Should us Europeans only buy European?

murphaph

Considering China is taking more and more manufacturing from us, should we make more effort to buy EU goods and keep jobs and wealth here?

I believe we should because big business doesn't seem to give a fcuk about our jobs and will keep offshoring manufacturing and service jobs until so many people in the western world are unemployed there'll be nobody in a position to by any of their damn products. We can't survive in a 100% service oriented economy.

I try to buy EU but it's so damn hard when it comes to textiles etc.

I've nowt against Chinese or anywhere else but I as a degree qualified engineer feel that my job is only as secure as long as somebody in China etc. can't do it cheaper. Just look at what Siemens are doing with their mobile phones division.

Quantum

I agree to a point. We should always be conscious about what we spend our money on. If we have a reasonable choice we should be loyal first to our own country, then to the EU. I don't believe there ever will be such a thing as a 100% servicve economy - but as long as wages are high here we will always have a problem.

Hobbes

murphaph wrote:

Considering China is taking more and more manufacturing from us, should we make more effort to buy EU goods and keep jobs and wealth here?

Sure if you dont mind buying overpriced crap as opposed to cheap crap. Thats the choice you have to put up with and I doubt a lot of people would want that.

Btw.. take from us? More like already taken. There was a show on UTV a couple weeks back on China production. Pretty much everything comes out of china. Even outsourced software development to India is being outsourced to China. China manufactures 90% of the worlds toys and the majority of electronics (if its not made there, the parts are).

Red Alert

I think we have to first think economics - i.e. if there's a european apple for 70c and a non-euro one for 60c then i'll take the non-euro one. I tend to buy Irish rather than European where possible but that's just because that's what I always did.

There are also some countries I won't buy from on principle such as Israel, simply as I don't want to fund their war/nuclear machine which opresses their neighbours.

murphaph

Quantum wrote:

...but as long as wages are high here we will always have a problem.

That's what big business says. They pay €50 a month to women who make socks in China (on the news this evening) so we're never gonna be able to compete in that way. I know I sound like some commie but it's just the pace of offshoring lately. It seems companies can't move their manufacturing to China fast enough now. What I'm saying is should we tell big business to fcuk their offshoring our jobs by refusing to buy sh!t made in China etc. I'm not trying to keep anywhere down but China in particular is 'cheating' because they don't allow their currency to fluctuate with the rest of the world. I really am not a commie! I now how this post reads to the casual reader (poster==nutter).

Hobbes

How do you apply that logic to businesses that have outsourced to Ireland? Do you stop buying thier stuff because they aren't Irish or do you try to dictate what they should do?

murphaph

Hobbes wrote:

How do you apply that logic to businesses that have outsourced to Ireland? Do you stop buying thier stuff because they aren't Irish or do you try to dictate what they should do?

Good point. I work for one of those companies so I'll say that right off the bat. I don't know, I certainly haven't fleshed all this out-I was just putting it out for discussion. I hate to sound like I'm trying to screw poor chinese people. I'm genuinely concerned that the economies of the EU (let's not pretend we're immune) are heading down the pan in no small part because of cheap imports. Big companies don't care where their stuff is made, so long as it's cheap. If we keep buying chinese where will it end? It's all well and good saying R&D and a 'knowledge based economy' but realistically, a lot of people are incapable of these jobs and without manufacturing type jobs would be pretty screwed. In any case, the chinese/indians can R&D wth the best of us and for a lot less. That was a bit of a wandering one.

Hagar

murphaph wrote:

They pay €50 a month to women who make socks in China (on the news this evening)

Your telly was probably made in China....

magick

i agree , to a point, in the USA its the same point except they take it much further , though however saying that everything is made in china these days , though when their standard of living begins to rise some other country will step up to the plate to make the worlds crap, east timor perhaps?

murphaph

Hagar wrote:

Your telly was probably made in China....

Jesus I had to check that! It's made in Japan. Most european made TVs are long gone now, remember Telefunken and Nordmende! Fcuking bombproof tellys, but that's a side issue.

Honestly guys, I'm not talking about 'keeping the chinks down' or any other racist nonsense. I'm talking about looking after ourselves and our kids' futures in this part of the world by buying goods made by ourselves and telling big business (who's CEOs are not concerned about the long term future of EU jobs but rather the short term dividend to their shareholders) where to go. I sound like a right union head, resplendant in beard and Jim Larkin clenched fist-I've never even been a union member!!

mike65

Trade war yipee! We all loose. If an individual wants to make a choice based on whatever then fine go ahead and boycot Made in China goods but as a national policy it has little to reccomend it. If only cos at 4 milion ppl China would'nt notice if we all dissapeared. I sometimes fret (yes I do) about the migration of nuts and bolts manufacturing but then realise that, a) we do still make stuff and, b) have been moving up through the food chain quickly for the last 2 decades and that this country only ever had a minor industrial sector to start with.

Once if you wanted to by a radio it was from Philips, Pye, Bush or Grundig and was made of wood or bakelite with pre-war techology and design. Then Sony etc started exporting thier new fangled metal boxes and we loved them as they were cheap and had more buttons. That they were cheap meant we saved money so could buy something with the change and so we got richer as Sony got richer. Some ppl lost thier jobs but more got jobs as the consumer age was born [con't page 94].

Mike.

murphaph

I'm not talking trade wars. I'm talking individual euopeans choosing to buy european made goods. We do export to China of course, but only specialised equipment that they don't (yet) make there.

I totally understand the conventional argument of raising standards of living gradually (Japan being the classic example-remember Honda civics being smashed to sh!t by workers in Detroit in the 70's?) but the global population is growing, and it's not growing in Europe. It's growing in Asia. There will quite likely be a cheap flow of labour into factories in China and India indefinitely, so long as their populations continue to boom.

Victor

murphaph wrote:

I'm not trying to keep anywhere down but China in particular is 'cheating' because they don't allow their currency to fluctuate with the rest of the world.

The Yuan is tied to the dollar, not the euro - and you can't say the euro doesn't fluctuate against the dollar.

murphaph

Victor wrote:

The Yuan is tied to the dollar, not the euro - and you can't say the euro doesn't fluctuate against the dollar.

Sure, but if it was a real currency that fluctuated with all currencies things might be a bit fairer. The chinese government are under severe pressure from the US to allow it fluctuate, but so far have refused to budge. The Yuan fluctuates with the Euro based on US/Euro relationships-that's not a relationship, that's an accident. The dollar gets cheaper to borrow with a fed rate cut and chinese goods are cheaper in the shops because the US economy is in need of stimulation by the fed :eek:

mike65

One might almost lament the passing of the Gold Standard. Well not really.

Mike.

sceptre

murphaph wrote:

Jesus I had to check that! It's made in Japan.

You sure it's not just assembled in Japan? Even the electronic goods made in Ireland and specifically labelled as such (and yes, I'm thinking in particular of computers "made in Ireland" that are made in Limerick) are really just assembled here with almost entirely Chinese manufactured parts (except for the processors, most of the optical drives and the odd occasional part or two).

Side-issue obviously, the main discussion may well be interesting.

BlitzKrieg

just thinking very simplistic economics...so gonna be many mistakes.

A made in china product for sale here for example a toy goes for x amount...now how much of that goes back to china?

One thing i always got confused about is *Big Buisness* and *The man* i'm sorry but if i want to see them i look in the mirror. A large portion of the staff of big buisness are European and American and the while yes Asia fills up a large chunk of the manufacturing, but all the superficial positions from advertising to vice -co-president of donegal branch of whatever are filled by irishmen and europeans. We are the ones who sell these products back to ourselves, they are not sold to the manufacturers in china, they are sold by europeans to europeans and americans to americans and so on. so these companies will always have work for europeans.

Someone tell me if this is right or wrong? Europe is one of the largest markets in the world? For electronics cars and many other products...if big buisness puts too much of europe out of work they'll have to create a bigger market elsewhere to ship their goods to, so it doesnt suit them to completely cut europe out.


Now i'm talking out of my arse and going to bed.

bonkey

Victor wrote:

The Yuan is tied to the dollar, not the euro - and you can't say the euro doesn't fluctuate against the dollar.

I know this is dangeroulsy asking the thread to go off on a tangent but....

if the yuan is tied to the dollar, is its strength/performance taken into account in valuing the dollar? Or is it entirely ignored?

jc

Hobbes

bonkey wrote:

I know this is dangeroulsy asking the thread to go off on a tangent but....

if the yuan is tied to the dollar, is its strength/performance taken into account in valuing the dollar? Or is it entirely ignored?

jc

I think you would be a fool not to factor that in. Heck even factor in the other currencies.

bonkey

bonkey wrote:

if the yuan is tied to the dollar, is its strength/performance taken into account in valuing the dollar? Or is it entirely ignored?
jc

Now that I definitely don't know except to say when the Irish pound was tied to sterling pre 1979 iirc its value mirrored that of sterling.
I would guess that when a currency is tied to another it would be fixed in relation to it, ergo its value towards all other currencies would move in the same way as the currency its fixed to.
That would be the purpose of the fixing, ie to insulate it against fluctuations in its own economy's standing along with in the case of China|U.S a pinch of certainty given the trade situation between the two countries.
Meaning also chinese goods should feel a slight pinch soon here, what with the Euro having fallen to $1.23 from a high of over $1.30

disillusioned

In my opinion one should buy Irish as often as economically possible. After that, one should try to buy European. It can be difficult to buy either in some of the major supermarket chains but if we all make a small effort then it's better than nothing.

Meh

http://www.economist.com/markets/displayStory.cfm?story_id=4033868
The euro area has 31.1% of the world's exports, China has just 5.9%. Protectionism and trade wars would hurt us a lot more than it would hurt them.

bonkey wrote:

if the yuan is tied to the dollar, is its strength/performance taken into account in valuing the dollar? Or is it entirely ignored?

I'm sure currency traders take the strength of the yuan link into account when deciding whether to buy or sell dollars. If the Chinese government hinted it was going to end the link, the dollar would fall. So yes, it does affect the value of the dollar.

bonkey

Earthman wrote:

Now that I definitely don't know except to say when the Irish pound was tied to sterling pre 1979 iirc its value mirrored that of sterling.
I would guess that when a currency is tied to another it would be fixed in relation to it, ergo its value towards all other currencies would move in the same way as the currency its fixed to.

Yes, but currencies move relative to each other based on the usual factors, much of which notionally comes back to the strength and stability of the underlying economy.

For simplicity, I'm just going to refer to the price being determined by the attractiveness of the currency in the following...

Lets say that China's economy is 25% that in size of the US, but is Do we calculate the dollar (relative to all non-tied currencies) on dollar-attractiveness, or on, say:

(dollar-attractiveness + (.25 * yuan attractiveness) / 1.25

My point is that while its irrelative to the Americans, it effects the rest of us quite a lot...or should do, and I'm not sure it does.

jc

SkepticOne

The majority will buy whatever represents best value. It is unrealistic to expect otherwise. We need to get used to this idea and try and move up the food chain and export to China and India those products and services that they at present can't produce well at present. Protectionism can give a short-term boost to jobs but in the long run leads to inefficiencies and eventual unemployment as the economy loses touch with world requirements. Ireland has done far better as an extremely open economy than when it tried to go it alone.

Quantum

Yet no one has mentioned protectionism except to object to it - correctly.

What has been suggested is simple loyalty in an every day practical way to the best of one's ability when reasonable. Buy Irish first, EU second.

It makes perfect sense.

bonkey

bonkey wrote:

Lets say that China's economy is 25% that in size of the US, but is Do we calculate the dollar (relative to all non-tied currencies) on dollar-attractiveness, or on, say:

(dollar-attractiveness + (.25 * yuan attractiveness) / 1.25

My point is that while its irrelative to the Americans, it effects the rest of us quite a lot...or should do, and I'm not sure it does.

jc

Thats an interesting theory and I have to say I'm away from economics too long to be able to answer it confidently or at all.
I have in the back of my head somewhere though the notion that the larger Economies currency value couldn't or shouldnt be calculated in anyway by what is going on in the smaller Economy,given that it is the smaller economy that should be chasing the larger economy.

Thats also what is going on when their currencies are pegged-except the "chase" is seamless because action is taken immediately to make it so OR the speculation simply doesnt or can't happen because of automatic intervention making speculative attacks unworthwhile.

The pegging iirc can be brought about by the guarantee that the minor currencies value will be fixed in relation to that of the major currency by a Government or central bank buying or selling reserves of currency to make it so.
Obviously as the dollar fell in value,the job of the chinese to keep their currency in step with it would be easier.*

*This is the theory running in my head,I could of course be wrong and I'd be hoping that there would be enough people with Economics as their speciality here to clarify and answer the question properly.
I can split this aside if you want as I find it interesting and its still political and there would be more chance of someone from a finance/currency background seeing it.

murphaph

Quantum wrote:

Yet no one has mentioned protectionism except to object to it - correctly.

What has been suggested is simple loyalty in an every day practical way to the best of one's ability when reasonable. Buy Irish first, EU second.

It makes perfect sense.

Yup, I never mentioned tarrifs or anything like it. Just should we europeans buy more stuff from one another to help keep us all in jobs? The protectionist idea is flawed because economies get lazy without a threat of competition.

CEOs of large corporations do not think 30+ years down the line. They think in short-medium terms and they do not have the best interests of the european people at heart. If they did then why do so many large corporations maintain tax-residency in low/no tax jurisdictions and avoid paying tax in their homelands? (Hint, to make more money).

The real issue here is population growth folks. We have a stagnating population while Asia has a booming one, thus ensuring a plentiful supply of cheap labour for the forseeable.

SkepticOne

But any objections to protectionism, correct or otherwise, also apply to what is proposed here - a form of voluntary protectionism.

murphaph

SkepticOne wrote:

But any objections to protectionism, correct or otherwise, also apply to what is proposed here - a form of voluntary protectionism.

I don't think so. If it's not official China can hardly retaliate with import tarrifs on EU goods so it's up to the Chinese to buy Chinese on an individual basis. They probably already do for a huge amount of their everyday needs and only pretty specialised stuff comes from outside China.

Is nobody else even slightly worried at the numbers of jobs being lost to China etc? Ok, we're supposed to move up the food chain, but not everyone is capable of these jobs and without manufacturing (there are only so many service jobs going to be available) jobs there will be a larger body of people who will need to be taken care of on social welfare.

There are parts of East Germany with 20%+ unemployment. These people haven't moved up the food chain from losing their manufacturing jobs when they were exposed to far higher levels of productivity in the west. We are being exposed to far higher levels of productivity AND lower labour costs. If Germany was unable to accomodate their out of work in higher food chain jobs then what hope is there for the EU as a whole?

Of course German productivity rates are the lowest in Europe (if you look at the cost of labour as the principal component) but there's no point in talking about Ireland like it's a seperate entity from the EU-if the EU economies sink we will too because there will be no market for our goods (China might buy Kerrygold from us but not a whole lot else compared to what we buy off them).

If population growth was level around the world there would be no issue long term because (hopefully) wealth would eventually be distributed evenly, but that's not the case. SE Asia will continue to supply hge numbers of cheap labour. perhaps this cycle will only end when enough folks are out of work in the west and cannot afford to buy anything anymore. We might return to an agrarian society :eek:

Meh

murphaph wrote:

I don't think so. If it's not official China can hardly retaliate with import tarrifs on EU goods so it's up to the Chinese to buy Chinese on an individual basis.

And if Europeans can do that on a large enough scale to make a difference, then so can the Chinese.

There are parts of East Germany with 20%+ unemployment. These people haven't moved up the food chain from losing their manufacturing jobs when they were exposed to far higher levels of productivity in the west. We are being exposed to far higher levels of productivity AND lower labour costs.

This is incorrect. Productivity in China is far, far lower than in the West. Think about it: it doesn't make sense to invest in productivity-enhancing automated machinery and computers when the cost of labour is so low. Instead of buying a forklift truck for $20k, just hire a dozen labourers for $1 a day.

Of course German productivity rates are the lowest in Europe (if you look at the cost of labour as the principal component)

Why would you do that? Productivity is counted per worker or per hour worked, not per € pay.

If population growth was level around the world there would be no issue long term because (hopefully) wealth would eventually be distributed evenly, but that's not the case. SE Asia will continue to supply hge numbers of cheap labour. perhaps this cycle will only end when enough folks are out of work in the west and cannot afford to buy anything anymore. We might return to an agrarian society :eek:

No matter how cheaply the Chinese can produce goods, it will always be advantageous for them to buy imports from us (even goods that they can produce more cheaply themselves). http://en.wikipedia.org/wiki/Comparative_advantage

murphaph

Meh wrote:

No matter how cheaply the Chinese can produce goods, it will always be advantageous for them to buy imports from us (even goods that they can produce more cheaply themselves). http://en.wikipedia.org/wiki/Comparative_advantage

Very good reference. Why do national governments always encourage their citizens to buy their own products if it doesn't matter though?

Meh, you seem clued in to economics (unlike me). Do you think we have nothing to fear in the EU from Chinese labour costs? and do you agree or disagree with me when I think that chinese labour costs will remain low due to more and more people becoming available to work (supply and demand)?

I'm trying to rationalise the comparitive advantage when labour is <1/30 the cost it is here. It just seems so muc cheaper to produce everything.

I wonder are there any online resources to see what kind of stuff China buys from us (the EU). I doubt they buy many textiles or the like. I'd imagine luxury items and specialised equipment are the main things they buy from us.

netwhizkid

Yes i think us europeans should buy euorpean i always do when it come to electronics and other stuff like that, It is hard to buy european with out paying extra, but the way i look at it for those extra few euros, I am supporting democracy and fair jobs in europe besides salvery (almost) in china and as for human rights forget it. If china is a commounist state im from planet venus, They definatly must be related to Mrs. Thatcher, well that my opinion, I buy euorpean or even American as often as possible, but i boycot British Imports for obvious reasons, nuff said.

Regards netwhizkid

murphaph

I looked in more detail at that comparitive advantage article. In the discussion section it is apparent that the theory is a fairly simple model which doesn't account for a lot of factors, politics seems to be one of them. It's clear that some clever folks are not sure amongst themselves what CA means for a free market and global trade.

Interesting stuff however.

Sand

I think the real issue is should us Kildare people only buy goods from Kildare to protect Kildare jobs from competition outside of the county! Ive nothing against people from outside Kildare, but weve got to think locally first. Kildare has to be self sufficient, and if that means paying 10 Euro for a pathetic example of an orange then so be it! Kildare businesses deserve the right to charge me whatever they want and I should be bloody grateful for the privledge of buying their goods.

And anyway, those poor oppressed souls west of the Shannon thank us for not trading with them and perpetuating their miserable existence.

SkepticOne

murphaph wrote:

Why do national governments always encourage their citizens to buy their own products if it doesn't matter though?

Because it sounds good. It's what people want to hear.

murphaph

Sand wrote:

I think the real issue is should us Kildare people only buy goods from Kildare to protect Kildare jobs from competition outside of the county! Ive nothing against people from outside Kildare, but weve got to think locally first. Kildare has to be self sufficient, and if that means paying 10 Euro for a pathetic example of an orange then so be it! Kildare businesses deserve the right to charge me whatever they want and I should be bloody grateful for the privledge of buying their goods.

And anyway, those poor oppressed souls west of the Shannon thank us for not trading with them and perpetuating their miserable existence.

Your analogy although humourous (which I like ) doesn't work because the market forces in Kildare are so similar to those in neighbouring counties. Same costs of labour and living etc. This is not the case when comparing Europe to China. Of course your whole post might have been sarcasm in which caseignore this!

Capt'n Midnight

Generic brand consumer goods have never been cheaper.

Leaving us Dub's with more money to spend on mortgagues and so line the pockets of a hand full of developers. Ok maybe you would need some fingers from the other hand to count the number of individuals who are making more out of our wages than all the consumer goods we buy from HongKong/China.

In general apart from Oil most EU goods and services can be sourced locally, IIRC we are less dependent on external supplies than say the US.

EamonnKeane

This whole rather argument seems to be based on the dubious assumption that a European is more deserving of his/her wage than a Chinese person. Surely this is inherently racist?

murphaph

EamonnKeane wrote:

This whole rather argument seems to be based on the dubious assumption that a European is more deserving of his/her wage than a Chinese person. Surely this is inherently racist?

If large companies didn't abuse cheap chinese labour (including kids) then they'd be paying 'em the same as us in Europe and there'd be no thread about cheap chinese imports! I wish they would pay the poor feckers a decent salary but there's no need cos there are a billion of 'em all ready for work for fcuk all. I'm surprised this thread got this far before it was accused of being racist!

I've no problems with chinese people. I work with a few and like them very much. I am worried about the long term health of our european economy, and worried that my kids will have a future here.

Sand

Your analogy although humourous (which I like ) doesn't work because the market forces in Kildare are so similar to those in neighbouring counties. Same costs of labour and living etc. This is not the case when comparing Europe to China. Of course your whole post might have been sarcasm in which caseignore this!

I dont know if it is. Kildare is just as arbitrary a construction as a nation, and Kildare is richer than Dublin on a per capita basis Id be willing to bet, because most people in Kildare work in Dublin whilst vast stretches of Dublin are rather economically deprived.

Say we get protectionist in the case of Kildare, now I cant work in Dublin. I cant get the same sort of paypacket in Kildare than I can get in Dublin. Dublin shops lose out on my trade, so theyre poorer. And Dublin suddenly has to replace all the workers whove cant commute any more which is kinda hard, so theyre poorer too. Trade and free movement between Kildare and Dublin makes us all richer. The same can be said for Ireland as a whole, even though there are wide disparities in wealth between areas within Ireland. Protectionism internal to Ireland, voluntary or otherwise would be seen rightly as economic suicide, but its a good idea when we start crossing international boundaries?

At the end of the day the Chinese have a real cost advantage when it comes to manufacturing low tech goods. Good for them. Good for us too. We get products at the cheapest possible price, and better yet our economy - which is *dependant* on imports - Ireland has no natural resources to speak of, so if we want to make anything we need to import the materials - to fuel it gets inputs cheaper so we can compete more effectively with protectionist states that try to source everything inside their own nation, no matter the cost.

In fact the only people who lose out at the innefficient, over priced manufacturers here who lobby for subsidies and tarriffs to allow them to continue to screw us over?!?!

As for us, we have one thing the Chinese dont have - an english speaking educated workforce that can staff high tech industries. Thats what we should concentrate on, not trying to stop trade to suit a small minority of industry lobby groups.

If large companies didn't abuse cheap chinese labour (including kids) then they'd be paying 'em the same as us in Europe and there'd be no thread about cheap chinese imports! I wish they would pay the poor feckers a decent salary but there's no need cos there are a billion of 'em all ready for work for fcuk all. I'm surprised this thread got this far before it was accused of being racist!

Theyre paying them a fantastic wage by Chinese standards. Chinese are migrating from the rural areas to do these crappy jobs at this crappy wage because its better than the wage thats available to them otherwise. If you were paying them the Irish wage theyd be millionaires. The Chinese cost of living is as low as their wages are, much as the prices in Ireland are as high as the wages are. Undermining trade and removing the jobs is not going to help them.

murphaph

Sand wrote:

I dont know if it is. Kildare is just as arbitrary a construction as a nation, and Kildare is richer than Dublin on a per capita basis Id be willing to bet, because most people in Kildare work in Dublin whilst vast stretches of Dublin are rather economically deprived.

Say we get protectionist in the case of Kildare, now I cant work in Dublin. I cant get the same sort of paypacket in Kildare than I can get in Dublin. Dublin shops lose out on my trade, so theyre poorer. And Dublin suddenly has to replace all the workers whove cant commute any more which is kinda hard, so theyre poorer too. Trade and free movement between Kildare and Dublin makes us all richer. The same can be said for Ireland as a whole, even though there are wide disparities in wealth between areas within Ireland. Protectionism internal to Ireland, voluntary or otherwise would be seen rightly as economic suicide, but its a good idea when we start crossing international boundaries?

But we can't easily commute between Europe and China so it doesn't hold. If you applied your analogy to Europe and China all the Chinese would commute here to work because of higher wages and a lower cost of living in China.

Sand wrote:

At the end of the day the Chinese have a real cost advantage when it comes to manufacturing low tech goods. Good for them. Good for us too. We get products at the cheapest possible price, and better yet our economy - which is *dependant* on imports - Ireland has no natural resources to speak of, so if we want to make anything we need to import the materials - to fuel it gets inputs cheaper so we can compete more effectively with protectionist states that try to source everything inside their own nation, no matter the cost.

Whilst what you're saying makes a degree of sense, I'm trying not to limit this to a small country like ours, but keep it European, which is fairly self sufficient in raw materials in comparison to us.

Sand wrote:

In fact the only people who lose out at the innefficient, over priced manufacturers here who lobby for subsidies and tarriffs to allow them to continue to screw us over?!?!

I honestly think that the sh!t rolls downhill and more and more job losses are in order. I don't believe they will all be replaced by higher food chain jobs as already Intel/IBM etc. are conducting these higher level R&D jobs in low paying countries like India (google Bangalore for electronics).

Sand wrote:

As for us, we have one thing the Chinese dont have - an english speaking educated workforce that can staff high tech industries. Thats what we should concentrate on, not trying to stop trade to suit a small minority of industry lobby groups.

More people speak fluent English in China than in the UK & Ireland. Yet millions more are learning it. They are clever people in Asia. They can do the high end jobs just as easily as you or I but will do it for a lot less. When a student leave Uni in India he'll usually work for free for a year to gain experience. That's what we're up against.

Sand wrote:

Theyre paying them a fantastic wage by Chinese standards. Chinese are migrating from the rural areas to do these crappy jobs at this crappy wage because its better than the wage thats available to them otherwise. If you were paying them the Irish wage theyd be millionaires. The Chinese cost of living is as low as their wages are, much as the prices in Ireland are as high as the wages are. Undermining trade and removing the jobs is not going to help them.

I was really pondering how we can best help ourselves in Europe.

SkepticOne

As I see it, the argument is not really about wages in China vs. wages here. A European country could just as easily lose out to, say, Japan with its use of robotics and automation, and indeed has happened in the car industry.

Europe simply can't compete and the only solution is to stop buying foreign products.

Let us not pretend that this is about working conditions in China. If we cared about the Chinese we would not be discussing withdrawing trade from them and forcing them back to the rice paddies.

Let us assume for the sake of argument that everyone in Europe agrees to stop buying products from everywhere that is more efficient than us. Let us also assume that China and these other countries don't retaliate and boycott our goods.

What happens then is that the EU manufacturers, freed from the discipline of competition, become complacent. Since they are the only ones in the running, they will raise prices. Workers will naturally want more money.

Far from solving the problem of lack of competitiveness, these proposals actually make the problem worse.

After a time people will want to know why they can't buy the now vastly cheaper foreign goods. This voluntary protectionism will then break down. Similar problems occur with enforced protectionism where people learn to smuggle goods past borders for large profits.

Of course, in reality, the assumptions we're making for the sake of argument are not realistic. a) only a small number of people will buy European. b) If the boycott happened on a large scale china would reciprocate with its own protectionism (probably not voluntary).

Now it could be argued that because the boycott would not happen on a large scale, we would not get the complacency on the part of manufacturers to any great extent but, by the same token, there would be little purported benefit either. The small scale boycott has the same problems as the large scale boycott (outlined above), just that these problems are on a smaller scale as well.

The problem is that if Europe is not producing what the world wants at prices the world wants then we are going to suffer. Protectionism (including voluntary small-scale protectionism) only puts the problem off and we suffer a greater amount at a later date. It is harsh but it is reality.

Instead of burying our heads in the sand, we need to figure out how to take advantage of the situation. What can we do with cheap computers manufactured in China? What do individuals in these countries want? If we can't figure out these things we're doomed. China is a huge potential market as well as a competitive threat.