As China Surges, It Also Proves A Buttress to American Strength

[charrison]

DONGGUAN, China -- Frank Lin joined fellow Chinese furniture makers at a hotel here last summer to discuss some alarming news from America: U.S. furniture companies were asking Washington to investigate ?;illegal?; Chinese trade practices and restrict Chinese sales to the U.S. Among the petitioners was one of Mr. Lin's longtime customers, Virginia-based Hooker Furniture Corp.

Mr. Lin's dismay turned to confusion days later when he received an e-mail from Hooker's chief executive. Hooker looked forward to an ?;exciting future?; doing business with China, said the message, and wanted to ?;continue the extraordinary growth we have had in the last few years with Asian imports.?;

Indeed, thanks largely to the imports, Hooker has boomed. It closed a factory in North Carolina last summer but has boosted profits and dazzled investors with a stock that more than quadrupled in two years.

?;I just don't understand what they are doing. It makes no sense,?; Mr. Lin said after receiving the e-mail in August. On his desk lay designs sent from America. Lining the wall, newly crafted chairs stood ready for inspection by U.S. buyers. ?;If they don't import, they die. They need us. So why do they want to hurt us??; Mr. Lin wondered.

His bewilderment flows from a much bigger tension besetting U.S. economic relations with China -- and the economic forces that underpin America's global hegemony. China's rise both supports the American superpower and embodies some of its self-generated vulnerabilities.

....

One of Logitech's big sellers is a wireless mouse called Wanda, which sells to American consumers for around $40. Of this, Logitech takes about $8, while distributors and retailers take $15. A further $14 goes to suppliers that provide Wanda's parts: A Motorola Inc. plant in Malaysia makes the mouse's chips, and America's Agilent Technologies Inc. supplies the optical sensor. Even the solder comes from a U.S. company, Cookson Electronics, which has a factory in China's Yunnan province next to Vietnam.

Marketing is led from Fremont, Calif., where a staff of 450 earns far more than 4,000 Chinese employed in Suzhou. China's take from each mouse comes to a meager $3, which covers wages, power, transport and other overhead costs

 

[Dari]

China will soon be the biggest importer of American good should everything go right. But, to be honest, the vast majority of Chinese firms are incredibly unoriginal. THey steal intellectual property while the chinese gov't looks the other way. Fortunately, there is a precedent for this. Back in the 1950s and 1960s, Japan used to sell almost everything counterfeit. However, as their economy grew, they began to realize the importance of intellectual property laws and the gov't and businesses started to respect such laws. Today, Japan is a wholly westernized nation. Hopefully the chinese will follow this route.

Aside from the totalitarian government, china today is wholly reminiscent of America in the 19th century, economics-wise. Back then, as in China today, you have a highly intellectual work-force with an abundance of plebians who are willing to work the factories for little to nothing. Furthermore, you have a nation that can sustain itself without needing outside help.

 

[Pennstate]

Just walk into Value city furniture and ask to see a piece that is MADE in the USA. I'll bet you $5 that you won't find one.

 

[charrison]

Originally posted by: Pennstate
Just walk into Value city furniture and ask to see a piece that is MADE in the USA. I'll bet you $5 that you won't find one.

Still quite a bit of furniture made here in the US.

 

[Witling]

Dari, as I've gotten older I've come to appreciate the use of the word "should." As in "should everything go right." But of course, everything won't go right. As a codger, I will confirm your observation about Japan. When I was young, in the '50's, "Made in Japan" meant the cheapest sort of junk. For those who don't know how the story turned out, "Made in Japan" doesn't mean that any more. I predict that there will not be a shooting war between China and the U.S. but there will be a giant struggle for the oil in the Caspian basin. We've just made the first move with Iraq.

EDITED: Curiously enough, it looks like Orwell was right about his regional groupings in his book 1984. I do not believe he was right about other things. We have more subtle ways of calming the population -- Survivor.

 

[digitalsm]

Originally posted by: Pennstate
Just walk into Value city furniture and ask to see a piece that is MADE in the USA. I'll bet you $5 that you won't find one.

Go to any upscale department store and I bet you will find plenty. The Alan White Company based out of Memphis, TN(formerly based out of Stamps, Arkansas) sells to almost every upscale department store, as well as discout stores, including Costco. As well as other furniture only stores like Lacks, etc. Alan White has manufacturing plants in Arkansas(not for long though), two in Mississippi, and I believe one in Alabama.

Dont be fooled there are alot of american furniture companies still. Most do not cater to the low priced market.

 

[Dari]

Originally posted by: Whitling
Dari, as I've gotten older I've come to appreciate the use of the word "should." As in "should everything go right." But of course, everything won't go right. As a codger, I will confirm your observation about Japan. When I was young, in the '50's, "Made in Japan" meant the cheapest sort of junk. For those who don't know how the story turned out, "Made in Japan" doesn't mean that any more. I predict that there will not be a shooting war between China and the U.S. but there will be a giant struggle for the oil in the Caspian basin. We've just made the first move with Iraq.

The first move in Iraq, eh? Now you're getting the bigger picture. It's funny how people scurry over scraps when an invisible hand hovers above.

But I digress. May China be successful economically. Why? Because if she's successful, the rest of the world will be too. However, she cannot take lead of anything alone. She will need partners and we will be watching her every move, friend or foe.

 

[Witling]

China will be successful economically for two reasons. (1) The Chinese work hard and do good work. (2) She's big enough to bully other countries. Hey, it worked for us, why shouldn't it work for them? There are many countries around the world that have hard working people. Whether they can attract capital is a completely different question. Before Iraq, I would have thought that the days of gun boat diplomacy were over. They are, however, over for China.

Incidentally, without meaning to rag on America, I don't work hard in the same way that struggling people do. I don't want to work that hard. Yes, I'm privileged. As they become privileged, hungrier people will take the unskilled jobs. Didn't you mention Japan?

 

[Dari]

Originally posted by: Whitling
China will be successful economically for two reasons. (1) The Chinese work hard and do good work. (2) She's big enough to bully other countries. Hey, it worked for us, why shouldn't it work for them? There are many countries around the world that have hard working people. Whether they can attract capital is a completely different question. Before Iraq, I would have thought that the days of gun boat diplomacy were over. They are, however, over for China.

Incidentally, without meaning to rag on America, I don't work hard in the same way that struggling people do. I don't want to work that hard. Yes, I'm privileged. As they become privileged, hungrier people will take the unskilled jobs. Didn't you mention Japan?

The Chinese can try to bully the old-fashioned way, but it won't work. The world is becoming far too integrated for them to be able to bypass international. In essence we saw this in the before the Iraqi Campaign. Cheney wanted to do things the old way by bypassing the UN. Powell wanted to do things the new way by going through the United Nations and using the existing legal arsenal and her threat in the post 9-11 world. Wisely, Bush chosed the latter route because it enabled us to work with others while still leading. It also give us a lot of cover. China must show herself to be adhering to international law for others to respect her actions. Money may talk, but the pen is becoming much more powerful than the sword as globalization takes hold. I doubt if the Chinese understand this fully.

Fortunately, the United States can use her military and diplomatic powers to see through her interests.

 

[gsaldivar]

Originally posted by: digitalsm
Dont be fooled there are alot of american furniture companies still. Most do not cater to the low priced market.

Most US furniture manufacturers would, if they could...

In reality though, labor costs in the US are simply too high to permit them to compete with low-priced imports.

The result is that US furniture manufacturers compete for mid- to hi-end market, not by choice, but out of necessity.

 

[digitalsm]

Originally posted by: gsaldivar

Originally posted by: digitalsm
Dont be fooled there are alot of american furniture companies still. Most do not cater to the low priced market.

Most US furniture manufacturers would, if they could...

In reality though, labor costs in the US are simply too high to permit them to compete with low-priced imports.

The result is that US furniture manufacturers compete for mid- to hi-end market, not by choice, but out of necessity.

Yes and most are still making lots of money doing it..

 

[CWRMadcat]

Originally posted by: Dari

Originally posted by: Whitling
China will be successful economically for two reasons. (1) The Chinese work hard and do good work. (2) She's big enough to bully other countries. Hey, it worked for us, why shouldn't it work for them? There are many countries around the world that have hard working people. Whether they can attract capital is a completely different question. Before Iraq, I would have thought that the days of gun boat diplomacy were over. They are, however, over for China.

Incidentally, without meaning to rag on America, I don't work hard in the same way that struggling people do. I don't want to work that hard. Yes, I'm privileged. As they become privileged, hungrier people will take the unskilled jobs. Didn't you mention Japan?

The Chinese can try to bully the old-fashioned way, but it won't work. The world is becoming far too integrated for them to be able to bypass international. In essence we saw this in the before the Iraqi Campaign. Cheney wanted to do things the old way by bypassing the UN. Powell wanted to do things the new way by going through the United Nations and using the existing legal arsenal and her threat in the post 9-11 world. Wisely, Bush chosed the latter route because it enabled us to work with others while still leading. It also give us a lot of cover. China must show herself to be adhering to international law for others to respect her actions. Money may talk, but the pen is becoming much more powerful than the sword as globalization takes hold. I doubt if the Chinese understand this fully.

Fortunately, the United States can use her military and diplomatic powers to see through her interests.

The invasion of Iraq was sactioned by international law?

 

[kylebisme]

gah CWRMadcat, that is completely beside the point.

 

[DanceMan]

Originally posted by: digitalsm

Originally posted by: gsaldivar

Originally posted by: digitalsm
Dont be fooled there are alot of american furniture companies still. Most do not cater to the low priced market.

Most US furniture manufacturers would, if they could...

In reality though, labor costs in the US are simply too high to permit them to compete with low-priced imports.

The result is that US furniture manufacturers compete for mid- to hi-end market, not by choice, but out of necessity.

Yes and most are still making lots of money doing it..

Uh, it's my understanding that the furniture business was doing very badly. There have been many large-scale bankruptcies of both furniture retailers and furniture makers.