Just making stuff or creating jobs does not work.
First you have to see a way to create value.
If you can only manufacture a product for $5 that can be imported for $1, then you need some sort of protectionism to force people to buy the $5 product.
So what does the customer get? Well they're getting a $1 product and just paying a $4 tax.
Far too many Westerners have an inflated sense of entitlement. On the global market, an auto worker is worth, say, $20k per year. Yet an autoworker in USA might bet paid as much as $100k per year. That's an extra $80k that is not providing any value and just for being American.
What the hell does "sustainable" mean anyway?
A sustainable business practice is one that can be kept in place for many years and continue to function. That does not work in this industry. This is the industry of change and we have to work with what we have now and modify our approach as things move on.
Is the current Chinese model likely to keep going for much longer? Probably not. Just take a look at Japan.
In the 1950s, Japan was that place that make crap toys which broke a few days after Christmas and their cars were rubbish. Now Japan is associated with high quality and some of the strongest brands in any industry they play in: Toyota, Sony, JVC, Toshiba, ...
The same then happened in Korea. Samsung, Hyundai,...
Now Chinas brands are emerging: Huawei being an obvious example.
Meanwhile many Western brands have just stagnated over the last few years and are just riding on their brand recognition. What has Intel or Microsoft done in the last 5 years?
Far too many Westerners are to focused on adversarial issues. China is far less of a command economy than it ever was, allowing entrepreneurship to flourish. But some command can be a good thing too. It is the command period of the 1960s etc that gave the USA much of the leg up it needed to get going in electronics etc.
The adversarial approach also sees so many US companies in court. The primary goal of fighting over IP is to beat up competitors. Rather protect your junk product line than allow your competitor to play on an even playing field and force you to make better products.
Unfortunately, I think many of us are still tied to this pre-conceived notion that everything about China is about uisng exisiting IP/design and making it cheaper. I don't think that holds true any more. I will definitely dig deeper.
A really good point. I don't think as big a continent as the United States can afford to stay just focused on developing IPs or R&D. You need to make stuff. Only then, you are creating more jobs in a community that supports manufacturing.
I don't disagree with the sentiment. Huawei is a good example of a hugely successful Chinese company that is competing in the international arena.
However, China will have to loosen government control and allow transparency and the rule of law to solidify before they can truly take their place as an equal on the world's free enterprise economic stage.
Do the Chinese really need to be creative to succeed ? Not so long as the West gets hollowed out by outsourcing and small companies here have no choice but to sell their IP. But it is doubtful if a large country like the US can maintain its social order w/o manufacturing by just turning into a R&D shop for China. We are neither like tiny Switzerland / Singapore ( precision instruments ) or parasites like the UK ( middle-men between the English only US and the non-English speaking worlds ). Size matters - both ways.
It is just naive and ignorant to believe that China would not be able to have companies just as famous and big as USA. Just wait and see.
It is with excitement I'm looking forward to the
future and the new global market place development.
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