Manufacturing jobs going to China

realitykeeper

I came across a video (over an hour in length) about the US hemorrhaging what is left of its manufacturing sector to China. The EU is also facing a similar problem. All the US and EU seem to be doing is propping up the service sector with printed money. Will this trend affect Europe`s future? Is there cause for concern?

Here is the video: https://www.youtube.com/watch?v=fhLBIMwvnYA#t=4.733333

For Reals

#MOD note#
Not suitable.
Closed and moved to economics should they be okay with opening it.

andrew

Unlocked.

andrew

Realitykeeper, seeing as it's a very long documentary, is there any chance you could give a brief summary of it? As in, is its entire point literally that Chinese manufacturing is replacing US manufacturing and that this is bad?

realitykeeper

andrew wrote: »

Realitykeeper, seeing as it's a very long documentary, is there any chance you could give a brief summary of it? As in, is its entire point literally that Chinese manufacturing is replacing US manufacturing and that this is bad?

Sure. According to the documentary, China is not playing fair on several fronts, one being that it is manipulating its currency. China does not dispute this. (Personally I think it is up to the US/EU to counter this by managing their own currencies, instead of complaining about China.)

More pertinent points relate to regulatory standards, for example some Chinese products have been found to contain arsenic or lead. The safety checks and balances are not at the same level as would be required in the US and the EU. Also environmental laws are much more restrictive in the US and EU, thereby adding to the cost of manufacturing but in a necessary way. (I agree with these points but historically, similar problems were commonplace in both American and European manufacturing. China is likely to address these issues in time.) The video also contrasts the mega American companies with smaller manufacturers, and shows why the largest companies are more likely to move abroad than the small/medium sized.

The video, does urge American consumers to choose American products over Chinese products (but I doubt such pleading will save American manufacturing from cheaper Chinese imports).

It also addresses issues such as China stealing american technology (but again I am inclined to think this finger wagging is a waste of time. China will do what China will do). Also, the video points out that the Chinese government tends to favor Chinese companies over foreign companies that move to China and this is used as an argument to dissuade more US companies moving to China.

There is footage of rundown US factory buildings lying idle and a few dire warnings about the future. The video calls on US voters to demand new terms of trade with China and also to demand the replenishment of the US manufacturing base.

Suryavarman

realitykeeper wrote: »

Sure. According to the documentary, China is not playing fair on several fronts, one being that it is manipulating its currency. China does not dispute this. (Personally I think it is up to the US/EU to counter this by managing their own currencies, instead of complaining about China.)

More pertinent points relate to regulatory standards, for example some Chinese products have been found to contain arsenic or lead. The safety checks and balances are not at the same level as would be required in the US and the EU. Also environmental laws are much more restrictive in the US and EU, thereby adding to the cost of manufacturing but in a necessary way. (I agree with these points but historically, similar problems were commonplace in both American and European manufacturing. China is likely to address these issues in time.) The video also contrasts the mega American companies with smaller manufacturers, and shows why the largest companies are more likely to move abroad than the small/medium sized.

The video, does urge American consumers to choose American products over Chinese products (but I doubt such pleading will save American manufacturing from cheaper Chinese imports).

It also addresses issues such as China stealing american technology (but again I am inclined to think this finger wagging is a waste of time. China will do what China will do). Also, the video points out that the Chinese government tends to favor Chinese companies over foreign companies that move to China and this is used as an argument to dissuade more US companies moving to China.

There is footage of rundown US factory buildings lying idle and a few dire warnings about the future. The video calls on US voters to demand new terms of trade with China and also to demand the replenishment of the US manufacturing base.

What do you mean by "manipulating its currency"?

I'm pretty sure that any products imported into the EU and US have to meet our safety standards. If these products are being imported into the EU and US then we need to fund our regulatory agencies better.

What do you mean by "replenishment of the US manufacturing base"? US manufacturing output reached its all time high in the first quarter of the year.

realitykeeper

Suryavarman wrote: »

What do you mean by "manipulating its currency"?

I'm pretty sure that any products imported into the EU and US have to meet our safety standards. If these products are being imported into the EU and US then we need to fund our regulatory agencies better.

What do you mean by "replenishment of the US manufacturing base"? US manufacturing output reached its all time high in the first quarter of the year.

Statistics issued by the US government ought to be taken with a pinch of salt. For example, every month they issue employment data to which the markets react and the following month they invariably revise the data downwards but the markets tend to ignore the more accurate revised figures. You should watch the video. One way China is supposed to have manipulated its currency in the past was by buying US dollars, Euros and other currencies in order to boost the value of those currencies relative to the yuan.

I am surprised you think Chinese manufacturers have to abide by European and US standards. You must have heard about Brazilian beef being imported into the EU without anything like the same level of control or accountability as that applied to European farmers. Why would you think it is different for Chinese manufacturers.

realitykeeper

realitykeeper wrote: »

Statistics issued by the US government ought to be taken with a pinch of salt. For example, every month they issue employment data to which the markets react and the following month they invariably revise the data downwards but the markets tend to ignore the more accurate revised figures. You should watch the video. One way China is supposed to have manipulated its currency in the past was by buying US dollars, Euros and other currencies in order to boost the value of those currencies relative to the yuan.

I am surprised you think Chinese manufacturers have to abide by European and US standards. You must have heard about Brazilian beef being imported into the EU without anything like the same level of control or accountability as that applied to European farmers. Why would you think it is different for Chinese manufacturers.

Why? They do require it for quite a lot of goods

https://en.wikipedia.org/wiki/CE_marking#Product_groups

(Product standards, not Production/Labour standards)

Suryavarman

realitykeeper wrote: »

Statistics issued by the US government ought to be taken with a pinch of salt. For example, every month they issue employment data to which the markets react and the following month they invariably revise the data downwards but the markets tend to ignore the more accurate revised figures. You should watch the video. One way China is supposed to have manipulated its currency in the past was by buying US dollars, Euros and other currencies in order to boost the value of those currencies relative to the yuan.

I am surprised you think Chinese manufacturers have to abide by European and US standards. You must have heard about Brazilian beef being imported into the EU without anything like the same level of control or accountability as that applied to European farmers. Why would you think it is different for Chinese manufacturers.

No, the US statistics shouldn't be taken with a pinch of salt. Your statement about statistics and the market reaction to them displays a complete ignorance of both how statistics are compiled and how financial markets work.

The ECB and Federal Reserve do the exact same thing with the Euro and Dollar. That activity isn't specific to China.

That's a terrible example considering Brazilian beef imported into the EU has to be bred on farms that only export to the EU and have to meet EU standards.

Voltex

realitykeeper wrote: »

I came across a video (over an hour in length) about the US hemorrhaging what is left of its manufacturing sector to China. The EU is also facing a similar problem. All the US and EU seem to be doing is propping up the service sector with printed money. Will this trend affect Europe`s future? Is there cause for concern?

Here is the video: https://www.youtube.com/watch?v=fhLBIMwvnYA#t=4.733333

Reality is that almost every free market economy develops and evolves through an almost Darwinian process of evolution.

Industries form, develop, mature and die - always being replaced by a superior or a more fitting, suitable replacement.

The US economy is worth $15 trillion and China worth $5 trillion....but whats important to understand is that value and wealth creation in a Globalized and free market is never a zero sum game, as if there's a limited, finite amount of global capital. Wealth is endlessly created and redistributed through the economic life cycle and Darwinian process cited above.

realitykeeper

Suryavarman wrote: »

No, the US statistics shouldn't be taken with a pinch of salt. Your statement about statistics and the market reaction to them displays a complete ignorance of both how statistics are compiled and how financial markets work.

The ECB and Federal Reserve do the exact same thing with the Euro and Dollar. That activity isn't specific to China.

That's a terrible example considering Brazilian beef imported into the EU has to be bred on farms that only export to the EU and have to meet EU standards.

I am not sure if you are being disingenuous or if you really believe what you have just said. It may be that you simply accept everything you are told. For anyone to suggest that manufacturing in the US is at an all time high is incredulous.

The EU and US are not buying foreign currency, they are buying government and corporate bonds with digital currency.

realitykeeper

Voltex wrote: »

Reality is that almost every free market economy develops and evolves through an almost Darwinian process of evolution.

Industries form, develop, mature and die - always being replaced by a superior or a more fitting, suitable replacement.

The US economy is worth $15 trillion and China worth $5 trillion....but whats important to understand is that value and wealth creation in a Globalized and free market is never a zero sum game, as if there's a limited, finite amount of global capital. Wealth is endlessly created and redistributed through the economic life cycle and Darwinian process cited above.

The US economy may well be worth $15 trillion but the dollar is in reality worth no more than a few cent. The investor community will in all probability arrive at this realization en masse.

Suryavarman

realitykeeper wrote: »

I am not sure if you are being disingenuous or if you really believe what you have just said. It may be that you simply accept everything you are told. For anyone to suggest that manufacturing in the US is at an all time high is incredulous.

The EU and US are not buying foreign currency, they are buying government and corporate bonds with digital currency.

Once again, I refer you to the graph from the US Federal Reserve which shows US manufacturing output at an all time high as of Q1 2016. If you want to dispute the info in that graph then maybe you could provide contradictory evidence from another, more credible source.

I refer you to the ECB page on Foreign Exchange Operations.

Fathom

Think new technology. Replace old. Robotics key to US transformation. White paper. Robots Fuel the Next Wave of US Productivity and Job Growth. Association for Advancing Automation. October 2015. Link: http://www.a3automate.org/docs/A3WhitePaper.pdf