
Jack Welch: China losing competitiveness. Must Create '10,000 Apples' - chugger
http://www.bloomberg.com/news/2011-09-07/china-won-t-lose-competitiveness-for-3-5-years-welch-says.html
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wmeredith
I find the premise of this article (the 10,000 Apples thing) laughable-maybe
that's the point. Every business in the world is struggling to create 1 Apple
right now (except maybe Exxon-which is bigger today?). The chances of 10,000
Apples coming out of China's me-too business culture is too much of a long-
shot to be overstated.

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danmaz74
Me-too business culture? Wasn't it what was said about Japanese business
culture when it started to really grow after the war?

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chugger
And look at Japan now. They're currently in 2 decade-long recessions and
they're in even worse shape than us.

<http://en.wikipedia.org/wiki/Lost_Decade_(Japan)>

[http://www.washingtonpost.com/wp-
dyn/content/article/2008/10...](http://www.washingtonpost.com/wp-
dyn/content/article/2008/10/10/AR2008101002928.html)

~~~
chugger
@danmaz74

there were very little innovation that came out of Japan in the last 20 years.
They were overtaken by their Korean counterparts (LG/Samsung >
Sony/Panasonic/Toshiba/etc.) and American (HP/Dell/Apple/etc.). Ok you have
Toyota/Nissan/Honda,etc. but their success was not due to innovation but was
mostly due to GM/Ford/Chrysler's inability to make good cars.

~~~
Aga
That is a horribly limited view of innovation.

Innovation is not limited to only consumer end-products but happens through
the whole design-manufacture-logistics-market chain. This is where e.g. Toyota
has famously excelled.

There is more to this world than mobile phones and computers. A lot of
innovation happens in b2b end products also, with less fuzz.

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jisaacstone
There has always been countries with lower wages than China, so this can not
be the issue.

China has better infrastructure and lower levels of graft than other low-cost
countries, this is what has kept it competitive.

Not sure what the point of China needing to create '10,000 apples' is. If
manufacturing jobs are needed better to work for the existing Apple, maybe?

Or maybe the point is that China needs to create global brands to stay
competitive? This may or may not be true but without metrics it is just one
person's opinion.

And China has already started creating global brands.

"In 2010 the Haier brand had the world's largest market share in white goods,
with 6.1 per cent" <http://en.wikipedia.org/wiki/Haier>

"In Q2 2011, Lenovo was the third largest vendor of personal computers in the
world." <http://en.wikipedia.org/wiki/Lenovo>

... etc

~~~
chugger
That is exactly the issue, and it's already happening.

Why Factories Are Leaving China
<http://www.businessweek.com/magazine/content/10_21/b4179011>

_Fan is expanding his factory in Vietnam, where wages are $100 a month, one-
third what he pays in China._

Once it becomes too cost-prohibitive to manufacture products in China due to
inflation, HP, Samsung, Sony, Dell, Apple,etc. has no choice but to move their
operations to Vietnam, India, etc. China's main competitive advantage is being
eroded by inflation. They need to move up the supply chain from being a
manufacturer to seller/marketer, where they can charge more money based on
their brand (Apple/BMW/LV/etc.).

~~~
jisaacstone
Just I'm not sure that higher wages == no manufacture. Germany still makes
things sometimes?

The real challenge for China would be increasing the quality of their products
and/or manufacturing innovation.

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saraid216
So the news was that Jack Welch reads the news, just like the rest of us?

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hcack
From a bloomberg (business more than tech) point of view, Apple may be just
another "global brand."

Apple created the first successful personal computer, and personal computing
has since come to define the the we live in. That's slightly harder to
replicate.

There's more to Apple than their present bottom line.

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noahl
I found some data on this here: <http://www.bls.gov/fls/china.htm>

It has a table of cost per hour of Chinese manufacturing workers from 2002 to
2008. They went from $0.57 (2.1% of US wages) to $1.36 (4.2% of US wages) over
that time.

If this is in fact what he's talking about, then wages in China are still
incredibly low. Does anyone know what wages in Vietnam or Africa are like?

~~~
ippisl
The % of US wages doesn't make sense. many manufacturing workers in the US
earn minimum wage , which is between $5.15-$8.5 per hour.

So the figure should be 15%-20% of US wages.

~~~
ww520
Total cost? Health benefit, Social Security, Medicare, Unemployment insurance,
etc?

~~~
corysama
The chart at the bottom of the page pegs US manufacturing employees as costing
$32.26/hour in 2008.

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johnohara
Apple has about 50,000 employees worldwide. Creating 10,000 Apples in China
would in theory create 500,000,000 jobs -- or about 30% of the total
population.

Jack Welch's comment might not be too far off the mark.

