Pete,
Very interesting -- and very significant indeed. What the Globe &
Mail article doesn't say (although the original source report of the
Boston Consulting Group may well do) is the higher quality tendency
of American manufacturing production when compared with China's.
While China has absorbed a great deal of America's and Western
Europe's low-skill factory production of consumer goods, most
high-skill engineering has remained -- as also many other production
goods and technologies that are on the leading edge of R&D. And,
while China's state education system retains its authoritarian,
rote-learning character, which severely cramps the creativity (though
not the 'copy-ability' !) of its people, it is likely to remain so.
This is something that worries both the Chinese and the Japanese
governments but, while being an integral part of deep, centuries-old
cultures, can't change anytime soon.
But complacent we can't be. While America, Germany and the UK
continue to scoop up most of the Nobel Prizes in the sciences, and
thus may subsequently regain positive balances of trade in due course
(or increase them in the case of Germany) this won't necessarily be
of any benefit to the majority of their populations who are presently
sinking in skills and earnings, nor to any early amelioration of
their vast governmental debts which even now are still growing and
threaten to capsize us. (Germany still has a manageable governmental
debt but won't have for very much longer if it has to continue
subsidizing at least six other countries in the Eurozone.)
Keith
At 04:00 21/11/2011, Pete Vincent wrote:
Someone sent this to me, it's a couple of weeks old:
http://www.ctv.ca/generic/generated/static/business/article2041599.html
Excerpts:
The United States exported more goods and services in March than in
any single month in its history: $172.7-billion (U.S.) worth. It was
the country's 21st consecutive month of rising exports, pushing the
year-over-year increase to 20.9 per cent. In these 12 record-setting
months, exports reached within one-tenth of 1 per cent of
$2-trillion - more than four times the cost of the country's imports
of crude oil.
This is significant. People are starting to take notice. Markets
writer Joseph Lazzaro (on the Daily Finance website) anticipates
that the U.S. up-trend in exports could last for years and turn its
intractable trade deficit into a surplus. More dramatically, Boston
Consulting Group (BCG), a global management consulting firm,
discerns "a renaissance" in manufacturing that will, within five
years, lure major U.S. corporations to return home from China.
[...]
BCG said many more such decisions will occur as wage rates for
skilled workers rise in China, year after year, at double-digit rates.
[...]
Harold Sirkin, a BCG senior partner, said in a release. "We expect
net labour costs for manufacturing in China and the U.S. to converge
by around 2015. As a result ... you're going to see a lot more
products `Made in the USA' in the next five years". At current
rates, China's wages could double in as few as five years.
// The article continues that US exports to several countries have
risen 20-40% in the last year, and
Since 1947, U.S. manufacturers have precisely tracked the sevenfold
increase in U.S. GDP. In 1980, they produced 22 per cent of the
world's manufactured goods. In 2011, they still do, while China
produces 15 per cent. Through the entire rise of China, in other
words, U.S. manufacturers have maintained their original share of
global production. This single industry would rank, all on its own,
as the eighth-largest economy in the world.
// I am somewhat suspect of the facts in this article. I wonder if it
is rather true that these "made in USA" articles in fact have the
last couple of bolts and the nameplate only added in the US, with
the component parts all funneling in from the usual suspects.
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Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2011/11/
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