US, state sponsor of terrorism: Analyst

[VCheng]

It was the spanking given to the overhyped and highly overrated US military in the Korean War. Then we thumped you in the Vietnamese war
But I guess according to the propaganda you've been brainwashed with, the US military is still undefeated right?
Dream on...

Okay!

The American Dream lives on!

 

[Mao1949]

Sorry to f*ck with your wet dream but China has about 250 million people doing O.K. ....but it has over A BILLION that doesn't have a pot to piss in. And that's the way it'll stay because China can't possibly create enough decent jobs for them all. And as wages rise in China, we'll see manufacturing move out to somewhere cheaper. For the price and the poor quality, and the shipping distance we'll easily find another manufacturer more suited to our needs. And lets not forget the social uprising that's going to happen in China. We're seeing it start already with the Muslims. Good luck with that, chief.

Manufacturers Are Leaving China, But Where Are They Headed?
Tue, 01/28/2014 - 10:59am
Tia Nowack, Associate Editor, Industrial Maintenance & Plant Operation
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Seeing China’s manufacturing sector shrink is a trend that excites Americans, although it may not actually alleviate much of the pressure around a U.S. unemployment rate of 7.3 percent ( it's actually down to 6.3 % now ). The reality, according to many experts, is that the phenomenon is more one of nearshoring than reshoring, as many of these businesses — along with their jobs — head to Mexico.

The competitiveness of offshoring has been declining for years, as China has faced increasing wages and currency costs, as well as higher fuel and transportation costs. There are also many hidden costs and risks that are difficult to anticipate. According to Jason King, Vice President of global business firm AlixPartners, “companies are waking up to the harsh reality that manufacturing offshore in places like China and other low-cost countries is costlier than it initially looked.”

In fact, by some estimates, manufacturing in China will cost as much as manufacturing in the U.S. as soon as 2015.

Why Mexico?

Unlike China, Mexico continues to boast low labor costs and has a huge advantage in terms of proximity to the American market. That said, finding out how many American companies are manufacturing in Mexico is surprisingly difficult. According to Mario Vidana, Senior Trade Specialist with the U.S. Department of Commerce, there are no public directories for Foreign Direct Investment (FDI) companies established in Mexico. In order to obtain this information, you would need to contact the chamber of commerce or industry chamber in each state. Vidana also warned that they are often reluctant to share this information.

So while the exact number of U.S. companies that are relocating their factories to Mexico is unknown, it does appear that the trend is especially apparent in the automotive, aerospace, and textile industries. In an interview with Entrada Group, King points to several key benefits of producing in Mexico compared to China. These benefits include lower transportation and warehousing costs, an improved ability to respond to customer demands, a better control of intellectual property, the ease of proximate time zones between management and production, and the cultural similarities between the U.S. and Mexican markets.

Paula Ramos, Marketing Director at MFI International, echoes many of these advantages, the greatest being the proximity to American markets. MFI International provides manufacturing services in the Juarez, Mexico region that ease collaboration between U.S. companies and Mexican manufacturers. She specifically cites the benefits of working in the border region of Mexico, where there are concentrations of skilled workers and industry.

“You get the benefits from the lower labor rates in Mexico, and you can have your products within the same day. We have cases where we can place an order in the morning and the product comes back to an El Paso facility that afternoon,” Ramos says. “It’s almost like being in the U.S.”

To Ramos, this quick turnaround is what defines nearshoring. “I talk to companies that say ‘nearshoring’ and then mention factories in Columbia and Central America — that’s still far.”

According to Ramos, manufacturing in Mexico is being developed in “clusters” which are often incentivized by the Mexican government. The skilled workforce is available throughout Mexico, and different cities are working to attract different types of investments. Nissan, for example, recently opened a plant in Aguascalientes, which will attract suppliers and OEMs to that region. There are a large number of automotive and aerospace companies moving south, which is building up new clusters, she says.

Smart Investments and Contentious Plans

The Mexican government is incentivizing manufacturing on Mexican soil by making wise investments, according to Ramos. The government is primarily financing improvements to national infrastructure and roads to ease the flow of trade. They have also worked for years on building trade agreements globally, and now hold agreements with 44 countries that allow duty-free trade, she says.

The government has also invested in the education of its people, turning out a prepared, bilingual workforce. According to the United States Embassy in Mexico, more Mexicans — almost 100,000 more — earn engineering degrees annually than Canadians and Germans. These skills are attractive to U.S. companies, especially for a lower price tag than at home.

While the Mexican government has made some smart investments, not all of their recent decisions are going over well with manufacturers. On November 1, Mexico’s congress passed a tax reform measure that will make changes to customs practices and raise the value-added tax (VAT) on export assembly plants in the border regions.

Ramos says that MFI is waiting until the end of the year to see what the final resolution is before making a formal statement, but compares the contentious proposal to health care reform in America.

Currently, a major benefit of producing in Mexico versus in China is avoiding a high VAT. As the system stands now, companies import materials duty free, transform those materials into a product in Mexico, and export the finished product back to the U.S. with zero, or very few, duties. The new VAT would change the way taxes are calculated, and the manufacturing (Maquiladora) industry is lobbying very hard against it.

Another concern that has deterred some companies from manufacturing in Mexico is the ongoing, publicized, drug related violence. Ramos said that this fear is not particularly relevant to manufacturers because of the nature and location of the violence. In Mexico, most manufacturing is done in industrial parks that are gated and secured. “Most manufacturers, like MFI, will arrange transportation for workers from their living areas to and from their workplace,” she says.

What Does This Mean For American Manufacturing?

Ramos says the decision to manufacture in the U.S. or Mexico should be based on the type of product a company manufactures. To Ramos, “reshore products” have lower labor requirements and involve a more automated type of manufacturing. On the other hand, “nearshore products” have higher labor requirements, involve more manual operations, and allow a company to compare labor costs between China and Mexico.

“I strongly believe North American companies should take advantage of nearshoring labor-intensive operations by establishing production sharing between the U.S., Canada, and Mexico, and boosting economic activity within the region,” she says.

As Ramos explains, forty percent of Mexico’s exports to the United States consist of components made in the United States, primarily for the automotive industry. In China, that number drops to less than eight percent. By that logic, increasing Mexico’s manufacturing industry directly stimulates manufacturing jobs in the U.S. In turn, creating jobs in Mexico stimulates the Mexican economy, which increases Mexican imports from the United States.

And for Ramos, this is the best part of her job.

“It feels very good, when you start talking to a company and explaining all of the benefits [of producing in Mexico], and then you walk out on the production floor and you see us hiring more and more workers,” she says proudly.

“It’s really about keeping the workers happy, and if you’re doing that by helping companies save some money and become more competitive, that’s a great match.”

Chart of the week: who makes China’s exports – local companies or foreign?

Another month of disappointing China trade data: on Monday, overall Chinese exports increased just 2.7 per cent in August from a year earlier, and imports dropped 2.6 per cent. Export growth was higher than July’s worrying 1 per cent, but it’s still far from the double-digit growth that was once the norm.

So which companies are providing China’s exports, and where will growth come from in future? Chart of the week takes a look.

While exports may be slowing, those of foreign-invested enterprises are shrinking particularly fast, contracting at an annual rate of 5 per cent in July. But this is not a new trend. As the chart below shows, foreign companies (which include Sino-foreign contractual joint ventures, Sino-foreign equity joint ventures, and foreign-owned enterprises) are declining as the engine of exports, from nearly 60 per cent in 2006 to just over 50 per cent this year.

State-owned enterprises have been declining as a driver of exports for much longer – since before the mid-1990s. It’s local private enterprise that is taking up the slack. If the trend continues, private enterprises will be the main source of Chinese exports within three years.



Export growth of foreign-invested enterprises is still quite strong in Beijing and Guangdong, where the growth rate on a rolling 12-months basis was over 10 per cent in July, but was stagnating in other cities including Shanghai and Tianjin.

However, all six cities for which data is available show a higher growth rate of exports than the national average, indicating that foreign-invested companies in the lower-tier cities had a poorer export performance.

The diminishing role of foreign enterprises in exports reflects a decling in the registration of new foreign-linked enterprises in China, particularly those coming from other Asian economies.

According to the Chinese ministry of commerce, from January to July 2012, newly-approved foreign-invested enterprises amounted to 13,677, down by 12.3 per cent over the same period the year before.

The number of newly-established enterprises funded by the top 10 Asian economies investing in China – namely Hong Kong, Macao, Taiwan, Japan, the Philippines, Thailand, Malaysia, Singapore, Indonesia and South Korea – was down by almost 15 per cent in this period.

At the same time, the registration of US-funded companies fell by only 4 per cent, while for those funded by EU countries it was marginally up.

Simon Rabinovitch, the FT’s Beijing Correspondent, said: “Exports by private-invested companies took off after 2001, the year of China’s accession to the WTO. That makes sense – companies that do well in tradeable goods must be competitive on an international basis, and many of China’s private entrepreneurs have fit the bill. What’s more, the restrictions on investment in export-related industries, from electronics to textiles, have been much lower than in the domestic industries dominated by SOEs, such as commodities and finance.”

Rabinovitch added: “As for foreign-invested enterprises, multinationals have less reason to use China for global production as its costs rise. They are still investing in China, but the rationale is shifting towards using production in China to feed Chinese demand, rather than global demand.”

 

[The SC]

The US is the sole superpower in the world and will continue to be well into the future, and there is nothing that you or the Chinese can do about it. While China will be a power in world affairs, having a large economy alone doesn't make you a superpower. Even when the day comes that China surpasses the US overall GDP, the standard of living will still be far higher here in the US as evidenced by our GDP per capita. China is already showing cracks in its slowing economy and faces enormous internal challenges such as endemic corruption, soaring debt through its shadow banking system, atrocious environment, and the beginning stages of a demographic workforce crisis in the coming decade.

Chinas military is currently 20-30 years behind and will never be able gain superiority, much less be on par, with overwhelming US military capability, so you can forget that nonsense.

You want to know what makes the US a true superpower? It's allies and soft power, something of which China has little of and will never be able to fully reach as long as your ruled by the CCPs lash.

Well friend, the US had built it overseas friendships for a long time based on mutual trust and real friendship values. Today it has lost that attraction/edge, and many of its long term genuine friends have lost that trust. So, I think you are the one who is living in a daydreaming environment. Every article on the net and in serious books and magazines contradicts what you are saying 100%, it is like if you were projecting all the US shortcomings on China.
Too bad, but America has lost the edge since the beginning of its zionisation in the 90's and a bit before that.

 

[F-22Raptor]

Another paid CIA troll. Welcome

Nope, the US was throughly defeated and humiliated. Korean War was not stalemate, that was a thumping. It's a 'stalemate' only in the propaganda books in US schools and the regime's propaganda mouthpieces to save face. The US was at the Yalu river before China entered the war and was kicked out of North Korea by the end of the war. China gained far more land than we lost from the moment we entered the war, that's a victory for China. It's irrelevant how many lives were lost or how much military equipment was lost. The bottom line is that at the start of the war, North Korea was under US control, and by the end of the war the US was no longer in North Korea thanks to the Chinese Volunteer Army defeating the US military and its 16 allies. That's a clear cut victory for China.

And yes, US definitely fears China due to our size. China's sheer size intimidates the US and whats worse is that we have an independent foreign policy and can take decisions by ourselves without kowtowing to the thuggish US regime. US has never really been challenged until China came up. As China continues to rise, the US knows its time at the top is over. This is why the US is so paranoid of China's rise. With China's rise the monopoly positions of the US is ending and the US loses the leverage it had over others.



It was the spanking given to the overhyped and highly overrated US military in the Korean War. Then we thumped you in the Vietnamese war

But I guess according to the propaganda you've been brainwashed with, the US military is still undefeated right?

Dream on...

A clear cut victory? Chinese forces had entered the South and surrounded Seoul. You were then repelled, and forced to retreat back into the north, where for the next two years Chinese forces attempted counter offensives and were blunted even with a far superior numerical advantage resulting in a stalemate which we still see today along the DMZ. The only reason for your initial success was because MacArthur didn't expect the Chinese to enter the war.

As for your final bit, your drivel is nothing but worthless hot air. It's obvious to everyone here that you have an inferiority complex and an unhealthy obsession with the US. The US has faced far greater threats in its history than China. We don't fear anyone, and never will.

 

[Mao1949]

The US is the sole superpower in the world and will continue to be well into the future, and there is nothing that you or the Chinese can do about it. While China will be a power in world affairs, having a large economy alone doesn't make you a superpower. Even when the day comes that China surpasses the US overall GDP, the standard of living will still be far higher here in the US as evidenced by our GDP per capita. China is already showing cracks in its slowing economy and faces enormous internal challenges such as endemic corruption, soaring debt through its shadow banking system, atrocious environment, and the beginning stages of a demographic workforce crisis in the coming decade.

Chinas military is currently 20-30 years behind and will never be able gain superiority, much less be on par, with overwhelming US military capability, so you can forget that nonsense.

You want to know what makes the US a true superpower? It's allies and soft power, something of which China has little of and will never be able to fully reach as long as your ruled by the CCPs lash.

US economy crashed in 2008 and still in unofficial recession. US has been in decline for 20 years and that process has started to dramatically accelerate since the massive financial crash. The US has been running on a massive bubble economy that went from the stock market bubble to the housing bubble to the current bond bubble.
This is why US interest rates are still at 0% and still needs billions of QE just to get even 1% growth. The staggering debt levels according professor Lawrence Kotlikoff is over $400 TRILLION in debt, the US is bankrupt to the core. This is why labour force participation is at record lows and jobs being created are part time as the US economy is stagnant.

It's nice to day dream about superpower this and hyper power that but China has already surpassed the US in many categories from production to consumption. China has the capital, technology, markets, resources, talent pool and labour force to be a massive power. US might be bigger or stronger than others, but not against China at even 25% of our capacity.

Standard of living will be higher in the US but China will be nationally stronger than the US due to our sheer size. National power is far more important than standard of living in the world of geopolitics. I'd rather have China's national power than Singapore's standard of living.

US military is nothing special with defeats in Korea and Vietnam and it only defeated countries with barely a functioning army over the past 20 years. The US has never defeated the PLA and never ever will. The only 'victories' the US has over China will be in computer simulated games and in the propaganda books at US schools to brainwash the young American minds. Chinese military is closing the gap fast which means the US can never ever use its military option. China is catching up faster than the US can move ahead and as the US economy deteriorates further, the US military will suffer. You can forget about the nonsense of the US defeating China in the future. Never ever happened before and never ever will in the future.

Soft power means jack without hard power.

 

[Aepsilons]

A clear cut victory? Chinese forces had entered the South and surrounded Seoul. You were then repelled, and forced to retreat back into the north, where for the next two years Chinese forces attempted counter offensives and were blunted even with a far superior numerical advantage resulting in a stalemate which we still see today along the DMZ. The only reason for your initial success was because MacArthur didn't expect the Chinese to enter the war.

As for your final bit, your drivel is nothing but worthless hot air. It's obvious to everyone here that you have an inferiority complex and an unhealthy obsession with the US. The US has faced far greater threats in its history than China. We don't fear anyone, and never will.

I also would like to add that MacArthur was a proponent of using the nuclear bomb on China during that military campaign.

 

[Mao1949]

All US innovation done before the 2000s? What? The US is largely responsible for the smartphone and social media revolution that is still ongoing today. We're also undergoing an energy boom due to innovation in our energy sector. We also lead the world in medical research and higher education. China has nothing that can compete with Silicon Valley or the global influence of Google, Apple, Amazon, Microsoft, Intel, IBM, HP, Dell, Cisco, Ebay, Oracle, Netflix, Facebook, Twitter (the last two being banned in China). China can't even compete with Japan or South Korea which are both global tech powers. So your assertions are laughable and have been shattered. Judging from your other posts, you are one deluded human being.

Smartphones were innovated way before Apple's iPhone. China has social media too. We too are getting energy from our shale oil and gas. China has our own equivalent to nearly all the US tech companies with companies like Baidu, Xiaomi, Alibaba, Kylin, Lenovo, YonYou, Kingdee, Qihoo 360, Kingsoft, Rockchip, HiSilicon, Loongsoon, Huawei, ZTE, Inspur, Sugon, Tencent, etc

Your assertions that China don't have its own brands it not only laughable but highly ignorant.

 

[F-22Raptor]

Well friend, the US had built it overseas friendships for a long time based on mutual trust and real friendship values. Today it has lost that attraction/edge, and many of its long term genuine friends have lost that trust. So, I think you are the one who is living in a daydreaming environment. Every article on the net and in serious books and magazines contradicts what you are saying 100%, it is like if you were projecting all the US shortcomings on China.
Too bad, but America has lost the edge since the beginning of its zionisation in the 90's and a bit before that.

The US has lost its attraction and edge? Why don't you go tell that to the Eastern European and East Asian countries that are embracing the US and NATO in the face of Russia and China. If you honestly believe that any country has the network of alliances that the US can boast than your delusional.

Your last sentence tells me all I need to know about your stance on matters.

 

[Mao1949]

A clear cut victory? Chinese forces had entered the South and surrounded Seoul. You were then repelled, and forced to retreat back into the north, where for the next two years Chinese forces attempted counter offensives and were blunted even with a far superior numerical advantage resulting in a stalemate which we still see today along the DMZ. The only reason for your initial success was because MacArthur didn't expect the Chinese to enter the war.

As for your final bit, your drivel is nothing but worthless hot air. It's obvious to everyone here that you have an inferiority complex and an unhealthy obsession with the US. The US has faced far greater threats in its history than China. We don't fear anyone, and never will.

Let's look at who had the net gain of land in the war shall we...

You lost North Korea, we gained North Korea. Yea we didn't get South Korea, but you had a net loss of land and we had a net gain of land over the overrated US military.

With all the allies, with all the technology, with all the equipment and with all the money...you got driven back by the People's Volunteer Army. China at it's weakest made a complete and utter mockery of the US military at its peak power with 16 of its allies giving the US back up. Even with all that advantage you still got your arse whooped

 

[The SC]

The US has lost its attraction and edge? Why don't you go tell that to the Eastern European and East Asian countries that are embracing the US and NATO in the face of Russia and China. If you honestly believe that any country has the network of alliances that the US can boast than your delusional.

Your last sentence tells me all I need to know about your stance on matters.

Good for you, at least you got that one.

 

[VCheng]

Let's look at who had the net gain of land in the war shall we...

You lost North Korea, we gained North Korea. Yea we didn't get South Korea, but you had a net loss of land and we had a net gain of land over the overrated US military.

With all the allies, with all the technology, with all the equipment and with all the money...you got driven back by the People's Volunteer Army. China at it's weakest made a complete and utter mockery of the US military at its peak power with 16 of its allies giving the US back up. Even with all that advantage you still got your arse whooped

And yet, a few phones calls from WalMart, and China had to let the US Orion go.

How's that for power?

 

[Mao1949]

The US has lost its attraction and edge? Why don't you go tell that to the Eastern European and East Asian countries that are embracing the US and NATO in the face of Russia and China. If you honestly believe that any country has the network of alliances that the US can boast than your delusional.

Your last sentence tells me all I need to know about your stance on matters.

It's more to do with fearing US hard power than actually supporting the US. As China rises in its hard power strength and the US no longer has the monopoly on capital, technology, markets, currency, weapons, aid, etc you will see less and less countries willing to bend to US thuggery and bullying.

US allies are countries that don't want to confront the US fearing a loss of American capital, access to US technology, access to US market, access to US Dollar, access to US weapons, access to US aid. Once the US is no longer the only country that can provide these things, the US will gradually lose its influence. This is the primary reason why I said the US fears China. If the US no longer has that leverage over everyone, it's power and influence diminishes. China can replace all those things the US provides thus giving smaller countries an alternative.

And yet, a few phones calls from WalMart, and China had to let the US Orion go.

How's that for power?

You mean after we took the aircraft apart and took all the technology and gave it back in pieces

US only buys 18% of total Chinese exports and the total US consumption of Chinese goods contributes about 1% to our growth rate. Pretty insignificant now that Chinese consumption is already replacing foreign consumption.

We could collapse the entire US economy with the treasuries we hold and the liquidity we absorb from the Fed's QE which keeps US inflation low as China sterilises those dollars.

 

[VCheng]

...........
We could collapse the entire US economy with the treasuries we hold and the liquidity we absorb from the Fed's QE which keeps US inflation low as China sterilises those dollars.

Could. Will.

When you actually DO something, please let me know.

 

[Mao1949]

Could. Will.

When you actually DO something, please let me know.

We are DOING something, ending US hegemony with each passing day

You can't stop the rise of China

 

[VCheng]

We are DOING something, ending US hegemony with each passing day

You can't stop the rise of China

Yes, it is best to let the yeast ferment and let the dough rise before putting it in the oven. Makes great bread!