
China factory activity shrinks to six and a half year low as orders tumble - tokenadult
http://www.reuters.com/article/2015/08/21/us-china-economy-pmi-idUSKCN0QQ05H20150821
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rm_-rf_slash
First off, China has been getting more and more expensive over the years as
their labor costs rose and other developing countries started playing the same
game. Even Chinese companies outsource to Vietnam, Bangladesh, etc.

Second, China's bigger problem is that they lack sex, and that's not just a
dig at the one child policy. Sure, they have some lovely trains and airports,
but nobody says "I buy Vietnamese so someday I can buy Chinese." They say "I
buy Chinese so someday I can buy German."

China is simply not an aspirational brand. They have plenty of businesses that
mirror the West (Weibo for Twitter, Renren for Facebook, etc) which are highly
popular among Chinese (because the government often gives them no other
choice), but are little more than an eye-roll outside the Middle Kingdom.

Classic middle income trap scenario: too rich to compete by making things
cheap, too lame to compete on the high end. I would be interested in hearing a
rebuttal, but so far I have been unable to find one, on HN or otherwise.

Edit: Downvoting without giving an explanation doesn't count as a rebuttal. In
fact I'm not entirely sure what effect it is supposed to have, aside from
making you feel less insecure about your own opinions ;)

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rm999
You could make many of the same arguments about Japan post-WWII. As I
understand it, Japan stopped exporting as many low quality, low-margin
products during the 80s (largely due to the Ministry of International Trade
and Industry), and was able to very quickly gain a good reputation and brand.
I've heard they had a similar reputation to China before this.

China has been well-aware of this impending trend, I'm sure they can make
similar shifts. I think it's happening to some degree - I'm already impressed
with some Chinese companies, like Xiaomi.

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rm_-rf_slash
Xiaomi is a good example and I intentionally left it out so someone smart
could mention it ;). The engineering is quality, and I can see it becoming
popular outside of China.

Regarding manufacturing quality and the similar trajectory, you are correct.
But in the 80s and onward it wasn't just electronics we were getting from
Japan. Anime, jpop, ramen, sushi, all of these cultural products - which
couldn't quite be emblematic of anywhere else - made Japan a soft power
juggernaut.

Can China do the same? I'm not sure. Part of being cool is the ability to say
"fuck the man," whoever that is and in whatever way, but dissent is too
tightly managed for such an entity to be both globally enjoyed and accepted by
the state, lest others start asking questions about the way things are run.

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meatysnapper
Japan has always been fascinating to the West, from the moment Perry told them
to open the hell up. Japan has such an interesting wacky culture,
architecture, art, lifestyle. They've always had craftsmen the like of whom
can compete with the Germanic countries; something which few countries can
say. When it came time to industrialize, Japan was able to build very advanced
stuff on their own- the Zero, for example. And they make fantastic movies!

The Japanese language is also not super hard for the West to pronounce, and it
is even possible to learn it. The writing system(s) are a bit confusing, but
we can pronounce it. Contrast that with Chinese, and especially Chinese music.
Yeah, no. The operative question: Is there any reason to learn Chinese apart
from making money?

Taiwan, on the other hand, is an interesting place. Really good food, and it's
going to experience a major boom as a travel food destination in the near
future.

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rm_-rf_slash
Spot on. Especially about Taiwan. It's not that "China" is culturally lacking,
it's _Mao 's_ China, where the exact people capable of stimulating culture
from the ground up - intellectuals - were killed off if not dead from
starvation.

But Japanese being easier to learn than Chinese? I'm in shock: I've always
found Chinese to be simple and Japanese to be mind-bogglingly impenetrable,
even if I like it more.

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happyscrappy
It is mind boggling that the Mao-created famine that killed 40 million was
only ~50 years ago.

~~~
hga
I suppose if you're young enough. I was born in the middle of the Great Leap
Forward, but very fortunately in the US, came of political age during the
middle of the Cultural Revolution (which we're now learning, which should be
to no one's surprise, slaughtered and maimed millions) ... and all this was
brought into sharp relief when Nixon sundered the PRC from its alliance with
the USSR and went to China in 1972. Only someone with his impeccable anti-
Communist credentials could have pulled off that essential victory in the Cold
War (with, of course, the aid of the USSR, which offered us co-dominion, to
take out the PRC's nukes and rule the world together, at least for a while; we
declined and took that offer to Mao and company, who by then were not
surprised). So the politically aware of my generation and older know this sort
of thing, and know the leadership of the PRC is today only somewhat less
murderous.

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RachelF
This is big news, as it might signal that the Chinese economy is coming in for
a hard landing.

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1971genocide
This is bad new for everyone. China's economy is a the only thing that is
driving global demand - at least for the last few years after the financial
crisis.

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lucaspiller
From what I've read on Reddit (so take it with a grain of salt), a lot of
companies have recently been switching from having their goods manufactured in
China to in the U.S. Due to falling oil prices it doesn't work out much more
expensive, and the benefits from not having to wait 6+ weeks for a shipment
that may or may not be correct out weight the price difference.

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Asbostos
Apart from naive tribalism, is there any reason people so interested in
"driving manufacturing back to the US"? Isn't it better to let it happen in
whatever country buyers prefer to buy from? Maybe America doesn't need to make
so many low-tech products anymore. Maybe it can cope with ongoing unemployment
better than China can.

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Implicated
> Apart from naive tribalism, is there any reason people so interested in
> "driving manufacturing back to the US"?

Stimulating local economy?

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saiya-jin
that is interesting only if you are US resident, which many of us are not :)

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marcosdumay
Well, the people interested in "driving manufacturing back to the US" are
mostly US residents.

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pc2g4d
Maybe this downturn isn't actually a huge deal? Wait until the quarterly
service sector numbers next come out and see if they follow suit.

