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Title: Say No to China , By: Flint, Jerry, Forbes, 00156914, 6/6/2005, Vol. 175, Issue 12
Database: Business Source Premier
Section: Backseat Driver Say No to China
Say the government fires its economists and outsources the work to China. Let's see how the Council of Economic Advisers feels about that.
I am getting tired of the China story--the one about the exporting machine, sweatshop of the world, king of toys, brassieres and socks. The next chapter in this story as it is commonly told is that China will become an exporter of cars and trucks and destroy our manufacturing base. When? I can't say, but a few things are certain:
China can't do it by itself. Malcolm Bricklin, who has had some success (he brought Subaru to America) and some failure (remember Yugo?) talks about importing hundreds of thousands of Chinese cars from the tiny Chery automobile company. I say don't hold your breath.
With today's safety and emission regulations and quality requirements, bringing cars into the U.S. is not a simple matter of nuts and bolts and sheet metal. Chinese parts, yes, particularly cast-iron parts, but finished vehicles, unlikely. China must sharpen its automaking skills by importing technologies from the West and Japan.
If you want to see hypocrisy in action, look at some of the auto manufacturers who talk of building cars in China for export to other industrial nations but not to their own.
DaimlerChrysler's top executive in China said the German company wants to build Chrysler products in China, with its $2-or-less-an-hour labor, for export to North America. He wasn't talking about sending cheap-labor Chinese cars to Germany, just to us. Good thing, too, because half the Daimler board of supervisors in Germany represent labor. Why buy trouble? Send those cars to the Yanks.
The damage control bell rang, and the DaimlerChrysler executives over here jumped in and said they aren't looking for any small cars imported from China. We'll see.
Honda, meanwhile, is readying a plant in China aimed at building cars for export to Europe. Honda isn't building cars in China to export to Japan. Perhaps the emperor would be unhappy about Honda's lack of concern for the jobs of citizens of the Land of the Rising Sun. So send them to Europe. Perhaps General Motors should announce it will build a car in China for export but only to Japan, hundreds and thousands of them, very low priced. See how they like it.
The New York Times editorialists attack any thought of reprisal for the flood of Chinese goods as unfair to China and its workers. They always worry about the foreign guy, never the man in the shop here. The editorial board knows something about economics, and economists say free trade is a fundamental principle.
You can't help noticing that the folks supporting free trade never have their jobs threatened: editorial writers, economists, professors. I like to imagine that the President fires his Council of Economic Advisers and outsources the work to China, India or Taiwan. Or, imagine colleges replacing those two-classes-a-week professors with brainiacs from India at $50 a class.
This is fantasy. Right now I would like some fresh thinking on the flood of goods pouring out of China. When I went to school, they taught us that trade was based on comparative advantage. The folks in one place had piles of coal and iron ore, so they could make steel cheaply and we would all benefit using it. Other folks somewhere else had marshland and lots of people, so we would all be better off eating their cheap rice. See, everyone had some comparative advantage.
When I grew up I discovered that sometimes you couldn't find a comparative advantage. The Japanese had no raw materials or cheap energy. They just worked hard, kept their currency cheap and kept the competition out. They didn't have to worry about defending the home market and could concentrate on exports. China's comparative advantage seems to be having enough prison cells for anyone who wants a raise or a real union.
Maybe if the economists and professors and editorial writers had some foreign competition, we'd get some fresh thinking on this. That's all I ask.
Maybe I'm just unwilling to face up to the Chinese push. My friend, Michael Dunne of Automotive Resources Asia, the best China auto expert that I know, says only 10,114 Chinese cars were exported last year and mostly the cars went to places like Syria, Egypt and poor African states.
But he goes on: "If you take a snapshot of China's industry today and its tiny overseas shipments, you might conclude that there is little reason to fear China as a future export powerhouse. But when you consider the forces that are transforming China into a highly competitive industry, you can begin to appreciate the zealousness with which Mr. Bricklin is pursuing his dream."
Dunne may be right. But I still don't expect to buy a Chinese car here anytime soon.
PHOTO (COLOR)
~~~~~~~~
By Jerry Flint
Jerry Flint, a former Forbes Senior Editor, has covered the automobile industry since 1958. Visit his homepage at www.forbes.com/flint.
--------------------------------------------------------------------------------
Copyright of Forbes is the property of Forbes Inc. and its content may not be copied or e-mailed to multiple sites or posted to a listserv without the copyright holder`s express written permission. However, users may print, download, or e-mail articles for individual use.
Source: Forbes, 6/6/2005, Vol. 175 Issue 12, p174, 1p
Item: 17134397
Database: Business Source Premier
Section: Backseat Driver Say No to China
Say the government fires its economists and outsources the work to China. Let's see how the Council of Economic Advisers feels about that.
I am getting tired of the China story--the one about the exporting machine, sweatshop of the world, king of toys, brassieres and socks. The next chapter in this story as it is commonly told is that China will become an exporter of cars and trucks and destroy our manufacturing base. When? I can't say, but a few things are certain:
China can't do it by itself. Malcolm Bricklin, who has had some success (he brought Subaru to America) and some failure (remember Yugo?) talks about importing hundreds of thousands of Chinese cars from the tiny Chery automobile company. I say don't hold your breath.
With today's safety and emission regulations and quality requirements, bringing cars into the U.S. is not a simple matter of nuts and bolts and sheet metal. Chinese parts, yes, particularly cast-iron parts, but finished vehicles, unlikely. China must sharpen its automaking skills by importing technologies from the West and Japan.
If you want to see hypocrisy in action, look at some of the auto manufacturers who talk of building cars in China for export to other industrial nations but not to their own.
DaimlerChrysler's top executive in China said the German company wants to build Chrysler products in China, with its $2-or-less-an-hour labor, for export to North America. He wasn't talking about sending cheap-labor Chinese cars to Germany, just to us. Good thing, too, because half the Daimler board of supervisors in Germany represent labor. Why buy trouble? Send those cars to the Yanks.
The damage control bell rang, and the DaimlerChrysler executives over here jumped in and said they aren't looking for any small cars imported from China. We'll see.
Honda, meanwhile, is readying a plant in China aimed at building cars for export to Europe. Honda isn't building cars in China to export to Japan. Perhaps the emperor would be unhappy about Honda's lack of concern for the jobs of citizens of the Land of the Rising Sun. So send them to Europe. Perhaps General Motors should announce it will build a car in China for export but only to Japan, hundreds and thousands of them, very low priced. See how they like it.
The New York Times editorialists attack any thought of reprisal for the flood of Chinese goods as unfair to China and its workers. They always worry about the foreign guy, never the man in the shop here. The editorial board knows something about economics, and economists say free trade is a fundamental principle.
You can't help noticing that the folks supporting free trade never have their jobs threatened: editorial writers, economists, professors. I like to imagine that the President fires his Council of Economic Advisers and outsources the work to China, India or Taiwan. Or, imagine colleges replacing those two-classes-a-week professors with brainiacs from India at $50 a class.
This is fantasy. Right now I would like some fresh thinking on the flood of goods pouring out of China. When I went to school, they taught us that trade was based on comparative advantage. The folks in one place had piles of coal and iron ore, so they could make steel cheaply and we would all benefit using it. Other folks somewhere else had marshland and lots of people, so we would all be better off eating their cheap rice. See, everyone had some comparative advantage.
When I grew up I discovered that sometimes you couldn't find a comparative advantage. The Japanese had no raw materials or cheap energy. They just worked hard, kept their currency cheap and kept the competition out. They didn't have to worry about defending the home market and could concentrate on exports. China's comparative advantage seems to be having enough prison cells for anyone who wants a raise or a real union.
Maybe if the economists and professors and editorial writers had some foreign competition, we'd get some fresh thinking on this. That's all I ask.
Maybe I'm just unwilling to face up to the Chinese push. My friend, Michael Dunne of Automotive Resources Asia, the best China auto expert that I know, says only 10,114 Chinese cars were exported last year and mostly the cars went to places like Syria, Egypt and poor African states.
But he goes on: "If you take a snapshot of China's industry today and its tiny overseas shipments, you might conclude that there is little reason to fear China as a future export powerhouse. But when you consider the forces that are transforming China into a highly competitive industry, you can begin to appreciate the zealousness with which Mr. Bricklin is pursuing his dream."
Dunne may be right. But I still don't expect to buy a Chinese car here anytime soon.
PHOTO (COLOR)
~~~~~~~~
By Jerry Flint
Jerry Flint, a former Forbes Senior Editor, has covered the automobile industry since 1958. Visit his homepage at www.forbes.com/flint.
--------------------------------------------------------------------------------
Copyright of Forbes is the property of Forbes Inc. and its content may not be copied or e-mailed to multiple sites or posted to a listserv without the copyright holder`s express written permission. However, users may print, download, or e-mail articles for individual use.
Source: Forbes, 6/6/2005, Vol. 175 Issue 12, p174, 1p
Item: 17134397
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