How  can governments ensure all companies get equal access to China? - Page 1
Forum section: electronics / general

author: ocset
author_rank: Super Contributor
timestamp: April 18, 2020, 03:31:14 pm
content: Hi,This talks of UK, but just sub in [your country] instead as it applies to all countries…With regard to electronics, I used to work for a company where I could pick any electronics component from farnell etc……then give this component to my boss…then he could speak to his Chinese employee based in China….and we would get the component from China at a quarter (or less) of the price, and usually better quality too.Eg stuff like TO220 heatsinks, ESD floor tiles, ferrite core halves and bobbins for transformers, Thermal chambers, Thermal cameras, 1Kw “variable mains” Bench power supplies …almost anything.We could even source Chinese factories to do destruction testing of our power supplies at a really cheap price……eg they would run the SMPS at [max power/min vin] for 1 hour at a time at incrementally increased temperatures until it blew up. Then send us the blown PSU’s so we could inspect and see what failed.We could also get dirt cheap conducted EMC scans done on offline power supplies….(and we would always send them two PSUs….one that we already knew the frequency trace of so we could check up on them…and the Chinese EMC labs never got it wrong.)I notice that other electronics companies in the UK do not have access to these things. These UK companies are worse off for this. Hence their profitability is less and thus they end up paying less tax to the UK government.How can the UK government ensure that all UK electronics companies have equal access to these Chinese “wonder“ factories and facilities?In Germany, I don’t mind betting that the German government intervenes to ensure fairness , and ensures that all German companies share their Chinese “wonder” contacts….equally, the German government probably also has a dept set up to ensure any “bad” Chinese companies get highlighted to all German companies (if there is such thing as a bad Chinese supplier)

author: Siwastaja
author_rank: Super Contributor
timestamp: April 18, 2020, 03:33:45 pm
content: It's completely up to the individuals who know how to communicate, and who have built personal connections to the Chinese companies.Anybody has "the access", I know this very well because I have personally sourced parts and communicated about custom manufacturing and engineering services. The Chinese are great to work with. You can start anytime through Alibaba.Governments have no part in this, and hopefully never will.

author: MK14
author_rank: Super Contributor
timestamp: April 18, 2020, 04:04:03 pm
content: You seem to be obsessively posting the same/similar/related threads, again and again.SMPSs made in UK, and China.Is there some kind of non-resettable fuse, I can blow. Which will stop you from doing this ?

author: coppice
author_rank: Super Contributor
timestamp: April 18, 2020, 04:05:22 pm
content: So, you want companies to share the most sensitive information any business has? I'm sure that will work out wonderfully. If you wanted a government body to develop its own connections with great resources around the world, and help local businesses access them, that exists in many countries. It exists in the UK. Its just not that active, as the UK has given up on electronics, despite some Department of Trade and Industry exhibitions which try to indicate the contrary.

author: coppice
author_rank: Super Contributor
timestamp: April 18, 2020, 04:06:07 pm
content: Quote from: MK14 on April 18, 2020, 04:04:03 pmFor a switched mode guy he seems to have a real problem switching modes.

author: georges80
author_rank: Frequent Contributor
timestamp: April 18, 2020, 04:11:45 pm
content: Part troll, part broken record.I saw the title of the thread and guessed it had to be treez and surprise surprise it wascheers,george.

author: ocset
author_rank: Super Contributor
timestamp: April 18, 2020, 04:25:43 pm
content: QuoteThanks, but I dont believe so...i was speaking to an ex major company SMPS chief engineer, now turned SMPS design consultant...he was on to me to find out where my company sourced the high quality transformer ferrites from, because he was unable to find out himself.Another company bought a Flir TG165 from websearching alibaba etc..but when i was at the mentioned company, we got a Great quality Dong Guan Xintai HT-04 for less than £100....much cheaper and better...due to our Chinese contact.

author: dmills
author_rank: Super Contributor
timestamp: April 18, 2020, 05:12:29 pm
content: If you don't have the contacts there are loads of consultants (of widely differing quality) who do.Loads of 'facilitators', often out of Taiwan who can help you navigate the culture and (if you get a good one) even handle things like factory visits and ongoing QA inspections for you.If you do have the contacts (sounds like your last lot did) you can of course cut out the cost of the middle man, but make sure you know what you are doing, China can go very wrong if you do it wrong.Fact is that actually for volumes less then massive, China is actually NOT automatically the goto for electronics assembly that you might expect, for a thousand units a year or so, we found a UK company that could do it almost as cheaply and were just down the road, made delivering the occasional beating easier.The bare PCBs were still coming from China, but the P&P was all local, and by scheduling orders a year out, with bonuses for having them available if we needed extras they get to run our jobs during quiet periods and they stock hold for us.

author: coppice
author_rank: Super Contributor
timestamp: April 18, 2020, 05:20:53 pm
content: Quote from: dmills on April 18, 2020, 05:12:29 pmFacilitators tend to be a lazy bunch, who will connect you to the first people who come to mind, regardless of suitability or cost. Contacts tend to be people you have enough experience with to trust. Both cost, so you always have a middle man, unless you have a local presence of your own. However, most of the time I'd take contacts over facilitators.

author: Simon
author_rank: Unknown
timestamp: April 18, 2020, 05:22:56 pm
content: I think treez borders on being a conspiracy theorist complaining about things that are not. there is actually a reasonably active Uk sector where prices allow. If you want to know why we don't make big volumes here the answer is obvious and you should contact your MP about proposing bills to to put import tariffs on the countries you don't like. In the Uk there are plenty of electronics designers and assemblers, in fact the board assembly market is thriving whilst also very competitive, I don't know for example how newbury electronics is in business with the much cheaper prices even from other Uk assemblers. There are several PCB manufacturers around the country, not all make in the Uk and some do a mix. Fact is if your making small volume or specialist then it's a UK job, if you want large volumes of cheap shite of course go to china, but then i have seen some really shocking companies in the Uk that just don't know how to do business and think that just spouting "made in the UK" and putting union jacks all over the place is a good courterbalance for their incompetence.The best board assembler i ever found was PML in Northampton but sadly they were dragged out of business by their parent companies group going bust. But they were top notch and unlike other more expensive companies that just replied with "build to print" to any issue they worked with us on the issue even when it was our fault.

author: dmills
author_rank: Super Contributor
timestamp: April 18, 2020, 05:28:34 pm
content: I had good luck with both Bela (for shorter run things), and Microtec (for bigger runs), but there is clearly way too much free money out there because some folks who really should have gone bust have not.ALS (Layout house) and ASK (Quick turn prototype specialists) also get a worthy mention.

author: coppice
author_rank: Super Contributor
timestamp: April 18, 2020, 05:46:35 pm
content: Quote from: Simon on April 18, 2020, 05:22:56 pmIf you think tariffs are your best route to growth you are already in a death spiral.

author: Simon
author_rank: Unknown
timestamp: April 18, 2020, 05:51:40 pm
content: Quote from: coppice on April 18, 2020, 05:46:35 pmI am no financial expert but I understand that china keep their currency intentionally devalued to favor exports. As a country that is largely self sufficient it can do that and make trade with it cheaper. How do you "fight" that? When the UK voted to leave the Eu and the GBP plumeted in value many companues reported an increase in sales because they were exporting out of the UK and their prices suddenly got cheaper. I raised my prices as it meant that my imports from Dave went up in price but my export price outside of the Uk remained the same. If i were selling Uk manufactured goods i would have been laughing.

author: SiliconWizard
author_rank: Super Contributor
timestamp: April 18, 2020, 06:12:30 pm
content: Quote from: Simon on April 18, 2020, 05:51:40 pmThat is right. Currencies play a big role. It's not a simple matter though, as the balance of trade influences the currencies exchange rates, and conversely.But any country that can freely "play" with the value of its currency is advantaged as far as the BOT is concerned. Countries in the euro zone have it tougher for that reason (even though it can bring other benefits).

author: coppice
author_rank: Super Contributor
timestamp: April 18, 2020, 07:40:06 pm
content: Quote from: Simon on April 18, 2020, 05:51:40 pmDuring the Asian financial crash of 1997 China was greatly praised by the west for taking a huge hit by keeping the Yuan stable, while most other Asian currencies sank. It was a big hit. Lots of people lost their jobs, and many never returned. It was the start of clothing production looking for cheaper labour, like Bangladeshi children. Since then western pundits have alternatively complained about China artificially keeping the Yuan high or low. Mostly what they have done is keep it relatively stable, because stability is what a heavy exporting country needs. Not rock steady against the US dollar, like the HK dollar is locked, but fairly stable. Financial people are endlessly manipulating even the largest countries. Its hard to tell the full picture.

author: Simon
author_rank: Unknown
timestamp: April 18, 2020, 07:43:22 pm
content: basically if a country is way cheaper than you how do you discourage your citizens buying things made in the cheaper country?

author: coppice
author_rank: Super Contributor
timestamp: April 18, 2020, 07:44:50 pm
content: Quote from: SiliconWizard on April 18, 2020, 06:12:30 pmIt should be obvious that the Euro was implemented by people who wanted to end the EU. This was obvious from the time the idea was first presented as a short term goal. Interestingly, the first phase of the EU breaking up came from one of the country sane enough to keep its own currency. Far in the future the Euro might have been a good idea. However, implementing it long before the European economies had harmonised sufficiently was clearly intended to bring about the stresses we have seen since 2008, and destabilise the EU.

author: coppice
author_rank: Super Contributor
timestamp: April 18, 2020, 07:49:53 pm
content: Quote from: Simon on April 18, 2020, 07:43:22 pmDo you have a clear idea why you would want to? Do you think is a short term band aid, or a proper long term fix? As countries trade more currency anomalies usually sort themselves out in one of two ways. Either rampant inflation adjusts the currency, or more formal processes do. China has seen years of steady inflation gradually bringing local conditions more in line with western ones, as the wealth of its middle class has grown. You have to be something like the US, and hold the reserve currency, to maintain long term manipulation.

author: floobydust
author_rank: Super Contributor
timestamp: April 18, 2020, 08:09:27 pm
content: Quote from: Simon on April 18, 2020, 07:43:22 pmThe "race to the bottom" for product price and the "race to the top" for maximum profit is not working.Intangible costs are not factored into products and manufacturing. This is the huge problem the world faces.Devaluing your currency, providing subsidies, sacrificing the environment, worker's health and pension benefits, safety etc. - having a lower standard of living keeps labour costs lower.Dumping products to kill off competition, espionage to kill off entire industries, theft of IP - it's business, it's war.People will buy the lowest price, and the feedback loop whereby local businesses and industry and jobs die off as a consequence, is too long for governments to realize they should have acted.

author: MK14
author_rank: Super Contributor
timestamp: April 18, 2020, 08:21:21 pm
content: Quote from: treez on April 18, 2020, 03:31:14 pmDo you have any actual evidence/links to back this "theory" up ?My understanding is, that Germans tend to be well educated, very hard working, well organised and as a result, tend to be more successful at things (such as engineering), than some other countries.If you feel so bad about things, why don't you move to Germany or China ?Then work in (or start up a business that does) SMPS, and LEDS/Street-lights. Your "friend" might join you as well.Or in the possible business vacuum, that the virus may be (sadly) creating for you. Start up a nice business in the UK. From your previous threads (and this one), I'm sure true justice will occur.I.e. If you are as business savvy as you think, you will succeed, but if not, you may fail.

author: Simon
author_rank: Unknown
timestamp: April 18, 2020, 08:28:10 pm
content: Quote from: floobydust on April 18, 2020, 08:09:27 pmThe problem is that people will buy short term and cheap. This costs jobs in your local economy and means that your environmental regulations do not actually cover where much of the damage may be happening. Usually a government controls spending behavior by taxing imports. This makes the race to the bottom not a way to get sales because your sales are blocked by consumer behavior.

author: floobydust
author_rank: Super Contributor
timestamp: April 18, 2020, 09:43:12 pm
content: Lowest cost products flowing into a country, who would complain and stop that?It's today's business model - import cheap stuff from a developing nation, markup the price and resell. This is what I see the majority of businesses doing.Developing products, technology - no investor has patience for that, I want my cash profit now.The CCP have a long-term plan for economic prosperity that is superior to anything in the West. Our governments are impotent at planning and executing anything long term for the economy.Expecting the consumer to "vote with their dollar" and spend much more to buy local, seems to be only working at farmer's markets because the benefit is instant in flavour, freshness. It is not a corrective mechanism by any means.

author: Simon
author_rank: Unknown
timestamp: April 18, 2020, 10:15:21 pm
content: when all you do is import you have nothing to export. Again I am no financial whiz but surely you can't just keep handing your money over out of the country for tat that goes in the bin. unless there is a balance of import/export you just become a financial desert with no expertise and a workforce that is not capable of doing anything more than driving pallet trucks and using tills.

author: nctnico
author_rank: Super Contributor
timestamp: April 18, 2020, 11:02:50 pm
content: Quote from: Simon on April 18, 2020, 10:15:21 pmThe US has been doing just that for decades. But still, why is anyone entertaining yet another one of treez's tantrums?

author: floobydust
author_rank: Super Contributor
timestamp: April 18, 2020, 11:34:38 pm
content: Quote from: Simon on April 18, 2020, 10:15:21 pmYes it ultimately destroys the customer- the country importing piles of goods gets reduced to having nothing to generate revenue.Canada and Australia have fallen to mostly whoring out our natural resources. That's our exports - coal, crude oil, natural gas, wheat and grain, iron and copper ores etc. So some money will always be coming in, but our industries are in large decay.Quote from: nctnico on April 18, 2020, 11:02:50 pmThe wonky thread is relevant because we all sit back and expect our quality of life to continue despite the obvious fire.Engineering is higher up the food chain and without local design and manufacturing, there's not much to do.

author: nctnico
author_rank: Super Contributor
timestamp: April 18, 2020, 11:54:37 pm
content: Quote from: floobydust on April 18, 2020, 11:34:38 pmIt has been proven a long time ago that your statement isn't true. Most of the value (and thus profit) in an item is not coming from manufacturing it but selling it. So the last thing you want to do is manufacturing. At least not mass-production. Sure there is room for local manufacturing in developed countries but this needs to have a high added value like making special high-tech products or making something quickly. Anyone who thinks that bringing mass production back to 'the west' is actually good for the economy (=increasing living standards) is a complete idiot.

author: Simon
author_rank: Unknown
timestamp: April 19, 2020, 08:36:48 am
content: Quote from: nctnico on April 18, 2020, 11:02:50 pmWell he hasn't actually manage to make an intelligent comment after his initial rant. Maybe it will teach him to shut the fuck up next time as clearly he is out of his depth!

author: tooki
author_rank: Super Contributor
timestamp: April 21, 2020, 07:38:14 am
content: Quote from: Simon on April 19, 2020, 08:36:48 amRight. Just after pigs fly.

author: Zero999
author_rank: Super Contributor
timestamp: April 26, 2020, 08:20:49 am
content: Quote from: Simon on April 18, 2020, 07:43:22 pmYou don't.Putting tariffs on Chinese products won't work. If we do what the US has done and tariff components and raw materials, then was we'll do is kill off our own manufactures. We could tariff ready made goods, but we still get many of the components and raw materials from China, so the Chinese could charge the UK more for them, if they wanted too and get the money back that way.It's long been proven that tariffs don't work because it results in tit for tat action and harms both parties. Trade wars are like any war: there's no real winner.Another important thing to remember is more often than not, manufacturing is only a small part of the cost of an item. Design and branding are often far more valuable. A can of Coca-Cola doesn't cost any more to manufacture than a supermarket own brand soft drink, but it sells for much more because of the branding.To compete with China we need to make things which are worth the extra money, such as high quality, low volumes with a rapid turnaround. We can't do it purely on cost, more because of the limited access to raw materials. Cheap labour is less of a factor now, than it used to be, since the manufacture of electronics can be heavily automated. Even if we do manage to bring back a lot of manufacturing to the UK, it won't create as many jobs, as many think.

author: Simon
author_rank: Unknown
timestamp: April 26, 2020, 08:26:05 am
content: No electronics manufacturing in and of itself is so automated that it would not be a boom in jobs. Finished products could be import taxed. As it stands look at all of the crap a lot of it dangerous that just slips in in individual packages from ebay. I have always advocated the upholding of standards. Rather than just tax everything make sure that it is decent quality. We ship items half way around the world just to throw them in the bin days to months later. With a rush to the bottom in price yes no one can compete.

author: SilverSolder
author_rank: Super Contributor
timestamp: April 26, 2020, 02:04:25 pm
content: Most people have a fixed amount of disposable income each month.That has to mean that if we raise prices by means of tariffs or other methods, people only have one option: buy less stuff each month.It is not immediately clear to me how this benefits anybody.

author: Simon
author_rank: Unknown
timestamp: April 26, 2020, 02:42:32 pm
content: people on the whole end up spending the same money, little often on what turn out to be disposable items or a lot occasionally on items that are tread as investments rather than cast away as soon as the next thing comes out or it breaks.We also have economies based on having to make more things and get people to keep spending over and over. Many people shy away from the idea of a citizens income but guess what most software licenses are these days? just income so that companies can retain staff that put out minimal updates and added features because there is little more to add.And again, what does it do to an economy that just keeps giving money to other countries, without a balance in trade you become worthless as a country.

author: SilverSolder
author_rank: Super Contributor
timestamp: April 26, 2020, 04:04:12 pm
content: It helps to see the issue more clearly if you think of the planet as a whole, rather than individual countries.For example, inside the UK, nobody has ever said it was a problem that production of knives in Sheffield prevented the production of knives in Birmingham. It seemed logical enough to everyone that if they were really skilled at making knives in Sheffield then, by all means, have at it - meanwhile, we'll make bicycles in Birmingham.This is the logic behind the economic principle of "comparative advantage". Sheffield sells knives to the Brummies, who sell bicycles back to Sheffield.The same thing between different countries.The real problem happens if - for example - a city goes into decay (Detroit), or - a whole country goes into decay. If not enough people are doing or making something worthwhile, something that someone else wants... that's when the trade balance starts to implode.Interestingly, both sides are worse off than before one of the partners imploded. The Brummies now have to do without knives, or they have to do without bikes in Sheffield...

author: Simon
author_rank: Unknown
timestamp: April 26, 2020, 04:37:45 pm
content: Indeed, what do we do in the UK except run warehouses to shift shit and call centers to sell shit? we don't create wealth, we just move around the wealth created by others, my own employer buys in things we used to make ourselves but due to a rush to the bottom we cannot compete with china or even another EU country - you know one of these countries that was supposed to be of similar economic standards to us. The current Covid-19 situation is highlighting just how far down the sewer this country is with nothing of it's own to offer. I recently came across an innovate grant form. Offering £25'000-£50'000 to anyone that could propose and develop something to help with the current situation. Yes that is the state of affairs, we are mid pandemic and we are not just ramping up manufacturing and supply, we are offering people money to design things to make the things we should of had. While ventilators was ruled out and so were vaccines (£50k is nothing for those) PPE was on the list. Yea, the UK needs to think of a novel way to make PPE, otherwise a code for - for god sake can someone start making this stuff, we know that we don't normally do this in this country but for fuck sake please can someone just make this shit, we really need it now and we can't compete with the whole world.

author: coppice
author_rank: Super Contributor
timestamp: April 26, 2020, 04:38:30 pm
content: Quote from: SilverSolder on April 26, 2020, 04:04:12 pmThis is a rather poor comparison. Britain had no problem with knife (actually cutting tools in general) production being concentrated in Sheffield, because numerous companies in Sheffield mastered the technology and competed with each other. If Sheffield had only one monopoly supplier it would have been a big issue, as a lack of competition is very destructive for everyone but the monopolist. From outside Britain, a concentration of cutting tool technology in Sheffield didn't look good at all. To those outsiders the numerous companies in Sheffield looked much like one, because far too often they tended to face Britain Inc, rather than the individual companies. The various Sheffield companies could act in their collective interest, or the British government could coax/force them to act in the national interest. So, most advanced economies of the time worked hard to match the quality of products from Sheffield, and eventually some left Shefflield behind. With several sources of good cutting tools the remaining advanced economies had sufficiently diverse sources for tools not to worry too much.The situation now with China is much like this, apart from my last point above. China has numerous companies in each segment, competing with each other. This is often on a province by province basis, so you don't always see the same level of localisation of a technology as with a place like Sheffield. The rest of the world sometimes see these individual Chinese companies competing for their business, but the Chinese national interest is also an important driver. What this wasn't doing until this spring was making other countries seriously consider competing with China. We will have to wait to see if the current rhetoric actually leads to real change, and more diverse sources.

author: nctnico
author_rank: Super Contributor
timestamp: April 26, 2020, 05:05:42 pm
content: Quote from: Simon on April 26, 2020, 04:37:45 pmYou are not seeing the big picture here. Most of the profit is made in selling things, not manufacturing them. Just take an example:material & production cost of a device: $5Manufacturer markup: 10%: profit is 50cent per piece.Wholesale importers buys the device for $5.5 and sells it with a 20% markup for $6.60 : profit: $1.10Shop sells it with a 75% markup for $11.55 : profit: $4.95Now the shop doesn't end up keeping the entire profit. Some goes to the landlord and the employees but it is clear that most of the profit ends up in the local economy and someone working for a shop adds much more value to the economy compared to someone working in a factory.

author: Simon
author_rank: Unknown
timestamp: April 26, 2020, 05:17:31 pm
content: Quote from: nctnico on April 26, 2020, 05:05:42 pmI do see the bigger picture. Retail and warehousing are poorly paid and as you don't need qualifications to do these jobs there is no incentive to offer or require better education. People in the UK have to claim benefits in order to pay their rents even when they are working..... And yet all these people do is push stuff around in circles. Yes a lot of the money is made in the retail side, and look at how that works. If you really want to look at the bigger picture you get into the politics of taxation, wages and tax avoidance whilst the money is slowly leached away to the manufacture of these goods that have to be purchased over and over again while the retailers bosses leave the country and don't pay tax.If you decide you want more money for you unskilled job you don't get more money. If you were a skilled worker making the thing you would have more bargaining power for better wages. One of my bigger concerns in the lack of skilled jobs is the loss of social filtering, and the lack of need for any education that makes you a better person all round.

author: coppice
author_rank: Super Contributor
timestamp: April 26, 2020, 05:48:02 pm
content: Quote from: nctnico on April 26, 2020, 05:05:42 pmThe people making stuff may be getting a raw deal, but if your local economy is creating nothing to send to the manufacturers as payment, eventually they stop sending you more goods.

author: floobydust
author_rank: Super Contributor
timestamp: April 26, 2020, 06:02:50 pm
content: I don't agree with your view, because MBA "profit" does not equal economic prosperity. On a macro-scale, manufacturing creates more jobs, more skilled workers,than just warehouses selling imported shit. china does manufacturing, Walmart does reselling.

author: nctnico
author_rank: Super Contributor
timestamp: April 26, 2020, 06:06:11 pm
content: Quote from: floobydust on April 26, 2020, 06:02:50 pmAnd what use is there for skilled workers in an automated factory? No matter how you look at it: most of the profit is made at the sales side. The place for skilled workers is at the sales side working in R&D; not on the factory floor.

author: SiliconWizard
author_rank: Super Contributor
timestamp: April 26, 2020, 06:27:08 pm
content: Quote from: SilverSolder on April 26, 2020, 02:04:25 pmThis is of course a very simplified economic "model" here. Things are just a tiny bit more complex.There's a fine line between regulating economy and making it worse for everyone. But without any form of regulation, you're almost certain the system ends up going bonkers.Tariffs are one way of regulating worldwide economy, and disposing of them altogether is probably not a good idea.One thing (among many others) you're overlooking in this little "analysis" is that you're assuming that tariffs (and other means) make no difference to the economy, except higher prices for the consumer. This of course can't be true - if not excessive, it can actually improve things, and people would have more money to spend. Prices alone mean nothing if you don't link them to the standard of living of a given population.The mere idea that lower prices for goods would lead to people getting richer somehow is completely silly. Doesn't work this way - or it's only very temporary. If you keep dragging prices down, everyone ends up poorer in the end. When you don't actively regulate economy, it just ends up regulating itself. And if everything gets cheaper, wages will mechanically drop too, eventually.If you think we can just keep getting cheap goods from China (for instance) forever without it impacting our wealth negatively, IMHO you're largely deluded. At best, it would just end up making money have less value, without changing anything much to the overall standard of living. At worst, it would end up making us all poorer because it's just not sustainable as such.

author: nctnico
author_rank: Super Contributor
timestamp: April 26, 2020, 06:41:35 pm
content: Quote from: SiliconWizard on April 26, 2020, 06:27:08 pmChina has solved that nicely by just lending the money back to countries they export to. Inflation also helps because the amount of money borrowed in the past loses it's value automatically.

author: floobydust
author_rank: Super Contributor
timestamp: April 26, 2020, 07:56:06 pm
content: Quote from: nctnico on April 26, 2020, 06:06:11 pmchina's main advantage is their sheer population - basically people as cheap robots. The IP is stolen, copied and so they don't really understand product development or the technology in what they are making. But they've leapfrogged into manufacturing in a scale never before seen. Pic related.If most (other) nations then degenerate down to only being consumers of products, with sales of imported goods as the main revenue generator, this is just the race to the bottom.Eventually a nation would become impoverished as it can only buy things using debt, and never create revenue. The intangible money, that the bean counters and MBA assholes cannot see, comes from R&D but you don't see that stand alone. Pure R&D is a massive expense only, according to the bean counters and "management by numbers".

author: Simon
author_rank: Unknown
timestamp: April 26, 2020, 08:09:59 pm
content: Quote from: SiliconWizard on April 26, 2020, 06:27:08 pmI think this is the problem. We have a better standard of living than centuries ago but are we actually any richer? not really. To be better off is relative to your environment. Once upon a time to be very rich meant a huge house and employ servants, now it means to own an island, it's all relative. When governments have to give handouts to working people you have a problem. It's ok saying they can just go buy some cheap stuff made abroad but that is not solving the underlying problem. nations that just consume in the long run will have problems but every government and business that is generally owned by a guy who pretends to live in a different country for tax reasons only thinks of the now, the profit they can make today, what it costs them tomorrow is tomorrows business strategy meeting where they will work out how to make someone else pay or the next governments problem to deal with.I'll say it again, the covid-19 crisis exposes very well why this is a crisis for the UK and others and not something we just deal with.

author: coppice
author_rank: Super Contributor
timestamp: April 26, 2020, 08:46:46 pm
content: Quote from: nctnico on April 26, 2020, 06:06:11 pmA highly automated plant doesn't need many people of any kind, but, apart from the cleaners, the people it does need are those skilled enough to keep everything running smoothly - maintenance, inwards and outwards logistics, etc.

author: floobydust
author_rank: Super Contributor
timestamp: April 26, 2020, 08:56:20 pm
content: china is exposing (exploiting?) flaws in democracy and capitalism. I don't see any corrective mechanism to deal with the 'race to the bottom' driven by the 'race to the top' for profit.OP expects the government to do something, but we all know this can never happen - you need zero qualifications to become a politician- no education or credentials so they are generally inept morons. There is no understanding of long term planning for economic prosperity for a nation, plus it's a revolving door with a new party coming in every few years changing the priorities. Government can't right the ship. In this sense, the CCP with their initiatives, are superior to the West.The covid-19 crisis is showing how weak and fragile corporations have become in providing all their profits to shareholders. They have nothing in reserve and cry for bailouts.The covid-19 crisis is showing how weak and fragile consumers have become with their high debt load, and Mc Jobs. They have no savings either to weather such a crisis.I can't see a solution to stop the erosion of the West.

author: SilverSolder
author_rank: Super Contributor
timestamp: April 26, 2020, 09:13:48 pm
content: Quote from: nctnico on April 26, 2020, 06:06:11 pmYou could argue that the split between manufacturer, distributor, and retailer is something the customer doesn't see - and it doesn't matter to him/her what the split is, what matters is the final price.Often the distribution chains are very protective of their turf, working hard to prevent competition from springing up (e.g. forbidding "grey imports" in an attempt to keep prices as high as possible on products that they have the exclusive rights to sell). We don't really live in a free market economy, when you look under the covers.

author: SilverSolder
author_rank: Super Contributor
timestamp: April 26, 2020, 09:16:53 pm
content: Quote from: Simon on April 26, 2020, 04:37:45 pmI have been surprised at the lack of interest from local entrepeneurs to start making masks in large quantities. I do see a lot of cottage industry going on, but nothing "serious". We are all running in circles waiting to get an order in to a Chinese supplier. It really is as if we have forgotten how to do basic things...

author: SilverSolder
author_rank: Super Contributor
timestamp: April 26, 2020, 09:26:03 pm
content: Quote from: coppice on April 26, 2020, 04:38:30 pmYes, the point is exactly what you said - a region ends up as a "center of excellence" where the locals simply know their stuff so well (and have all the supply chains and other resources lined up) that it becomes a very tall order to compete with them in any meaningful way.China has now ended up as a "center of excellence" for manufacturing many things - they are competing on a broad front. However, we still do stuff in the West that they don't touch. When was the last time you saw a Chinese movie?Seems to me that engineering is something China is very good at, and our role in the West, as engineers, often ends up being a kind of interface between our own culture and China, to get products adapted to work the way we like them. That isn't a bad thing per se, of course.What we really need is a set of niches that we can be very strong in ourselves, so we have something to trade...

author: SilverSolder
author_rank: Super Contributor
timestamp: April 26, 2020, 09:33:49 pm
content: Quote from: SiliconWizard on April 26, 2020, 06:27:08 pmYou haven't really disagreed with the central thesis, that tariffs reduce your spending power?Of course I understand and agree with you that the purpose of the tariffs often is to nudge people into altering their behaviour, encouraging them to buy something else instead. But whatever the intention of a tariff is, it doesn't alter the fact that your disposable income doesn't go as far as it did without that tariff in place. No?

author: SiliconWizard
author_rank: Super Contributor
timestamp: April 26, 2020, 10:32:37 pm
content: Quote from: SilverSolder on April 26, 2020, 09:33:49 pmI think my point was made clear above. Sure it does reduce your spending power momentarily, but the long-term effects can be the opposite of this, due to retroaction on the whole economy.But speaking of spending power, there is a secondary effect of cheap goods: people buying stuff that they may not have bought otherwise, and that are not really that necessary - so that secondary effect is that consumers possibly get poorer because they just spend more than they otherwise would. That's something we can all witness actually. That goes well with the motto of "spending all you can", but that also promotes overconsumption and tends to leave people with loads of crap and zero money to save (for hard times.)Quote from: SilverSolder on April 26, 2020, 09:33:49 pmI think I kind of explained my point above. You're assuming your income (and what it's worth) wouldn't change, and you seem to be kind of ignoring the bigger picture and the economic impact. I was making the point that it would.

author: coppice
author_rank: Super Contributor
timestamp: April 26, 2020, 10:40:47 pm
content: Quote from: SilverSolder on April 26, 2020, 09:26:03 pmI have no idea what point you were making there. Choosing movies to watch is mostly a language issue for most people. As it happens, I have watched a large number of Chinese movies. They don't make that many great ones, but I think their hit rate is still superior to Hollywood.

author: rsjsouza
author_rank: Super Contributor
timestamp: April 27, 2020, 12:55:02 am
content: In my experience there is a very fine line of tax rate that stimulates and impairs local manufacturing.My home country kept every consumer product out of reach for the common man through law (70's~80's). This created an industry that, in certain segments such as automotive and computing, became complacent and aged for the most part (there were still a few brilliant entrepeneurs and technically skilled computer clone designers).In the 90's it started opening the market (together with the PC market explosion), albeit with a hefty 60% tax on finished goods (this was designed to foster local manufacturing) but with much lower rates for primary goods (semiconductors included). This created two things: high prices and a grey market. The high prices maintained the complacency of the auto and consumer industries - everything that couldn't be moved easily then: white and brown goods and cars. On the other hand, what initially helped spike the tech companies given they were able to purchase more advanced equipment, in a few years the grey market expansion finished off these companies due to the excessive price erosion.The issue does not extend to more niche segments due to regulation: a few areas have strong local design and manufacturing (e-scales, banking and commercial automation, instrumentation, etc.). Given the production volumes are lower, it is easier to enforce.A similar attempt was made to block toys via compliance and regulation - unfortunately enforcement is weak and corrupt.

author: Caliaxy
author_rank: Frequent Contributor
timestamp: April 27, 2020, 05:27:09 am
content: Quote from: Zero999 on April 26, 2020, 08:20:49 amMaybe not, but it would prevent IP to be transferred to foreign manufacturers who, in turn, will try to sell cheaper products based on your IP to your own customers. It might be too late to do anything about this though, Chinese companies are already offering high quality products and do their own R&D. Compete with that now.

author: SilverSolder
author_rank: Super Contributor
timestamp: April 27, 2020, 01:25:23 pm
content: Quote from: coppice on April 26, 2020, 10:40:47 pmFair point, I have seen one or two Chinese movies and I thought they were superb - but they are not mainstream, right?

author: SilverSolder
author_rank: Super Contributor
timestamp: April 27, 2020, 01:31:52 pm
content: Quote from: rsjsouza on April 27, 2020, 12:55:02 amI have also lived in countries that put up tariff barriers to protect local vested interests. My experience is that it always ended exactly as you describe: the protected industries act as if they have been given a royal charter excluding all competition (which is exactly what it amounts to), and stop trying.Effectively, the tariffs or other regulatory hurdles end up creating the equivalent of monopolies locally.I am not sure if there is a way to strike a good balance, or if it is always hopeless.

author: SilverSolder
author_rank: Super Contributor
timestamp: April 27, 2020, 01:37:58 pm
content: Quote from: SiliconWizard on April 26, 2020, 10:32:37 pmWhat I am struggling with, is understanding how my local income would increase and even exceed what I lost due to tariffs?Good point about removing "junk spending", for lack of a better term. We already have many principles in place to nudge people towards making better decisions. Most people get paid monthly, and in many case bi-weekly or even weekly... how many would be able to manage a yearly paycheck without running out of money by October?For those of us who can manage, any "tariff babysitting" is an infringement. Note, I don't mind shouldering a bit of burden of "excessive babysitting" if I thought it made the country or the world better off overall. For example, you could consider speed limits a kind of babysitting (which they are). But we generally accept them as being for the greater good and abide by them, by and large.

author: coppice
author_rank: Super Contributor
timestamp: April 27, 2020, 01:57:17 pm
content: Quote from: SilverSolder on April 27, 2020, 01:25:23 pmHow very parochial.