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Hardware

Hardware Manufacturing in China's 'Hot Zone' 348

solferino writes "'Anything you can make for $100, we can make for $40,' Chen says, summing up his commercial philosophy. An interesting profile in Wired magazine of the computer hardware manufacturing 'hot zone', situated around the pearl river delta in mainland china, just outside Hong Kong. The factories are mostly financed and operated by Taiwanese business interests. The article looks at life and business in the city mainly from the point-of-view of these 'foreigners'."
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Hardware Manufacturing in China's 'Hot Zone'

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  • Foreigners? (Score:2, Informative)

    by Anonymous Coward
    Overseas Chinese, especially Taiwanese, are not foreigners. Many of those over 50 were born in Mainland China. They're returning to their native land and regaining some of the money and property that was unjustly stolen from them.
    • I read the entire article and fail to see how your post has anything to do with it.

      Do moderators even read the subject at hand before they mod? Or do they just mod on which one "sounds" cool/hip/post-moderern?
    • regaining some of the money and property that was unjustly stolen from them

      Sure... returning to exploit the Chinese population and in the process making huge sums for themselves and the Communist leadership.

      Oh the brave and courageous ex-patriot Taiwanese!
  • by 0x0d0a ( 568518 ) on Wednesday October 23, 2002 @09:01AM (#4512197) Journal
    Let's hear it for sweatshops!
    • Can't you realize sarcasm when you hear it?
  • $40 eh ?

    Lemmesee, at the current minimum wage over there, this means that $39.96 is cost+profits and $.04 is the wage of about thirty 14 year old kids...
    • People that willingly enter into contracts can't be called slaves....it's an insult to people who actually were/are slaves.

      If you were to remove these so-called "sweatshops", do you really think life would suddenly improve for those working there? Don't you think that those people might actually know what is good for themselves better than you do? I know it's hard to imagine...but try. If someone takes a job making what we consider to be very low, then it must be better than the alternative (for that person)...else they wouldn't have taken the job.
      • There are around 75 million urban unemployed in the PRC. There are about 150 million "surplus rural" workers. That makes about 225 million people who are simply idle. If they can make *enough* sweatshop jobs to take most of these unemployed out of circulation, wages will start to rise but it's going to take a lot more changes in the legal code to make that happen.

        It's a slow process to make a capitalist country. Hopefully, the PRC will make it with a minimum launch of nukes along the way.
      • If you were to remove these so-called "sweatshops", do you really think life would suddenly improve for those working there?

        So... we are doing these workers a favour by exploiting them?

        Who knew that the multi-nationals are just trying help out! What humanitarians!


  • Cheap (Score:5, Insightful)

    by e8johan ( 605347 ) on Wednesday October 23, 2002 @09:02AM (#4512206) Homepage Journal
    We want cheap computers, but don't care for politics. Lets use (next to) slave labour in a communist contry!

    My biggest problem with semi-conductor companies producing in 3rd world contries is that these factories do no require much manual labour so the money saved isn't that much. Of course land and construction will be cheap.

    It is also nice to see the communist government claiming to be more "fair" letting the "evil" market economy enter whenever it is profitable. This makes them even worse, clinging to a lye preventing the people to gain privileges and a better standard while letting the "right" businesses in. I can't help it, but I suspect that bribes and corruption is very wide spread in this kind of areas.
    • Fair? Good luck. (Score:5, Insightful)

      by El Camino SS ( 264212 ) on Wednesday October 23, 2002 @09:25AM (#4512374)
      Amen brother.

      I doubt that China will let freedom of speech reign supreme. Does anyone think these people want to make anything but crap wages their whole lives? Give them a better life, and you'll have the whole system collapse when they want something more for themselves.

      Yes, I know the counterargument about this one. Heard it a lot. "Blah blah best wages they ever had blah blah." So here is my response.

      Don't you want to make better wages right now? Doesn't everyone? What if they want to unionize? What if they want to speak out against unfair working conditions? What if the corporation is going to have unsanitary and toxic byproducts spilling out all over China...

      No wait. We know that one already. Pollute away. Happens everywhere in starting industry. As long as the PRoC gets a little profit, its all good.

      I am not saying that it isn't good for the Chinese people that they are getting manufacturing jobs. I am saying that we should excourage them to be as free and open with their work as everyone else. That we should not be satisfied until everyone is livign a standard liek we are, if not better.

      Honestly, I really hate the idea that just because a bunch of people live under a jackboot thug regime, it means that they we somehow desrve to be better off and recieve the fruits of exploitation.
      • by dbrutus ( 71639 ) on Wednesday October 23, 2002 @09:56AM (#4512641) Homepage
        There are 225 million chinese unemployed (counting both rural and urban unemployed) in the PRC that would desperately want these jobs. Out of an estimated 800 million strong labor force that works out to about 28% unemployment. The unemployment rate in the US, last I checked, was 5.9% and people are already very nervous about jobs, nobody's hiring, people are taking a lot more abuse from their bosses, etc.

        Get real. As long as PRC employment is so high, people are going to be scared to lose what they have. So what kind of companies are going to go to such a country where the politicians are all corrupt, the bureaucracy is mind numbing, and objectively the whole government has no business being stable with multi-year 20%+ unemployment levels and growth petering out? You betcha you're going to see lots of sweat shops. If the world's really lucky we're going avoid seeing the prospect of a chinese civil war complete with nukes tossed around. But we need to be very lucky for that to happen.
    • Is this not a necessary stage in the development of every modern democracy? If you look at the UK, arguably the birthpace of modern capitalism, you had an industrial revolution with appauling working conditions long before you had a modern democracy. The same pattern was repeated in various forms in Europe and the US, and is currently being played out in the former USSR.

      The growth of industry leads to the growth of skilled profesionals and the emergence of a middle class. These people in return need the freedom to manage their capital and labour relations which leads to a complex legal structure which is best managed by a "democratic" system.

      Even Karl Marx noted that Capitalism was the most revolutionary form of society and observed that the interests of capitalists often coinceded wth the growth of "democratic" society.

      So I would fully support all industrialisation as a precursor to challenging all non democratic countries. Policies of isolation and non - industrialisation in states such as North Korea and Cuba have clearly failed, free trade is the only way to generate free societies (and while we are on this subject, what are all those steel traiffs about ...)
    • Actually, what often happens in places like China and Southeast Asia is that companies sign agreements to employ X number of workers. The nice thing (to the companies) is that the workers are so cheap that they can often cost less money to employ to do the machinery's job once you consider the cost of upkeeping the machines. Even if you dont come out ahead, the difference is minimal to these companies that still get to hire all those people for labor intensive work for dirt cheap. I think you are a little off base by assuming that machines do most of the work. These companies do move there for a reason, and while lax laws are a big part of that, I think saving on labor costs is still number 1. I mean people still need to unpack trucks and maintain the facilities and things like that. In the US, guys like that make $12-20 an hour. Over there, they make a few dollars a day at the very most? So you are talking about HUGE savings. Even the most sophisticated automated chip plants employ hundreds of people. It adds up very quick.
    • We want cheap computers, but don't care for politics. Lets use (next to) slave labour in a communist contry!

      Does this not remind you of the stink Craig Kielburger kicked up a few years back about rug weavers in India? He started this great campaign involving world leaders, showed pictures of four and five year-old kids tying knots in rundown shacks and brought up sob stories about how parents rented their children out so they could pay for a few years' food.

      Apparently Mr. Kielburger belives that children in those countries don't deserve to weave rugs, and should instead be garbage-pickers or prostitutes.
  • by _Sambo ( 153114 ) on Wednesday October 23, 2002 @09:02AM (#4512211)
    What made the US a super power? (Besides the threat of Nuclear War) The people in the US that were willing to work all sorts of hours. The US became the Hegemony because the US culture has, to varying degrees, penetrated every other culture in the world.

    Now China has the most valuable resource: cheaper than hell labor. Now all China needs is to reinvent its culture (again, for the umpteenth time) and, again, the middle kingdom could be the Hegemony.
    • The people in the US that were willing to work all sorts of hours.

      About fifteen years ago they were saying the same thing about Japan and look what happened. The American advantage is adaptability -- the ability to see a threat to their industries and respond forcefully. Again, in the case of Japan, the domestic auto industry transformed itself within a few years after seeing that the Japanese were providing what people wanted: cheap, reliable cars.

      Now China has the most valuable resource: cheaper than hell labor.

      Many companies that export labour under free trade agreements discover that paying 50 cents an hour gets you 50 cents an hour worth of labour -- in other words, it makes sense to pay higher wages to better-motivated workers, because the goods they produce are of better quality.

      • Well, sort of. If the US had the most productive workers in the world (and we don't, West Europe does) we still don't have enough of them to make everything so it pays to trade and it pays to move some industries to places like the PRC. That's the essence of comparative advantage. Essentially, the more efficient country should concentrate on high value added goods and the less efficient producers should concentrate on low value added goods. If you look around, this is actually a pretty good fit to the real world.

      • The American advantage is adaptability -- the ability to see a threat to their industries and respond forcefully. Again, in the case of Japan, the domestic auto industry transformed itself within a few years after seeing that the Japanese were providing what people wanted: cheap, reliable cars

        A few years? Try a decade. The first reliable Hondas and Toyotas rolled into the US in the 70's. What was the US response? The Pinto? The Chevette? The Nova? To help the domestic auto industry compete, the US used it's greatest weapon... tariffs on Japanese cars. That helped Detroit lumber along until Ford got the Taurus up and running.

        In every situation where foreign competitors outpace domestic industries, the industries petition the goverment for protection in the form of tariffs. I'm not saying that's bad, but that's a long ways from saying our domestic industries were quick to respond or responded forcefully.

        Ditto with consumer electronics. When Sony and Panasonic started producing quality radios, how did GE and RCA respond? They asked the goverment for protection, getting import restrictions and high tariffs. Clothes from China? Tariffs. Honduran Bananas? Tariffs (well, before NAFTA).

        And yet, the US complains when Japan tries to protect its industries from American products. The US complains when the EU puts high tariffs on US products. When it comes down to it, it's the same on both sides, using tariffs and import restrictions to protect domestic industries.

    • What made the US a super power?

      The size, freedom, military strength, and relatively free market economy enjoyed in this country.

      The people in the US that were willing to work all sorts of hours.

      There are people like this everywhere in the world. Where are the other superpowers?

      The British have some of the freedom and some of the free market economy needed to become a super power, but not the size.

      The Chinese have the size and the military strength (maybe), but not the freedom or free market economy.

      US became the Hegemony because the US culture has, to varying degrees, penetrated every other culture in the world.

      Exactly -- due to our free market economy which has been ingrained into our psyche since the start of the nation.

      Now China has the most valuable resource: cheaper than hell labor.

      The most valuable resource is intelligence, and following that, an education.

      Now all China needs is to reinvent its culture

      Translation -- switch from a communist regime to a capitalist regime. Much blood-shed will be required.

      and, again, the middle kingdom could be the Hegemony.

      And then Neal Stephenson [amazon.com] would again be seen as a prophet, but I doubt it.
    • "Now China has the most valuable resource: cheaper than hell labor."

      I'm sorry, but if I had a large number of captive employees who I could make work 24 hours a day, 7 days a week without pay and without benefits I certainly would be able to undercut some piddly Communist country.

      You put me in charge of Hell and I'll turn a profit.

    • I disagree- the US became a super power because of World War II; it was a watershed event for this country. While the rest of the world was taking turns blowing up each others factories, decimating their populations, and sowing the seeds of political strife we were ramping up capacity, production, and developing business. The US is a super power for one simple reason- economic power [www.hhs.se]. Think about it- we don't have the largest population [factmonster.com], the most educated population [www.hhs.se], or even the longest life expectancy [www.hhs.se]. We just out spend (usually on R&D) every other country in the world on defense; we even subsidize [fas.org] other country's purchase of our arms, regardless of ethics [fas.org], to protect our economic interests. Money is the master of (ORWELL=offense)"defense"(/ORWELL). Why are your tax dollars spent in this fashion? Corporate lobbyists [opensecrets.org] own our government.

      At the end of the day though, what matters to a country is manufacturing, products, such as software, cars, widgets, etc. It doesn't matter to a country how well your software streamlines production, how many widgets marketing & sales can distribute, or how efficient the line can be if you're not paying employees in your own country to then buy those widgets. Third world countries are smart to follow in Japans footsteps. I know that this is a complicated issue, but I sometimes feel that the relentless American profit machine is its' own worst enemy.
      • It was a matter of unique geographical location that saved the US and let it keep its toys to make bigger toys. No bullies grew up in our backyard. That is the real secret of American dominance. Perhaps people forget it because they are determined to stick with one idea, rather than be equally proud of the truth. There's nothing shameful about being in place and taking advantage of chance. To pretend that a "can-do" spirit was responsible for everything America has now is a rather biased and reckless opinion of history. You'll find inspirational spirit and exceptional people in every culture on earth- America was just in the right place at the right time.
      • Why are your tax dollars spent in this fashion? Corporate lobbyists [opensecrets.org] own our government.

        Or it could be because people are trying to kill us...

  • Oh yeah? (Score:4, Funny)

    by YeeHaW_Jelte ( 451855 ) on Wednesday October 23, 2002 @09:02AM (#4512213) Homepage
    Well, anything you can make for $40 I can break for free!

    Beat that!
  • by ekrout ( 139379 ) on Wednesday October 23, 2002 @09:02AM (#4512217) Journal
    Anything you can make for $100, we can make for $40,' Chen says, summing up his commercial philosophy.
    Yeah, and KIA cars cost $8,000 and a mid-level Mercedes is around $45,000. But if I had a choice, I'd definitely tend to side with the German-engineered, reliable Mercedes over the quickly-slapped-together-in-as-little-time-and-for -as-little-$-as-possible KIA.

    EricKrout.com [erickrout.com]
    • by Ab0rtRetryFail ( 549588 ) <{floydru} {at} {hotmail.com}> on Wednesday October 23, 2002 @09:08AM (#4512246) Homepage
      I realize that Kia may elicit a scoff from many an American now... but let us not forget history.

      In 1975, how many people would rather take a sturdy, well-engineered Chevrolet than a quickly-slapped-together Honda? A sturdy, well-built RCA instead of a cheapo Sony?

      Notice how much that's changed in the 25 years since?

      China (and also, to a lesser extent, South Korea) is in the position that Japan was 25 years ago. Wait another 15 or so years (maybe less, given China's huge population) and you may be forgoing Japanese electronics for Chinese ones.
      • And by then the Chinese alternative will cost just as much as the (current) major brands. You didn't complete the other section of your trend analysis.
      • by twitter ( 104583 ) on Wednesday October 23, 2002 @10:24AM (#4512923) Homepage Journal
        In 1975, how many people would rather take a sturdy, well-engineered Chevrolet than a quickly-slapped-together Honda? A sturdy, well-built RCA instead of a cheapo Sony?

        Who said RCA was well built in 1975? Sony cleaned up the electronics market by 1985 by making stuff that was superior.

        Today, much of what Sony does is not superior because they have opted to use Chinese slave labor. Seen a dream cube lately? Twenty years ago they were rock solid with a flourescent tube display that auto dimmed but was bright enough to see in daylight. Today, that same machine has a poorly fitting switch and cheap LEDs for a display. But then again, who esle is making anything? The dream cube sits on a shelf next to an even more repulsive RCA from a similar factory.

        Wait did I say "slave labor"? Yes I did. China is a command economy run by a party which will enforce it's line by death. No dissent is allowed because there is no free press. Workers may flock to this place, but that is because they are left with few alternatives. Comfort is realative and people are easier to control when you make things we take for granted special and only for the privaleged. Most people, even the special ones are have little choice about what they do. As in 1984, purge is continual for the special.

        This system is only working for a few, and only because they have a free economy to sap. Look at the former USSR, now that you can. They had a highly technicaly educated society, yet most things we take for granted were rare, vehicle ownership, TVs, even radios in a country that would love for everyone to have propaganda everywhere! Most if not all women were forced to work so child rearing was communal, as it always was for peasants in Russia. The command economy works by creating artificial scaricty. Without trade with free economies, most ordinary people lived only to labor in what we would consider poverty. This in a country with more land mass than any other and vast resources. Bigwigs lived well, sent their children to good schools and risked a bullet in the back of the head. Communists are always like this. The only difference betweeen China and the former USSR is that countries of the free economies are dumb enough to risk all their capital in a place that will surely take it all when the money stops flowing in.

        The article sums it up nicely as it tells us the sickening life of self abuse in wine slop the lucky live we pay for and then the average story. This is you, and the woman is your would be wife:

        ... [Chinese] hometowns are bad enough that they're willing to travel hundreds of miles for the chance to earn Primax's starting wage of 300 yuan a month -- $36, or 21 cents an hour for a normal 40-hour week -- a typical figure in the Pearl River Delta. Routine overtime can push that up to 450 yuan, and Primax's worker dormitories offer free room and board.

        In background and motives, these workers differ little from Zhang Ping, the hostess at the nightclub. She graduated from high school in Harbin but flunked the college entrance exams (only about half of test takers pass). For two years she worked for 200 yuan a month in a state-owned wholesale company, but it went bankrupt. Then she tried a stint behind a sales counter, but no one was buying much in a city with 25 percent unemployment. Finally, a girlfriend from down south wrote to say there was good work at the nightclub.

        Free room and board for slaves and whores who work overtime everyday, how repulsive. That's what you get without laws, contracts and free speach. Surely our trade with such an economy is dragging us down more than it's lifting them up.

    • Yeah, and KIA cars cost $8,000 and a mid-level Mercedes is around $45,000.

      For the record, KIA is a Korean company and KIA cars (at least the ones made in Korea) aren't cheap because of labor costs (labor in Korea is much more expensive than in China).

  • quality? (Score:3, Insightful)

    by Palmguy ( 574518 ) <Mathrocks314@yah[ ]com ['oo.' in gap]> on Wednesday October 23, 2002 @09:05AM (#4512227)
    But is the quality of the $40 one made "just outside Hong Kong" the same as the $100 made in the USA?
    • Re:quality? (Score:2, Informative)

      by tzanger ( 1575 )

      But is the quality of the $40 one made "just outside Hong Kong" the same as the $100 made in the USA?

      Having worked with several US and Taiwanese manufacturers, I would say it's a toss-up. Some US manufacturers are far more expensive and the quality is so poor you'd think it were assembled by chimps.

  • China Activity (Score:5, Informative)

    by webword ( 82711 ) on Wednesday October 23, 2002 @09:07AM (#4512240) Homepage
    China is extremely hot right now. I know for a fact that many companies are getting serious about sending their manufacturing to China for cost reasons. Also, the Chinese market is growing at a rapid clip. It won't be long before they are sucking up as much oil as we are, and expecting a higher standard of living.

    This might interest some people: The New Silk Road - Secrets of Business Success in China Today. [webword.com] As I indicate in my review, I think the book is good, especially for people who want a 30,000 foot view of doing business in China. I also liked Chinese Business Etiquette: A Guide to Protocol, Manners, and Culture in the People's Republic of China (ISBN: 0446673870). This Etiquette book is more ground level, "tactical", and person-to-person. Combined, these two books will give you a good taste for doing business in China.

    In any event, I know that going offshore is having an impact. Not just in manufacturing, but in other areas too, such as programming. It is strange to see whitecollar jobs fly away from the U.S. to places like Hungary, India, Russia, and China. Why? Well, when I was younger, I thought these "brain" jobs couldn't be easily replaced by lower cost labor. Well, that's just not true. The internet has had a lot to do with that, of course. I'd be interested to hear what other folks have to say about outsourcing "brain" work.

    • Re:China Activity (Score:4, Insightful)

      by aburnsio.com ( 213397 ) on Wednesday October 23, 2002 @09:23AM (#4512355)
      About third-world outsourcing brain work: don't do it.

      Every company I've heard of doing this, and every programmer I've talked to that's had to work with these third-world outsourcing companies, has had absolutely nothing good to say about it. There may be exceptions, but in every case I know if it's nothing short of a disaster.

      First, there's the distance problem. Having disparate groups from across the world work together in free software or academia is possible, but it doesn't work in corporations. The cultural and political barriers cause more headaches than is already prevalent in the corporate world.

      Second, there's the time problem. It really is hard to work with people on the other side of the earth because your schedule rarely overlaps. To have any meetings, someone has to come in early, or someone has to stay in late. Turnaround time for any question takes days instead of hours (for same time zone) or minutes (for the next cubicle). When facing corporate deadlines this can really bite you.

      Third is quality. I don't want to sound pompous and say that third world programmers are no good, but usually they are no good. The good ones have left and have come to the first world, or are in universities studying to come to the first world. They're not going to be sweating away doing the same job in the third world getting paid 1/4 of what they can get in the first world. You can get away with that for lower class labor, who can't afford a plane ticket or immigration costs, but for university-educated third world, they have a reasonable capability of coming to the first world.

      Fourth is culture. It's really, really hard to work with people who don't agree on culture; by this I mean work culture, not necessarily the same thing as culture in general. It's the reason sales and development in the same office are so often at eachother's throats. Even though developers in the first world come from all different backgrounds, countries, and cultures, there is a common work ethic among good first-world workers. The third world is often much more laid back, and people don't react to schedule pressure in the same way you might expect. There are more misunderstandings which hinders the group from working together.

      In summary, there are several key problems with outsourcing brain power to the third world that prevent it from being a success. The real core of the problem is that, contrary to the views of many executives and MBAs, intellectual workers are not assembly line workers and cannot be managed in the same way. Programming, or brain work in general, is not a repeatable, repetitive, explicitly definable operation which can be performed by unskilled laborours in any part of the world. This makes it especially unsuited to third-world outsourcing.

      If you or your company is considering this, save yourself a lot of headache: "Just Say No".

      • It's quite a biased assumption you make there. I've worked with several companies from Bangladesh, Colombia, Nepal and Jamaica.

        Ofcourse there are bad companies, but they are everywhere.
        It's all about good management of your outsourcing project. If it's software, provide them with good abstract data about your software project like the pre/post conditions failure conditions and everything, if you don't give em good documentation about your project, they will end up filling in the gaps you left in it.

        Second, yes many people in third world countries studied abroad and no they didn't stay there. They went back to their countries and are in charge of your outsourcing project over there.
      • Re:China Activity (Score:4, Insightful)

        by pubjames ( 468013 ) on Wednesday October 23, 2002 @10:09AM (#4512776)
        Programming, or brain work in general, is not a repeatable, repetitive, explicitly definable operation which can be performed by unskilled laborours in any part of the world.

        Actually the higher the quality control, the nearer programming becomes a repeatable, repetitive, explicitly definable operation. Unfortuantely this also makes it extremely boring.

        I've done programming for "mission critical" systems for some major international banks. The scope for creativity was zero. Everything has a precise methodology, down to the last full stop, and everything was checked and rechecked. As a creative person, it drove me nuts. But I could see it could be something that would be ideal for outsourcing to China or India (which is what I believe many banks now do).
  • by randomErr ( 172078 ) <ervin DOT kosch AT gmail DOT com> on Wednesday October 23, 2002 @09:07AM (#4512243) Journal
    They steal all the software and make the equipment themselves.

    Asia feels heat as sofware piracy rises
    http://www.siliconvalley.com/mld/siliconvalley/435 0115.htm [siliconvalley.com]

    Microsoft Corp said on Wednesday software piracy was on the rise worldwide and China, Taiwan, Hong Kong, Malaysia and Indonesia were the "hotspots" in Asia where major counterfeiting activities thrived.

    Katharine Bostick, Microsoft's senior corporate attorney, said penalties imposed by many governments were not tough enough, resulting in the growth of large-scale manufacturing and distribution of counterfeit products.

    "It involves organised crime," Bostick told a technology conference in Cyberjaya, Malaysia's software hub.
  • Anything?? (Score:4, Funny)

    by ksplatter ( 573000 ) on Wednesday October 23, 2002 @09:13AM (#4512279)
    American Translation: Anything that you can do for 100 dollars we can do for 40 but now its gonna be made out of cardboard, cheap plastic and rubberbands. Maybe a paperclip or two if necessary.
  • by Ratface ( 21117 ) on Wednesday October 23, 2002 @09:14AM (#4512297) Homepage Journal
    "It works" only if you are looking at the equation from the point of view of money. As the book "No Logo [nologo.org]" explains well, there are similar economic zones in vvarious developing countries around the world where people are exploited to produce things at extra low prices so we in the West can get our fix of technology/fashion.

    China has a terrible record on human rights and so is a popular place to set up sweatshops. The fact that they are owned by Taiwanese immigrants makes no difference - an exploiter is an exploiter no matter what their race!

    I just wish there were more examples of companies using these services listed in the article so that we knew who to boycott!

    • That's right! Let's move those evil companies out of China.

      That will leave the people better off! Jobs are bad for them. Maybe they'll just die and then we won't have to worry about it?

      I don't like the idea of those countries with horrible human rights violations but until the people see the benifit of a freemarket where everyone has a chance at "making it", things will never change. If the people are unemployeed and hungry and destitute, the only recource is crime and corruption and turning to an even MORE corrupt government than what communism provides.
    • You've got to be kidding me.... Exploitation - you are confusing dollar cost with purchase power parity.... and even that measure is biased by the baseline requirements of a Westerner's need to buy western food, western clothes, western houses and western goods.

      If you think about it these people are able to SAVE money and send it home to their families. This means that they have disposable income - given the fact that a huge number of Americans live well beyond their means and are digging a debt hole into their lives I think you should take time to pause. Perhaps these guys are better off than many Americans.

      These people want to work here - they travel HUGE distances to do so - in a way they are exploiting their employers because they value the money they are receiving more than the time they spend... ie they are making money from the gullibility of the employer who is giving them money for their time and work.

      Come on - don't think about it in US$ terms - they are working hard and receiving cash that they can do things with - and the deal is good for them - they're not stupid - they would run otherwise. It's called capitalism - and it has worked for the west and will work for the Chinese.

      I work in Hong Kong and have done for 10 years. My salary is enormous compared to that in my home country of New Zealand, and even what I could earn in the US - and NZers don't consider themselves ripped off by the (comparatively) paltry salary they recieve - nor do most Americans. What? You get $USD15 per hour - I get $USD40 in Hong Kong... you're being ripped off!!!!

      It is all a matter of context - you don't pay $USD2000 per month for a shoe box apartment like I do in Hong Kong either....

      Just because the numbers are low does not equate to slave labour. In fact the anti-globalisation idjeets are working against the wishes of the poorer countries who want more globalisation and more access to western markets - even if they are being paid at $USD2 per hour.

      Think about it.
      • I'd say one indicator of exploitation is where people work in very unsafe working conditions, with little chance of improving them, and suffer health problems as a result of working. A second one is child labour.


        I accept that the reason people work in these conditions is because this is better than the option (starving). But do you approve of child labour or unsafe working conditions? Don't you think we should be trying to find ways to improve social as well as economic conditions?


        I accept that protectionist first world countries are terrified of trade barriers coming down because there won't be any industry left in NZ or USA or UK or other first world countries if companies can outsource their production to developing countries for far less cost. Joe Public will be happier when his new auto and tv cost less.

  • by ackthpt ( 218170 )
    Anything you can make for $100, we can make for $40,'

    Sounds like the reasoning behind something mentioned under the Power Supply Review [slashdot.org], a couple days back, regarding produce it fast enough and let quantity make up for the high failure rates.

  • by Choco-man ( 256940 ) on Wednesday October 23, 2002 @09:16AM (#4512306)
    See picture on the first page of the story.

    Is that a mouse in your pocket, or are you just happy to see me?

    Man, if I had benefits like that at work, I'd work harder too!
  • by quantax ( 12175 ) on Wednesday October 23, 2002 @09:18AM (#4512318) Homepage
    When I was working for a designer lighting manufacturer as a network admin, we were currently in the process of moving our manufacturing process out of Germany over to China, for the simple reason that it was A LOT cheaper. Now, this isn't even electronics, merely simple electrical work w/ designer casings. However, I noted many a time that the German versions were much higher quality than the Chinese varients, though the Chinese ones were often 2x - 4x less expensive, though not 2x worst than the German ones. As far as electronics go, this is not surprising, but quality control is a MAJOR issue here. Things like Abit's exploding/leaking capacitors and such are signs of shoddy parts. There is NO point to buying something for 1/2 the price if you are going to have to RMA it in under a year.
  • by Astrorunner ( 316100 ) on Wednesday October 23, 2002 @09:21AM (#4512336) Journal
    "any ting you want."

    "Anything?"

    "Anyting"
  • Who has $40? (Score:4, Insightful)

    by jocks ( 56885 ) on Wednesday October 23, 2002 @09:26AM (#4512387) Homepage
    If the manufacturing is taking place in China and the money is going to China who is going to be able to buy the product?

    For example, we are constantly seeing people being made redundant, unemployment rising throught Europe. I can only assume that the US is also suffering. In the long term if the production of most of our goods ships to China, the wealth of the nations will also be shipped there too.

    That leaves us in the "West" impovrished, disenfranchised and unable to purchase any of these goods. Sorry to be gloomy but this is NOT good news.
    • Re:Who has $40? (Score:4, Insightful)

      by davejenkins ( 99111 ) <slashdotNO@SPAMdavejenkins.com> on Wednesday October 23, 2002 @10:18AM (#4512871) Homepage
      Your entire argument depends on a 'zero-sum' view of wealth: there is only so much gold on the planet, and for every ounce that China gains, the US, Germany, France, or someone must lose an ounce.

      However, that is simply not true. Wealth is measured many different ways: cost-of-living, purchase ability, GDP, etc. And economics are founded on a virtual platform: money. All currencies are completely artificial (since the dollar left the Gold standard in 1972). As such, the total wealth of the planet can grow (or shrink) without any direct tie to a physical asset (theoretically).

      In direct reference to your comment: just because China's arrow is pointed up (for the moment), and the West's is pointed down (for the moment), don't assume doomsday. In reality, All those Chinese shipping companies, manufacturers, etc. are financed by New Yorkers, Londoners, and anyone else who wants to buy stock. This can only benefit the bottom line: as labor becomes more efficient (by finding cheaper workers in China), then products become cheaper, and your purchasing power increases: because a computer only takes 5% of your salary, instead of 25%, you now have 20% to spend on candy and pr0n.

      Eventually (hopefully), the Chinese WILL be just as rich as the West. Then there won't be any real reason to point missiles at each other, and ther will be 1B people to buy more stuff.
    • Re:Who has $40? (Score:2, Informative)

      by keyed ( 560115 )
      For example, we are constantly seeing people being made redundant, unemployment rising throught Europe. I can only assume that the US is also suffering. In the long term if the production of most of our goods ships to China, the wealth of the nations will also be shipped there too.


      That leaves us in the "West" impovrished, disenfranchised and unable to purchase any of these goods. Sorry to be gloomy but this is NOT good news.
      A lot of manufacturing already left the US, starting in the 80s. While it did take a lot of jobs out of the country, the US economy has compensated and become more of a service economy than manufacturing.

      If you live in Europe, I'd be worried. While the manufacturing is of much higher quality than China, the quality of Chinese goods can only go up in time. Japan did it, and now it's happening to them in turn.

      Japan has been floating in and out of a recession for the last decade and while it's their banking system that keeps them in it, the fact that Japanese corporations are moving their manufacturing out of Japan with no signs of new jobs being created to replace the ones lost doesn't help.
    • Re:Who has $40? (Score:3, Insightful)

      by RobinH ( 124750 )
      In the long term if the production of most of our goods ships to China, the wealth of the nations will also be shipped there too.

      Actually, all this does for your (I'm guessing) European country is free up your labour. If you can free up 1000 workers with higher educations by moving the work to a country with a less educated/skilled workforce (I'm talking line workers here), then you free up 1000 educated/skilled people for your work force. That makes the world economy more efficient (i.e. the least skilled person who is qualified for a job should be the one doing it). Those 1000 Chinese who got jobs just became consumers, and some of them would probably like to buy something made in Europe. In return, Europeans get to save 60% on their computer equipment, meaning their businesses can now operate more efficiently too.

      Your job is not to bitch and complain, but to get off your sorry ass and think of a way to better exploit the workers in your own country. Dream up a new product that you can produce with those 1000 new (relatively highly skilled, compared to the 3rd world) workers. Start a business, hire them! Have you not learned the reasons why capitalism DOES actually work sometimes?
  • by 21mhz ( 443080 ) on Wednesday October 23, 2002 @09:29AM (#4512407) Journal
    ...manufacturing 'hot zone', situated around the pearl river delta...

    Reading this gives me creeps, even though I'm not a radical tree-hugger. Seriously, what are the policies of the Chinese government on industrial pollution? Let them all dump as long as cash flows in? Or something more sensible?
    • No, no you got it right the first time, dump as much trash as long as the cash flows on in.



      The thing most people forget was that alot of the modern industrial countries had to go through this phase to get to were they are. Somehow people believe(especially in the US), that the poorest of the poor countries should start at the minimum standards that we are currently are at, instead of realizing they ain't got no money.



      Do I like the fact that these people are treated horribly, paid poorly, and live and work what we would consider a hell-hole, NO! The thing everyone seems to ignore is how to develop a developing economy. The two things China has going for it are cheap labor and are willing to ignore environmental controls, that is really what China is trading, no matter what they make

  • by teamhasnoi ( 554944 ) <teamhasnoi@@@yahoo...com> on Wednesday October 23, 2002 @09:33AM (#4512443) Journal
    Minnesota (where I live) has a population of roughly 5 mil. What are they doing with the waste products of 40 million people? Burning? Ocean Dumping? Recycling?? MN has problems with pollution, and nowhere near 40 Million.

    That's just too damn many people. Apparently, they can make those 40 dollar items by brute force. Hell, they could make diamonds by having everyone pile on a piece of coal.

  • by Lovejoy ( 200794 ) <danlovejoy@NoSPAM.gmail.com> on Wednesday October 23, 2002 @09:36AM (#4512468) Homepage
    Anything you can make, We can make cheaper-
    We can make anything cheaper than you!

    --
    Now seriously. This is really sickening:

    No reliable legal system enforces contracts. Theft of intellectual property is routine. Business disputes are often settled by hired thugs; on occasion, those thugs are the local police. But though it can feel like Dodge City, Dongguan works more like 19th-century Manchester, as perhaps the world's most extensive and systematic exploitation of transient labor by mobile capital. And the people who oversee this system -- and profit handsomely from it -- are the officials of the world's largest Communist Party.

    While I am not an blind supporter of Amnesty International, I think they are spot-on with regard to China." [amnesty.org]

    We have normalized trade relations with them, coddled them, and deceived ourselves under the banner of "engagement." We should not accept super-cheap components as a result of slave-labor or child-labor. Communism is bad enough, but now we have the worst of both worlds - totalitarian communism and ruthless robber-baron-style capitalism.

    Let me be clear - I have nothing against Chinese people, just their government's practices.

    What do /.ers suggest to contribute to the solution? Stop buying consumer goods made in China? Write to congress? To be honest, it seems rather hopeless.
    • The chinese will solve it themselves but first they've got to get over the hump of having 225M unemployed. Once they've got enough sweatshops and the cheap labor runs out, they'll climb up the quality ladder just like everybody else and start spending their wealth fixing the problems they're creating now.
  • by MoThugz ( 560556 )
    <offtopic class="rant">
    that many of the West-based posters here talk about inexpensive being bad quality and Asian factories ran as sweatshops. It's in the political environment many of you were raised in.

    Almost all your political foes are of opposing principles from which you hold. Wake up call: your ideals (often misquoted as democracy) are not as free as you see it.
    </offtopic>

    These sweatshops amount to a whole lot of (for example) the electronic things you use. I dare say that the computer you're using right now also contains these cheap components. Without these inexpensive products, the US economy no matter how massively independent you thought it was, won't be the way it is today. Why do you thing that China (which has so many times be flamed as a human-rights offender by the US) is a preferred trade partner? I guess when it comes to making uncle sam's pocket fatter human-rights can fuck off and die.

    Now think before you post anything mindless like sweatshops and poor quality goods from China, Taiwan or any other Asian economy... your lovely AMD processors too come from an Asian country, Malaysia.
  • Just on TV... (Score:3, Interesting)

    by martijnd ( 148684 ) on Wednesday October 23, 2002 @09:45AM (#4512541)
    Just watching TV (Taiwan channel) on how an MBA/MA/MSc won't get you a good job anymore in Taiwan. And even with some serious work experience on top you are still not guaranteed a job.

    The main gripe of these MBA's et al seems to be that their counterparts graduating across the Taiwan Strait in China seem to be lined up for fat salaries (China style) even before (now where do we remember this from?) graduation or (horror) are even dropping out of college just for the money.

  • by Shanep ( 68243 ) on Wednesday October 23, 2002 @09:46AM (#4512548) Homepage
    "'Anything you can make work for 1 year, we can make work for 4 days,' Chen says, summing up his commercial philosophy.'"

  • "It was a dark and stormy night. My name is Jonny Wong. I'm employed at a company in Dongguan that makes the ~/` key for keyboards."

    "We've been having problems with a competitor that makes Black ~/` keys. Ours are white or ivory. They're trying to muscle in on our buisiness, they want to take our 2/3rds of the market."

  • In the mid-80's I worked for a company that sold clone IBM's (who didn't in those days?). The owners had contacts in Taiwan who were saying that if we could ship over a motherboard, or anything else for that matter, they could reverse engineer it and have it produced in a few months.

    In those day's multi-layer mobo's were not common and ASIC's were rare so it was not too difficult to do. The reason they could cut their costs was the fact that there was no real innovation just R&D (Rip off and Deploy).
  • made in the US? (Score:2, Interesting)

    by raal ( 14531 )
    Does anyone know of a list of computer hardware that is actually made in the US? What companies acutally still make things here? Or for that fact electronics in general? or heck even more just items in general??
  • by CTD ( 615278 )
    "Chen doesn't understand these people," Lou complains. "They're Communists. If you don't have any limits, people will move everything over here. And then we are trapped." It's a common fear in Taiwan, that once the island's industrial base has moved to the mainland, the "renegade province" will lose its leverage.


    Trade the word Taiwan for the US and "renegade province" for "nation" and think on that for a moment. We are gleefully tearing our manufactureing base apart for cheap labor and the resulting cheap goods. Once the conversion is complete and our nation is 90%+ 'consumer' and 10%- 'producer'.

    What does that bode for the US? What does that bode for the Western World in general?

    I think that the long term effect for China is that the nation does change into something else. Too much money, influence, and information is feeding into that nation from the "outside world" their wall will fall too. What the long term effect is for the West? I do not know.
    • Sorry, I would have to say this has ALREADY happened.

      Where are the Manufacturing Jobs? Where has our "technology" taken us that we have to import the chips that are designed HERE from a foreign nation and pay THEM and their workers cash that as a nation we NEED.

      America as a nation needs to stop playing "Police" for the world and take a look at our OWN economy. Sure, the guy says "Anything you can build" but we WOULD NOT have to pay other workers for that priviledge. We as a nation need to realize that there is only SO Much Crap we can BUY.

      We need to go back to a more industrialized nation. It was INDUSTRY that lifted us out of the Depression. Industry, the ability to make the products, to hire the workers, to rebuild OUR economy, needs to start HERE. Not elsewhere. We can make it cheaper to build here, and the reason we HAVEN'T is because Corporations DON'T want to spend the money needed. Why should they when they can sell us the same product made elsewhere for the same price....and half the cost for them to manufacture?

      America needs to wake up to the reality that we are NO LONGER A PRODUCING nation. We are just a "dirty cop" and even worse to the rest of the world.

      Oops....I am writing this like it means anything.....nevermind.

  • ...and... (Score:2, Insightful)

    by zozzi ( 576178 )
    > Anything you can make for $100, we can make for $40


    Anything you sell us for $40 we resell for $100 elsewhere

    :-)

  • by Conspire ( 102879 ) on Wednesday October 23, 2002 @11:01AM (#4513297) Homepage
    As an expat who has lived in Asia for 11 years, roaming factories and companies both low and high tech all over the region, I must say that this little expose` on Dongguan was pretty damn accurate. The article and several posters did, however, miss a few points:

    1. The savings these mfg companies realize compared with US or European based is not only labor and tax. Industrial environmental waste processing is next to nill in Southern China. The place makes Taiwan look like a park refuge, and I tell you, Taiwan is no place for a scenic vacation unless you are into touring large polluted industrial zones, most of them abandoned now. For most tech companies, waste processing is a large cost, sometimes MORE than labor in industrialized nations. That is why so many fabs get moved over.

    2. Software piracy is an issue, but it is not SAP, Oracle, Sun and our favorite M$ that lose out the most. Most of these Taiwanese companies are using native Taiwanese ERP software. About 50% of it is pirated, and the other 50% is licensed legally from the Taiwan ERP co's with branch offices in China. Either way, Taiwanese ERP software is WAY cheaper than western solutions.

    3. MS has taken a "soft stance" on piracy in China. If they took the same stance they did with companies and individuals alike in China as they have done in Taiwan, there would be an exodus from thier beloved desktop. Taiwan has cracked down hard over the past years, but because the general public can afford it, they still shell out for MS solutions. If China cracked down like that tomorrow, it would not fuel massive MS sales, but would fuel a massive move to GNU/linux and other solutions.

    4. I have watched foreign buyer after foreign buyer be entertained daily over weeks of factory visits in China. As a marketing and sales department, try to imagine the budget a firm would need to do that with clients in New York, London, or even Nebraska for that matter. You just can't get your clients so happy for so little after a hard day's work anywhere in the world. And, thier wives are not around and yes there are plenty of things for the client to do at night. And, happy clients come back to buy more.

    5. A LOT of Taiwanese money in China is the result of one or a combination of the following:

    a. Taiwan firm borrows heavily, boss runs off to China with all the money, firm goes bust. Boss starts new factory in China with money he never has to pay back.

    b. Taiwan firm gets money from Taiwan investors (or private lenders), runs off to China, gives shareholders minimum or no return (or defaults on private loans)

    c. Taiwan firm has uncompetitive business but nice pension fund built up. Taiwan boss transfers pension fund to China, starts new factory. Taiwan employees left with nothing as Taiwan company goes bust.

    d. Taiwan firm some how burns down in flames, literally!!!. Fortunately, boss had insurance, and decides that the insurance payout is better invested in China. Oh, and he had two policies so doubled his capital.

    Of all four above, I have personally known of a firm in each case that has done it and got away with it. Cheap capital (as in extorted), is just another competitive advantage these guys have.

    So, why does China let them get away with it? Because China is the next manufacturing superpower. That's right, in 5 years you will be lucky if you can find 10% of the goods on US shelves made in the USA. Even if they have the tag, those goods are probably assembled in the USA from components and sub assemblies made in China, Mexico, Indonesia, India, or wherever it is cheaper than the US. There are just too many arbitragers out there looking for a buck.

  • by Virtex ( 2914 ) on Wednesday October 23, 2002 @11:13AM (#4513409)
    'Anything you can make for $100, we can make for $40'

    I can produce $100 bills for $100 each. If I can purchase some from you for $40 each (and I want real US $100 bills, not those cheap counterfits), I will buy all you have.

    Hmmm... but I guess you guys don't actually make money, do you?
  • by didiken ( 93521 ) on Wednesday October 23, 2002 @11:22AM (#4513473) Homepage
    As a chinese student studying in US, I do have something to say.

    > by Anonymous Coward
    > Overseas Chinese, especially Taiwanese, are not foreigners.
    > Many of those over 50 were born in Mainland China. They're
    > returning to their native land and regaining some of the money
    > and property that was unjustly stolen from them.

    Usually every time Slashdot has a story anything related to China, communist bashing usually follows. You know this world is full of catch-22s. Nationalist's land taken over by communist. But wfterall, what the United States did build on is their strong military power. Quoted from Black Hawk Down, "When bullets go pass your head, politics go right out of the window." But guns speak for politics. Every countries struggle like this, think about history of Texas and Israel. They fight. Power struggle.

    For human right records, China certainly does not have a word to say. Lest not forget Tiananmen Square, but watched out for next 5 to 10 years. Power struggles and in-fights in the regime be taken account over this

    >Asia feels heat as sofware piracy rises
    >http://www.siliconvalley.com/mld/siliconva lley/43 5 0115.htm [siliconvalley.com]
    >
    >Microsoft Corp said on Wednesday software piracy was on the rise worldwide and
    >China, Taiwan, Hong Kong, Malaysia and Indonesia were the "hotspots" in Asia
    >where major counterfeiting activities thrived.

    Yes, you are absolutely right. Now think about this, if you are a student, your monthly wages is less than $125 USD and you want to do 3D graphics just like you slashdot readers do, will you choose to buy a Maya 4.0 student version for a pirated $4 USD CD or $400 USD student version ?

    Globalization hits every corners of the world. China is forced to open its market and they have to change, but standards has yet to follow. You really can't compare the wage of average Chinese wages with a piece of Microsoft Office.

    By the way, ask yourself, did you ever you Napster, LimeWire, Gnutella and Hotline grab your favourite MP3's and Warez ? Pretty much the same moral story you know. It spares money (for more beer).

    And of course again, that's why Linux is pretty hot. Watch out for the Redflag Linux.

    > by aburnsio.com
    >About third-world outsourcing brain work: don't do it.
    >
    >Every company I've heard of doing this, and every programmer I've talked to that's had
    >to work with these third-world outsourcing companies, has had absolutely nothing good
    >to say about it. There may be exceptions, but in every case I know if it's nothing short of a disaster.
    >
    >I don't want to sound pompous and say that third world programmers are no good, but usually they are no good.

    First, think about should you classify China as a third-world country. Frankly it's kind of hazy to classify it between developed country and developing country.

    It really depends on what kind of jobs for outsourcing isn't it ? Humans are hard to manage anyway. My analogy is to think about long distance love. Some do work out some don't. I bet you can't ask them to to a lexical analysis stuff but I'm sure most Chinese CS students have no trouble competing contracts on Visual Basic and MS SQL, and many MCSE, Cisco and Orcale stuff. In case you don't know, many favourite CS books in the States such as "UNIX Network Programming" by W.Richard Stevens have been licensed by academic publishers of Tsinghua, (I got one for $9), so watch your back and work hard on your CS class......

    Watch out for Microsoft Research in Beijing. They do a lot of SQL stuff don't they ?

    >by Astrorunner
    >"any ting you want."
    >
    >"Anything?"
    >
    >"Anyting"

    I don't find this particularly funny. There're many good Chinese that speaks English well too, those who speaks English AND Chinese well will earn a lot there. I know many Asian American friends see this trend.

    And again, many Japaneses don't speak good English, but money speaks, saving speaks. Look at your logitech mouse.
  • I don't know much about manufacturing hardware, but I know that in the processor realm they cannot make anything cheaper than we can.

    Processor prices are limited by yield (aka. how many good processors come out of the factory) which is entirely limited by technology. Their fabrication technology is not better than ours right now. If anything, it is far far behind. There is no way that they can produce chips cheaper than we can.

    Of course they could possibly get some non-proprietary hardware cheaper, and make their workers work for less. However chip errors occur because of microscopic particles in the air and slight jolts and bumps from a mechanical handler. These are not things that foreign manufacturers have a better handle on than we do. The number of working dies(the chip before its packaged) per silicon wafer is the most important factor in chip price.

  • 'Anything you can make for $100, we can make for $40,'

    I heard Olin King, former CEO of SCI Systems, Inc., say something to that effect about 25 years ago - and they made it to the Fortune 500 [fortune.com] on just that kind of attitude.

    Unfortunately, there were no karaoke hostesses in Huntsville, AL., at that time.

  • by frank_adrian314159 ( 469671 ) on Wednesday October 23, 2002 @12:09PM (#4513915) Homepage
    All this business functions in the absence of what we consider the bedrock rules of a modern economy. No reliable legal system enforces contracts. Theft of intellectual property is routine.

    And, oddly enough, this lack of IP law does have consequences (in this case, leaky capacitors screwing up most motherboards coming from Taiwan in the last 6 months) in a global economy:


    Read here [ttiinc.com] and here [niccomp.com].

    As much as a lot of Slashdot readers might not want to hear this, when information is totally free, things suck. Things also suck when rules put in place to protect information are enforced too rigidly or unevenly. The secret is to find a moderating system that finds the proper balance - something that Lessig has been saying all along...

  • You might want to check todays story [theinquirer.net] over at theInquirer where shoddy workmanship at a lowcost Hungarian plant sunk IBM's diskdrive division.

    There is much more to the equation than cost of labor. Today labor only constitute 15% +- of cost of product. A few month earlier to market will negate any cost advantage that you will find off-shore. Maybe the stagnant PC industry is an exception as the concept of early to market has gone. Read: No innovations.

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