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Cheap stuff from China has done quite a bit to help the world develop. How they produce and export for less than the cost of raw materials in the west is, IMHO, one of the great mysteries of economics.



1) low wages

2) no environmental regulations

3) governmental policies


4) economies of scale

5) lower costs of living relative to the west

6) less barriers to entry and less middlemen sucking out money



8) markup and living wage being paid by the supplier of the US raw materials.

9) government regulation governing the contents of those raw materials e.g. Prop 65.


4.5) Central planning for various industries to reduce logistics costs.

https://www.youtube.com/watch?v=myf_bJv20NE touches on it (26 minutes in). That you can order a chip you need... and its made a few blocks away.

Detroit (and the midwest auto industry) used to be like this - where whatever you needed was fairly close already. Not so much anymore. I'd have to dig up the cost difference in a slack (I asked about it), but IIRC, the majority of the price difference was not the difference in the cost of labor on a $30 item, but that at the scale things are being made the logistics isn't as expensive (you can buy 1000 chips and get them in a day or so rather than needing to buy 10,000 chips and needing for them to be shipped from 1000 miles away that will get here next week).


Would be nice if someone did a dissertation level analysis on this and really got into the details. It seems like there's a lot of "Just So" stories that get thrown around and not a lot of deep research. If there were, perhaps we'd find something that's leading to a sizeable amount of the cost differential that could be adjusted by policy makers.


1.1) disregard for worker safety and well being


That goes hand in hand with "disregard environmental regulation."




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