only country with a manufacturing sector of similar size is China and by dollar value they are roughly the same size to within a percentage point or two. And China has only caught up in the last few years despite having 5X the population. China does a lot of the labor intensive [wikipedia.org] manufacturing and the US does a lot of the capital intensive [wikipedia.org] manufacturing. That proportion will change over time as wages change in both the US and China as well as in other places.

        You are correct that the relatively proportion of jobs in certain types of manufacturing is going to fall similar to how it did for farming. But this is not a doomsday scenario. It means that labor pool is now available to do something else that previously was not possible. If we all still had to work on a farm then the internet would probably have never come about. If you use people to do what a robot can do, then you are necessarily wasting resources by not utilizing people to their fullest capability.

        Hate to sound like a luddite, but what's a person to do for a job?

        The exact same question has been asked at the start of every technology advancement and the answer is the same as it has always been. Something different. Probably something you are having a hard time even imagining right now. As an example you're complaining that we shouldn't have accounting software because it took labor and thus jobs out of accounting. Would you seriously argue that computers have eliminated jobs because we need fewer secretaries now? It's an absurd argument because it presumes that the amount of economically valuable work out there is fixed and not growing or growing too slowly.

        Farming is automated, manufacturing is automated, even service industry jobs are becoming automated

        Umm, there is PLENTY of valuable work that cannot be economically automated. I run a manufacturing company that does assembly work. There is NO automation that can economically replace what we do and none likely within my working lifetime. Not because the technology doesn't exist but because humans are more flexible and economic in plenty of circumstances. Automation is useful but the limits on it are economic rather than technical in most cases. If you need a small quantity of something produced, it is difficult or even impossible to economically automate that in most cases. Same with creative work. Same with complicated work. For automation to replace all people you will have to develop a robot or other automation that is as capable as a person AND less costly. We are no where close to that occurring.

        Wages may not be inflated like they've gotten in the US in the last 50 years but that doesn't mean there won't be any work anymore. It just will be different than it was and some places (like the US) may experience a reversion to the mean on wages. I know that uncertainty is scary but the notion that automation is going to eliminate all jobs is just ridiculous.

        • Right, however you miss some critical parts of the "American Manufacturing Renaissance" meme that is so popular lately.
          What are they, you say?

          You mean I have to spell it out for you?
          Ok then.

          Sure, there are manufacturing jobs in the US, some that never went away, others that are new. Here is the catch, they employ a smaller amount of people, much, much smaller than they used to. These newer manufacturing jobs are usually of a technical nature, with much training involved and the innate need for e
      • And there just isn't much economic demand for lots of engineers and scientists and artists....Wages are going to crash, then what?

        Maybe humanity will finally be motivated to figure out that mass economic stability and security comes from serving each other instead of rigidly serving the self, because serving others is enlightened self interest.

        One can hope.

      • by zmooc ( 33175 )

        Some time ago I researched long-term trends in employment by sector in the Netherlands. Employment in all sectors is declining except for few: entertainment, hospitaliy, (medical) care, "sales", automation, recycling. I suspect the latter two to go into decline sooner or later as well. As long as we manage to prevent extreme concentration of wealth with the owners of the automated production there shouldn't be a real problem; we're all going to entertain each other and care for each other and sell each othe

    • by goose-incarnated ( 1145029 ) on Wednesday December 31, 2014 @01:15PM (#48705549) Journal

      And what will all our fine corporate interests do when they run out of wage slaves?

      I think you worry too much - I'm in the best part of Africa, the most progressive, the most modern, and even here the government can't even keep the lights on. Over here we just came out of a economy crippling 8-month strike (which was preceded by a 6 month strike). In December, due to cable-theft which the government does nothing about, our company ran on diesel generators for two full weeks (averaging 18l/hour).

      Our workforce is mostly uneducated and they prefer it that way (seriously, they do). Our pass rate for high-school maths is around 10%. Our high school students rank close to last in maths and science. Our minister of education is on a mission to put religion into schools, as if that would alleviate the systemic problems in our educational system. Our populations is incredibly lazy and refuses to work. Their reasoning is mostly vindicated, as they keep voting for a government that takes from the imddle class and gives to their voter base.

      We have roughly 5 million income tax payers supporting around 12 million welfare recipients. The aforementioned 5 million also pay for electricity while the 12 million get it for free. This ratio is only getting worse as time goes on. We have the least amount of corruption compared to any other African state, but we still have annual news about shady arms deals that line politicians pockets at the expense of the people, a president who, in his late 60's, is taking a sixth wife (that taxpayers have to support).

      Our president has been found guilty by the public prosecutor of taking almost R300million from the public coffer for his private benefit, was the recipient of bribes in which the dodgy court found the other party guilty of giving the bribe to the president but refused to find the president guilty of accepting it, has been tried for rape (acquitted, though: he claimed it was consensual), believes that having a shower after sex will prevent him from getting HIV and is unable to read numbers with more than 5 digits (seriously, check youtube).

      Multiple areas have to rely on cellphones, due to cable-theft affecting POTS lines (I'm in such an area), water routinely gets cut off due to not enough power to run pumping stations. The middle class (mentioned above) all pay for private security to guard their homes because the woefully underfunded and under-manned police force simply cannot keep up with the crime rate.

      Yeah, I did mention that we are the best that Africa has to offer, right? Good luck to any company trying to set up manufacturing or processing facilities here - the population is so lazy, that even though we have a 25% unemployment rate (in practice it is higher, this low number is due to the way they count "unemployed") the only people who are willing to work as gardeners are from a neighbouring country.

      The cherry on top? Your business could easily be nationalised if the president decides that the kickback is not high enough. Seriously, good luck with moving stuff from China to here. China has a well-earned reputation for being a nation of hard and industrious workers. They may steal ideas, but they still work more hours than everyone else. Your manufacturing facility is safe there. Our workers refuse to accept an double-inflation raise and strike for 8 months out of 12. Your manufacturing facility won't survive here - the automakers are now planning on moving out (they were the first to come here for the cheap labour).

      • by Spy Handler ( 822350 ) on Wednesday December 31, 2014 @01:18PM (#48705585) Homepage Journal

        What country are you talking about? South Africa?

      • by swb ( 14022 )

        It makes me wonder what Africa would be like today if it had remained under colonial administration but had been able to transition to majority local rule over a much longer time period.

        I recently read a book called "38 days to Cape Town" about a north-south African road trip taken in the late 1970s. Most of Central Africa they passed through was marginally functional as a civilization, including nearly having to abandon their trip because they were unable to buy fuel at any price -- gasoline stations were

      • by bmajik ( 96670 ) <matt@mattevans.org> on Wednesday December 31, 2014 @02:11PM (#48706089) Homepage Journal

        If you view this as an imperialist move by China as opposed to a western style company taking a risky bet, does that change things at all?

        Recall that many Chinese "companies" are appendages of the Chinese government -- and sometimes, even the Chinese Military (acting with quasi-autonomy from the government itself).

        So, if some fragile corrupt African government attempts to nationalize Chinese investments, there's a good chance that China will simply dispense with the problematic elements of said government in whatever way doesn't risk significant repercussions from other world powers. Given what China is willing to provoke between Taiwan and Japan -- two US allies with protection agreements -- I don't think China is going to lose any sleep if it needs to steamroll a few African governments. The US won't do anything about it, and neither will anyone else.

        Finally, why are you still in SA? It sounds like a wretched mess. Turn off the lights on your way out....

      • Yeah, I did mention that we are the best that Africa has to offer, right? Good luck to any company trying to set up manufacturing or processing facilities here - the population is so lazy, that even though we have a 25% unemployment rate (in practice it is higher, this low number is due to the way they count "unemployed") the only people who are willing to work as gardeners are from a neighbouring country.

        A friend of mine offered me a job flying for Shell out of Nigeria...

        They figured out a long time ago that they have to provide their own security, which is why they employ PMCs to provide their own security.

        http://www.mercenaryjobs.org/p... [mercenaryjobs.org]

        http://www.theguardian.com/bus... [theguardian.com]

        Not only does Shell pay the Nigerian Military millions of dollars (which is really just bribe money), they also employ 1,200 private security.

        Shell is spending over a third of a billion dollars a year on security just in Nigeria alone.

      • by Piata ( 927858 )
        Some of those issues could be solved by moving Chinese workers to Africa (which I have no doubt is already happening). Hell, with China's tendency to build ghost towns, I'm sure they're already building factory cities in Africa in an attempt to attract immigrants and locals looking for a better standard of living.
  • by khallow ( 566160 ) on Wednesday December 31, 2014 @12:51PM (#48705351)

    Second, Hebei may simply be at a loss as to how to scale back businesses that they recognize have become massively bloated.

    Simple: do nothing. Laissez faire is the appropriate strategy for something that isn't actually a problem. It's interesting how the instinct to meddle overcomes all residual common sense.

  • by Kohath ( 38547 ) on Wednesday December 31, 2014 @01:17PM (#48705571)

    Building a factory in most African countries is far too risky. Even if the wages were zero, you can't make a long term profit if the government nationalizes your factory. It's also not worth building anything in places where the government might decide to tax away or otherwise take the profits. Moving production to Africa won't be a trend until honest government prevails in Africa.

    • Big problem is not nationalization, but a lack of infrastructure. No electricity, roads, internet, strong police presence, and educated workforce are problems. China as communist as it once was put in electricity, roads, educated workforce, police and strong government, etc.

      It is more than just cheap labor folks

    • by c ( 8461 )

      Moving production to Africa won't be a trend until honest government prevails in Africa.

      I'm fairly confident that a Chinese business might know a thing of two about working with a corrupt government.

    • haha, the government of an African nation vs. the armed forces of China. Place your bets.

      And for anyone who suggests even the USA can't handle foreign occupation, that's only because the USA is half-assed and merciful. The Chinese will do things brutal colonial Roman-style. for example one anti-chinese action will an entire city wiped out.

  • What happens to the CCP?
    How will they maintain control when the economic party is over?
    They already are tenuous in their control of China, regardless of what western media portrays.
    I'm sure they are looking over their shoulders constantly and trying to figure out how to keep a Billion people from revolting...
  • The Two Chinas (Score:4, Interesting)

    by 140Mandak262Jamuna ( 970587 ) on Wednesday December 31, 2014 @02:52PM (#48706451) Journal
    Despite all the unity and centralized command economy, China is essentially two countries. About 100 million Chinese, mainly near the coast, in the fertile deltas of their great rivers form one China. It has the factories and its residents reap the economic benefits. Then there is the hinterland where the remain 1 billion Chinese come from. They work their fingers to the bone in abysmal conditions in the East for 50 weeks a year for a 2 week holiday home. Spend threes day going and three days coming back to the factories.

    The Elite China has no soft corner for their own brethren from the interior. They would happily out source and drive the wages down even further if they could get a few more yuans. Exactly like our US corporate titans who would out off shore everything to increase their income, and keep the income off shore to reduce taxes. Neither of them have a shred of kindness to rest of their own countrymen. It is them who are looking for low wages across the globe. They are as shortsighted as the oil men who triggered the Iraq war in 2003 hoping to lock in the Iraq oil for themselves. They may be able to start something, but they may not be able to control it very well.

    • you only point out what the purpose is of those deserted cities in Africa that China is building. I see some posts here imagining the Chinese will use African people and uplift them.....guess again, it's a kind of colonization, there will be Chinese in those cities getting a somewhat better wage than if they had stayed at home.

      As for dealing with a government that tries to nationalize those factories, I'm betting on the ability of the armed forces of China to be able to whoop any and even all Africa governm

      • Agree with you, the east coast Chinese are not kind to even their own countrymen from the western interior. People with connections get ahead and don't care who they tear down in that process. My Chinese-American colleague visited Shanghai and came back with very disturbing social trends. His classmates stayed back while he emigrated some 20 years ago. He has done well in Ameica, but his classmates have reached the rank of Colonel or its civil service equivalents. A significant portion of them, somewhere no

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