China stealing more money, jobs than you think

[Ausm]

Originally posted by: StormRider

Originally posted by: Xavier434

Originally posted by: StormRider
Is there any possibility that it is you that do not see the big picture?

Your position sounds very similar to the position many in the US had when they felt threatened by Japan. "Don't buy Japanese cars!", they screamed as they smashed Japanese cars with baseball bats in front of television cameras. "Only buy American cars! If you buy Japanese cars you're putting American workers out of jobs! You're only hurting yourself -- by saving yourself a few bucks now, you're ruining America's economy for the future -- and that means you'll reduce your chances of finding a job where the pay is reasonable"

What exactly has happened since that time? Yes, Michigan has lost a lot of automotive jobs. But that was offset by Japanese companies opening factories in our south (Tennessee, Kentucky etc).

Automotive Jobs in US

How do we know that in the future the same thing won't happen with China? Maybe China will also open factories in the US.

Different industries from different countries result in different outcomes. Japan is extremely different from China both now and in the past in regards to many different industries and economics in general. So much to the point where I would venture to say that you are comparing apples with oranges.

A better question to ask yourself is how do you know the result will be more jobs in the long run? A good set of follow up questions would be, "Are you willing to take that chance? What is at risk if you are wrong?"

Also consider why China would open factories over here and employ Americans when we demand such high wages in comparison to the Chinese? It is not like China is lacking people to fill them either.

Regardless, I hope you are right because that is the only good thing that can happen unless the government steps in and prevents so many jobs going over seas.

Japan was known as a producer of cheap knock-off products in the past. Their workers worked for much lower wages compared to American workers. They also had a reputation of being robotic workaholics. We were told that American workers could not compete with that -- because Japan doesn't play fair.

However as living standards improved, demand for higher wages in Japan made American workers/factories more competitive. In addition, other countries like South Korea was able to produce products more cheaply than Japan so a lot of manufacturing moved to South Korea. Then South Korea's living standards and wages increased and manufacturing started to move to the cheaper China.

China's living standard are increasing. Wage increases are occurring in China. I just heard on NPR that Walmart has signed a contract with the government unions in China to increase wages by 8% over the next two years there. Some manufacturing is already moving from China to other countries such as Vietnam because it's cheaper.

My point is that history has shown that the free market has lifted a lot of countries from poverty while supplying the richer countries with cheaper and more affordable products. Wages have always risen in these poorer countries. Eventually, there will come a time when there aren't any really dirt poor countries anymore (at least that is my hope) and the US will be competitive again.

Meanwhile, some parts of the country might be hit hard for a little while. But it's usually been temporary. For example, the South lost a lot of textile jobs but it's starting to pick up a lot of automotive jobs now. In the end, was this the right move? I think so. Why would we want the South to remain a low skilled textile industry instead of progressing into a more skilled automotive industry?

If we had "protected" the textile industry, most of us would pay a lot more for clothes, the South workforce would still be low skilled, low educated textile workforce and those poor countries would still be poor.

BTW, here is one possible reason why I think China (or any other country) might start up factories here: The price of fuel is so high it might be cheaper to start a factory here to service America instead of building products in China and shipping them here.

I think COMPARING China to Japan is like comparing apples to oranges. We FORCED Japan to play fair and they eventually did that. I doubt China would ever capitulate to anything that remotely resembles "fair trade".

 

[frostedflakes]

You bring up some good points StormRider. What kind of effect does population have on this, though? Surely you'd have to pump significantly more money into the economy to increase the standard of living for billions of Chinese and Indians vs. millions of Japanese and South Koreans. Not to mention Japan and South Korea received a lot of help from the US government following WWII. Who's to say that this wasn't the main reason for their prosperity, and not offshoring.

But I'm really interested in reading up on this, if anybody has suggestions for good books about offshoring/outsourcing (either for or against), please share.

 

[rudder]

Originally posted by: Skyclad1uhm1
OMG! You're opposing a free market economy! That must mean you are a Communist!

If you want to buy a new PC and can pick between an American seller and a non-American seller selling the exact same hardware, but the first asking $2500 and the second asking $1000, would you feel bad when chosing the second? I wouldn't.

I bought a nice air of New Balance running shoes that were made in the U.S. I think they cost around $65. Which was acutally about $10 cheaper than the made in China Nike shoes that were right next to it (and I am not comparing top of the line Nike to budget New Balance shoes). Go figure.

 

[Xavier434]

Originally posted by: frostedflakes
You bring up some good points StormRider. What kind of effect does population have on this, though? Surely you'd have to pump significantly more money into the economy to increase the standard of living for billions of Chinese and Indians vs. millions of Japanese and South Koreans. Not to mention Japan and South Korea received a lot of help from the US government following WWII. Who's to say that this wasn't the main reason for their prosperity, and not offshoring.

But I'm really interested in reading up on this, if anybody has suggestions for good books about offshoring/outsourcing (either for or against), please share.

Their population and government is mostly why I do not think the end result will be anything close to that of Japan. Beyond that, it really is a lot to ride on and we do need to consider the possibility of it not working out in our favor in the end. Are we getting ourselves into something that will be very difficult to recover from if that is the case or not? I think it will be extraordinarily difficult.

 

[fleshconsumed]

Originally posted by: rudder

Originally posted by: Skyclad1uhm1
OMG! You're opposing a free market economy! That must mean you are a Communist!

If you want to buy a new PC and can pick between an American seller and a non-American seller selling the exact same hardware, but the first asking $2500 and the second asking $1000, would you feel bad when chosing the second? I wouldn't.

I bought a nice air of New Balance running shoes that were made in the U.S. I think they cost around $65. Which was acutally about $10 cheaper than the made in China Nike shoes that were right next to it (and I am not comparing top of the line Nike to budget New Balance shoes). Go figure.

Where can you buy these? I need running shoes and would like to check them out seeing how most of the chinese/indian/bangladesh made shoes are simply.... obtuse.

 

[Ausm]

Originally posted by: StormRider

Originally posted by: Xavier434

Originally posted by: Vonkhan

Originally posted by: Ausm

Originally posted by: HombrePequeno
So how is this stealing jobs? They do the same job for cheaper. Explain to me how that's stealing.

It's not stealing jobs ...it's putting Americans out of work for lesser quality knockoffs.


Ausm

How do we know that in the future the same thing won't happen with China? Maybe China will also open factories in the US.

LMAO...I doubt it would EVER happen because the Chinese would have to follow our rules and regulations. I don't think the Chinese would be capable of this from seeing their workmanship first hand that would NEVER happen.

 

[NaughtyGeek]

Originally posted by: fleshconsumed

Originally posted by: rudder

Originally posted by: Skyclad1uhm1
OMG! You're opposing a free market economy! That must mean you are a Communist!

If you want to buy a new PC and can pick between an American seller and a non-American seller selling the exact same hardware, but the first asking $2500 and the second asking $1000, would you feel bad when chosing the second? I wouldn't.

I bought a nice air of New Balance running shoes that were made in the U.S. I think they cost around $65. Which was acutally about $10 cheaper than the made in China Nike shoes that were right next to it (and I am not comparing top of the line Nike to budget New Balance shoes). Go figure.

Where can you buy these? I need running shoes and would like to check them out seeing how most of the chinese/indian/bangladesh made shoes are simply.... obtuse.

If you've got a Modell's by you they sell New Balance. I'm pretty sure Foot Locker and such carry them as well. Mind you, the shoes are made in the USA with imported materials so it's not 100% US, but a damn sight better than the slave trade Nikes.

 

[StormRider]

Chinese Factories in the U.S?

 

[Ausm]

Originally posted by: StormRider
Chinese Factories in the U.S?

Hmm the build it over here to sell to us because the shipping is cheaper. I wonder how many people they will get to work there if they pay wages and bennies like they do in China. For that matter, It's a step in the right direction I guess but i will be long gone before the imbalance ever equalizes.

 

[StormRider]

Here are some articles that I found that support the things that I've said:

Worker shortages and Rising Wages in China?

China to build cars in the US?

Factory jobs returning to US?

 

[Craig234]

Originally posted by: Ausm

Originally posted by: Xavier434

Originally posted by: Vonkhan

Originally posted by: Ausm

Originally posted by: HombrePequeno
So how is this stealing jobs? They do the same job for cheaper. Explain to me how that's stealing.

It's not stealing jobs ...it's putting Americans out of work for lesser quality knockoffs.


Ausm

Well, but then most Americans don;t seem to mind the lesser quality knockoffs as long as they save a few bucks ...

The problem is that most Americans do not put the whole puzzle together. They do not see how by saving a few bucks is resulting in less jobs for the country and a worse economy. They do not see that saving a few bucks might actually contribute to reducing their chances of either finding a job where the pay is reasonable or getting a fair raise. In the end, they lose more than they save. They just don't know it.

Well said and true.

Ausm

The thing is, the answer isn't consumets seeing that and chooseing to buy American.

Like it or not, the fact is, Consumers generally will choose lower prices.

The effective way to deal with that is for the prices to reflect the differences - 'oh, you have slave labor while we protect our workers? That costs X$, and there's a tarrif for that'.

That still allows for trade, but protects the extra worker protections that cost money.

It requires having the prices reflect the issue, not saying 'think about it when buying'.

 

[Craig234]

Originally posted by: Atreus21

Originally posted by: frostedflakes

Originally posted by: HombrePequeno
So how is this stealing jobs? They do the same job for cheaper. Explain to me how that's stealing.

It's not stealing, but just out of curiosity... Do you think it's fair for corporations to use predatory pricing to force competitors out of the market? I'd think most would say no, considering we have antitrust laws in place to prevent such acts. I really don't see how this is much different, there's no way the first world can compete with second and third world wages.

Yes it's fair. When you compete, you're supposed to play to win.

Then it's fair for a baseball team to bribe an opponent's family member to get them sick and unable to play, it's fair to disable their transportation, etc.

Atreus, you clearly show here you have lost sight of the purpose of the economic system, to effectively *meet society's needs* with the production of affordable goods and services.

Predatory pricing is a clear violation of that goal - in the interest of the predator and not of society. Your defending it shows you are not ready to comment on economic issues IMO.

 

[Craig234]

Originally posted by: HombrePequeno

Originally posted by: frostedflakes

Originally posted by: HombrePequeno
So how is this stealing jobs? They do the same job for cheaper. Explain to me how that's stealing.

It's not stealing, but just out of curiosity... Do you think it's fair for corporations to use predatory pricing to force competitors out of the market? I'd think most would say no, considering we have antitrust laws in place to prevent such acts. I really don't see how this is much different, there's no way the first world can compete with second and third world wages.

So you would prefer the 3rd world got no jobs and they all starve just to keep out wages high?

I've always said a balanced approach is needed, which allows for third-world growth, but with protections for the developed nations' higher costs/standard of living.

Simply having 'free trade' serves mainly to meet at an ugly place in the middle, where the developed nations are pulled down (except the very wealthy, who make a killing), while the developing nations do better, but not as much better as if the developed nations were still protected.

The problem is, no one's much looking out for interests other than the very wealthy's, and the policies are blindly rushing to just that ugly middle ground.

 

[NaughtyGeek]

Originally posted by: Craig234


The thing is, the answer isn't consumets seeing that and chooseing to buy American.

Like it or not, the fact is, Consumers generally will choose lower prices.

The effective way to deal with that is for the prices to reflect the differences - 'oh, you have slave labor while we protect our workers? That costs X$, and there's a tarrif for that'.

That still allows for trade, but protects the extra worker protections that cost money.

It requires having the prices reflect the issue, not saying 'think about it when buying'.

You hit the nail on the head, but good luck convincing some of the folks here. I believe the term they will label you with is "protectionist" or perhaps they may even go so far as to call you an "isolationist."

 

[Craig234]

Originally posted by: NaughtyGeek

Originally posted by: Craig234


The thing is, the answer isn't consumets seeing that and chooseing to buy American.

Like it or not, the fact is, Consumers generally will choose lower prices.

The effective way to deal with that is for the prices to reflect the differences - 'oh, you have slave labor while we protect our workers? That costs X$, and there's a tarrif for that'.

That still allows for trade, but protects the extra worker protections that cost money.

It requires having the prices reflect the issue, not saying 'think about it when buying'.

You hit the nail on the head, but good luck convincing some of the folks here. I believe the term they will label you with is "protectionist" or perhaps they may even go so far as to call you an "isolationist."

Thanks. They'd be right to call me a 'protectionist', just not in a pejorative sense (not for the sake of simply protecting people from competition, but only to balance the needs to protect the labor standards we'd like to see everyone have), but they'd be wrong to say isolationist.

The US was hardly lacking international trade even from its founding, during over a century that the federal government was almost entirely funded from tariff taxes.

The simple fact is that the owners would like to drive the cost of labor way, way down, harming the standard of living of Americans, and democracy prevents them doing it directly, so instead they do it indirectly with a massive PR campaign to get public support for 'free trade' which just coincidentally happens to have the effect of driving US wages way down, as they compete with the poor of the world.

 

[HombrePequeno]

Originally posted by: frostedflakes

Originally posted by: HombrePequeno

Originally posted by: frostedflakes

Originally posted by: HombrePequeno
So how is this stealing jobs? They do the same job for cheaper. Explain to me how that's stealing.

It's not stealing, but just out of curiosity... Do you think it's fair for corporations to use predatory pricing to force competitors out of the market? I'd think most would say no, considering we have antitrust laws in place to prevent such acts. I really don't see how this is much different, there's no way the first world can compete with second and third world wages.

So you would prefer the 3rd world got no jobs and they all starve just to keep out wages high?

Do you really think corporations give a shit about third world workers? It's all about the bottom line; nothing more, nothing less.

That bottom line still provides a steady income to the people of areas where subsistence farming was previously the main source of jobs.

You are correct: corporations do not give a crap about third world workers. They do, however, need cheap labor. They also need to pay enough so that workers will come and work for them which means they have to pay them more than what they were previously making. Not allowing the corporations to operate there by putting up trade barriers eliminates the possibility of those jobs which puts many on the verge of starvation.

 

[jackace]

My point in posting this was not to bring up labor jobs we are losing. The numbers in the article show 31% of the jobs lost were jobs that require a college degree. What's the future of our country going to be when college level jobs begin leaving this country in mass? China has a HUGE population and they work hard. They also have a communist government which can do many things to "control" the population.

 

[HombrePequeno]

Originally posted by: jackace
My point in posting this was not to bring up labor jobs we are losing. The numbers in the article show 31% of the jobs lost were jobs that require a college degree. What's the future of our country going to be when college level jobs begin leaving this country in mass? China has a HUGE population and they work hard. They also have a communist government which can do many things to "control" the population.

Well maybe we should seek to keep the ones who come here to study instead of just giving them student visas and then them taking their quality American education and bringing it back home to teach others.

 

[StormRider]

Originally posted by: HombrePequeno

Originally posted by: frostedflakes

Originally posted by: HombrePequeno

Originally posted by: frostedflakes

Originally posted by: HombrePequeno
So how is this stealing jobs? They do the same job for cheaper. Explain to me how that's stealing.

It's not stealing, but just out of curiosity... Do you think it's fair for corporations to use predatory pricing to force competitors out of the market? I'd think most would say no, considering we have antitrust laws in place to prevent such acts. I really don't see how this is much different, there's no way the first world can compete with second and third world wages.

So you would prefer the 3rd world got no jobs and they all starve just to keep out wages high?

Do you really think corporations give a shit about third world workers? It's all about the bottom line; nothing more, nothing less.

That bottom line still provides a steady income to the people of areas where subsistence farming was previously the main source of jobs.

You are correct: corporations do not give a crap about third world workers. They do, however, need cheap labor. They also need to pay enough so that workers will come and work for them which means they have to pay them more than what they were previously making. Not allowing the corporations to operate there by putting up trade barriers eliminates the possibility of those jobs which puts many on the verge of starvation.

That's what a lot of people don't realize. They keep using terms like "slave labor" and "taking advantage of workers" in a massive PR attempt to sway people to their way of thinking.

I come from a family that immigrated from China to the US. My parents did not finish high school and they worked long hard hours in restaurants. My parents didn't think of themselves as slave worker or being taken advantage of -- rather they thought that they were given an opportunity. Eventually they saved enough to partner up with some co-workers and family to buy their own restaurant.

I'm not saying that there aren't any cases of poor working conditions or of workers being taken advantage of. But the bottom line is for many of these people (subsistence farmers as you mentioned), it is a major step up from what they were doing before and these factory jobs gives many of them hope for a better future -- otherwise you wouldn't have so many people streaming into the cities of China from the country-side looking for factory jobs.

And eventually as their standard of living improves these workers will demand better working conditions and higher wages. That has happened in our own history. It has happened in Japan. It has happened in South Korea.

I don't think there is a need to apply tariffs to penalize foreign factories if they don't meet all our standards. For example, maybe one of our standards is to have modern bathrooms in all factories but that could be hard to implement at the beginning in a dirt poor country where most people crap in a hole in the ground. Maybe it's better to allow early factories to have less than satisfactory bathrooms and as living standards improve, workers will demand better bathrooms -- and at this point in time there is infrastructure to support this (since living standards have improved).

Using tariffs to negate any price advantage can present a barrier too high for a corporation to want to begin investing in a third world country. And that just means those poor countries will always stay poor.

So, in other words, those people who claim to be "looking out for workers" are actually advocating policies that prevent third world countries from moving up just to maintain artificially high wages for us. And in my opinion, this is somewhat selfish and short-term thinking.

 

[jackace]

Originally posted by: StormRider

Originally posted by: HombrePequeno

Originally posted by: frostedflakes

Originally posted by: HombrePequeno

Originally posted by: frostedflakes

Originally posted by: HombrePequeno
So how is this stealing jobs? They do the same job for cheaper. Explain to me how that's stealing.

It's not stealing, but just out of curiosity... Do you think it's fair for corporations to use predatory pricing to force competitors out of the market? I'd think most would say no, considering we have antitrust laws in place to prevent such acts. I really don't see how this is much different, there's no way the first world can compete with second and third world wages.

So you would prefer the 3rd world got no jobs and they all starve just to keep out wages high?

Do you really think corporations give a shit about third world workers? It's all about the bottom line; nothing more, nothing less.

That bottom line still provides a steady income to the people of areas where subsistence farming was previously the main source of jobs.

You are correct: corporations do not give a crap about third world workers. They do, however, need cheap labor. They also need to pay enough so that workers will come and work for them which means they have to pay them more than what they were previously making. Not allowing the corporations to operate there by putting up trade barriers eliminates the possibility of those jobs which puts many on the verge of starvation.

That's what a lot of people don't realize. They keep using terms like "slave labor" and "taking advantage of workers" in a massive PR attempt to sway people to their way of thinking.

I come from a family that immigrated from China to the US. My parents did not finish high school and they worked long hard hours in restaurants. My parents didn't think of themselves as slave worker or being taken advantage of -- rather they thought that they were given an opportunity. Eventually they saved enough to partner up with some co-workers and family to buy their own restaurant.

I'm not saying that there aren't any cases of poor working conditions or of workers being taken advantage of. But the bottom line is for many of these people (subsistence farmers as you mentioned), it is a major step up from what they were doing before and these factory jobs gives many of them hope for a better future -- otherwise you wouldn't have so many people streaming into the cities of China from the country-side looking for factory jobs.

And eventually as their standard of living improves these workers will demand better working conditions and higher wages. That has happened in our own history. It has happened in Japan. It has happened in South Korea.

I don't think there is a need to apply tariffs to penalize foreign factories if they don't meet all our standards. For example, maybe one of our standards is to have modern bathrooms in all factories but that could be hard to implement at the beginning in a dirt poor country where most people crap in a hole in the ground. Maybe it's better to allow early factories to have less than satisfactory bathrooms and as living standards improve, workers will demand better bathrooms -- and at this point in time there is infrastructure to support this (since living standards have improved).

Using tariffs to negate any price advantage can present a barrier too high for a corporation to want to begin investing in a third world country. And that just means those poor countries will always stay poor.

So, in other words, those people who claim to be "looking out for workers" are actually advocating policies that prevent third world countries from moving up just to maintain artificially high wages for us. And in my opinion, this is somewhat selfish and short-term thinking.

The problem with China is two-fold. The communist government and the large amount of people in the country. Japan has ~125 million people and South Korea has ~50 million. Compare that to China's ~1.3 billion. How long will it take under a communist government for China's standard of living to reach ours? In the process how many more industries/jobs are we going to lose?

According to recent data in the article i posted we are losing more and more college level jobs. These are not people who graduated HS and went to the local factory to find a job. These are people that spent 4+ years in college, and spent thousands of dollars to educate themselves.

To address your last paragraph people are not talking about all workers in the world. They are talking about the American worker. Sure they might care about 2nd or 3rd world countries, but when you can't find a job in your own country you tend to worry about that problem first.

 

[Skyclad1uhm1]

Originally posted by: Craig234

Originally posted by: Skyclad1uhm1

If you want to buy a new PC and can pick between an American seller and a non-American seller selling the exact same hardware, but the first asking $2500 and the second asking $1000, would you feel bad when chosing the second? I wouldn't.

Which is why we're in for a lot of negative economic results as the third-world population becomes a competitive, low-wage workforce - the dream of billionares, nightmare of others.

The trick is switching to a knowledge based economy, rather than a manual labour based one. If your neighbour can make something cheaper than you you cannot make money by doing the same. But if you are higher educated you can invent the stuff he makes, do research, write the software for the hardware, or do something else which requires more knowledge than just putting some parts together.

If you have a foreign worker who is totally illiterate and who doesn't speak a word of the local language he can still put a PC together if he gets the parts. But he cannot be a lawyer, a doctor or a politician, simply because he cannot communicate with people. That's where the local people have a huge advantage, IF the country has moved it's focus to education rather than manual labour.

The Netherlands used to be one of the frontrunners in that area, until we got several governments in a row which were trying to copy Bush' policies and which cut down spending on education to such a level that now most of the new generation of future teachers does not have the basic understanding of maths a 12 year old should have.

 

[jackace]

Originally posted by: Skyclad1uhm1

Originally posted by: Craig234

Originally posted by: Skyclad1uhm1

If you want to buy a new PC and can pick between an American seller and a non-American seller selling the exact same hardware, but the first asking $2500 and the second asking $1000, would you feel bad when chosing the second? I wouldn't.

Which is why we're in for a lot of negative economic results as the third-world population becomes a competitive, low-wage workforce - the dream of billionares, nightmare of others.

The trick is switching to a knowledge based economy, rather than a manual labour based one. If your neighbour can make something cheaper than you you cannot make money by doing the same. But if you are higher educated you can invent the stuff he makes, do research, write the software for the hardware, or do something else which requires more knowledge than just putting some parts together.

If you have a foreign worker who is totally illiterate and who doesn't speak a word of the local language he can still put a PC together if he gets the parts. But he cannot be a lawyer, a doctor or a politician, simply because he cannot communicate with people. That's where the local people have a huge advantage, IF the country has moved it's focus to education rather than manual labour.

The Netherlands used to be one of the frontrunners in that area, until we got several governments in a row which were trying to copy Bush' policies and which cut down spending on education to such a level that now most of the new generation of future teachers does not have the basic understanding of maths a 12 year old should have.

I mostly agree with this, but again if you read the article it points out that China's aim is on high tech and research sectors. They are not there yet, but that is their aim.

Another problem we run into is can the country support ~300 million people with a mostly knowledge based economy?

 

[Craig234]

Originally posted by: StormRider

Using tariffs to negate any price advantage can present a barrier too high for a corporation to want to begin investing in a third world country. And that just means those poor countries will always stay poor.

So, in other words, those people who claim to be "looking out for workers" are actually advocating policies that prevent third world countries from moving up just to maintain artificially high wages for us. And in my opinion, this is somewhat selfish and short-term thinking.

Your point is well taken, and I've addressed it be calling for a balanced approach. Simply putting Americans in competition with the poor Chinese doesn't work for Americans.

 

[Skyclad1uhm1]

Originally posted by: jackace

Originally posted by: Skyclad1uhm1

Originally posted by: Craig234

Originally posted by: Skyclad1uhm1

If you want to buy a new PC and can pick between an American seller and a non-American seller selling the exact same hardware, but the first asking $2500 and the second asking $1000, would you feel bad when chosing the second? I wouldn't.

Which is why we're in for a lot of negative economic results as the third-world population becomes a competitive, low-wage workforce - the dream of billionares, nightmare of others.

The trick is switching to a knowledge based economy, rather than a manual labour based one. If your neighbour can make something cheaper than you you cannot make money by doing the same. But if you are higher educated you can invent the stuff he makes, do research, write the software for the hardware, or do something else which requires more knowledge than just putting some parts together.

If you have a foreign worker who is totally illiterate and who doesn't speak a word of the local language he can still put a PC together if he gets the parts. But he cannot be a lawyer, a doctor or a politician, simply because he cannot communicate with people. That's where the local people have a huge advantage, IF the country has moved it's focus to education rather than manual labour.

The Netherlands used to be one of the frontrunners in that area, until we got several governments in a row which were trying to copy Bush' policies and which cut down spending on education to such a level that now most of the new generation of future teachers does not have the basic understanding of maths a 12 year old should have.

I mostly agree with this, but again if you read the article it points out that China's aim is on high tech and research sectors. They are not there yet, but that is their aim.

Another problem we run into is can the country support ~300 million people with a mostly knowledge based economy?

Without technological progress China would rely heavily on 'the West'. If they can get a more leading position they can make money both from the production as well as from the technological knowledge and inventions.

Without production knowledge isn't enough, but without knowledge all you can provide is cheap labour. If you move production to developing countries they get a huge economy boost, and since it's cheap production compared to the 'rich countries' you can move the focus to knowledge. Look at how many billions are currently pumped into the agriculture in the EU and the US, just to keep them competitive compared to poorer countries. If you'd pump 1/10th of that money into a poor country to improve the infrastructure and agriculture there you'd be able to get cheaper food while at the same time boosting that country to a higher level.
But many countries are afraid to take that step, especially because of the risk involved in not having your own food production. Yet if you look at the labour and land cost it would be highly beneficial to move at least some of the farms to different regions, even within the US or EU.

 

[Drift3r]

Originally posted by: dmcowen674

Originally posted by: MadRat
When China has OSHA, MSHA, civil rights, social security, medicare, and all those other similar heavy burden on the U.S. economy bureaucracies then wake me up.

So get rid of OSHA, MSHA, civil rights, social security and medicare=problem solved for the U.S.?

That would basically turn us into a 3rd world nation.