Why China benefits as Exporter and Importer

Donald Chan/Reuters
People flooded Foxconn Technology with résumés at a 2010 job fair in Henan Province, China.

By CHARLES DUHIGG and KEITH BRADSHER

Published: January 21, 2012






When Barack Obama joined Silicon Valley’s top luminaries for dinner in California last February, each guest was asked to come with a question for the president.

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A production line in Foxconn City in Shenzhen, China. The iPhone is assembled in this vast facility, which has 230,000 employees, many at the plant up to 12 hours a day, six days a week.


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But as Steven P. Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: what would it take to make iPhones in the United States?
Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.
Why can’t that work come home? Mr. Obama asked.
Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.
The president’s question touched upon a central conviction at Apple. It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products.
Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.
However, what has vexed Mr. Obama as well as economists and policy makers is that Apple — and many of its high-technology peers — are not nearly as avid in creating American jobs as other famous companies were in their heydays.
Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.
“Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” said Jared Bernstein, who until last year was an economic adviser to the White House.
“If it’s the pinnacle of capitalism, we should be worried.”
Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”
Similar stories could be told about almost any electronics company — and outsourcing has also become common in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals.
But while Apple is far from alone, it offers a window into why the success of some prominent companies has not translated into large numbers of domestic jobs. What’s more, the company’s decisions pose broader questions about what corporate America owes Americans as the global and national economies are increasingly intertwined.
“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”

1. 
   

The report has got it completely wrong Panda, Capitalism, Greed, Profiteering, Corruption and Foreign Investment have trumped Patriotism and National Pride... Just has it has here in the UK.

malena stool wrote:The report has got it completely wrong Panda, Capitalism, Greed, Profiteering, Corruption and Foreign Investment have trumped Patriotism and National Pride... Just has it has here in the UK.

Yes malena , the Americans are suddenly realising that all this production moved to China and the imports of Chinese goods is the reason so many of their own are unemployed. The same has happened in the U.K. but consumers are quite happy to be able to buy goods cheaply,

Panda wrote:

malena stool wrote:The report has got it completely wrong Panda, Capitalism, Greed, Profiteering, Corruption and Foreign Investment have trumped Patriotism and National Pride... Just has it has here in the UK.

Yes malena , the Americans are suddenly realising that all this production moved to China and the imports of Chinese goods is the reason so many of their own are unemployed. The same has happened in the U.K. but consumers are quite happy to be able to buy goods cheaply,

It's an abomination that our MPs are allowed to invest in private enterprise, there is no way they can make unbiased policies while they're considering their own personal profits. They are worse than the profiteering bankers, we pay their wages, (not forgetting their expenses) in effect paying them to be insider traders. Small wonder the country has turned to tish.

Panda wrote:

malena stool wrote:The report has got it completely wrong Panda, Capitalism, Greed, Profiteering, Corruption and Foreign Investment have trumped Patriotism and National Pride... Just has it has here in the UK.

Yes malena , the Americans are suddenly realising that all this production moved to China and the imports of Chinese goods is the reason so many of their own are unemployed. The same has happened in the U.K. but consumers are quite happy to be able to buy goods cheaply,

So much of what we import from China is unusable Panda, we bought some LED Christmas lights this year, quite cheap but they didn't work and for us to take them back and complain would have cost more in diesel than to get our money refunded.

malena stool wrote:

Panda wrote:

malena stool wrote:The report has got it completely wrong Panda, Capitalism, Greed, Profiteering, Corruption and Foreign Investment have trumped Patriotism and National Pride... Just has it has here in the UK.

Yes malena , the Americans are suddenly realising that all this production moved to China and the imports of Chinese goods is the reason so many of their own are unemployed. The same has happened in the U.K. but consumers are quite happy to be able to buy goods cheaply,

So much of what we import from China is unusable Panda, we bought some LED Christmas lights this year, quite cheap but they didn't work and for us to take them back and complain would have cost more in diesel than to get our money refunded.

We live in a throw away society Malena. People want instant cheap gratification. They do not care where it comes from and how the people have to live who make it. If the product does not last just buy another. Society as a whole has to take some responsibility for it all. It would not happen if we did not comply!

You know what they say " you can lead a horse to water" etc

When I was in America recently , my Friend said there is a movement gathering momentum to boycott goods made in China . I pointed out that shoppers
are quite happy to buy goods made in China and Korea because they are so cheap, but she says Americans have just woken up to the fact that their
unemployment figures reflect the harm it has caused and they are willing to buy U.S. made products now and pay the extra.

Panda wrote:When I was in America recently , my Friend said there is a movement gathering momentum to boycott goods made in China . I pointed out that shoppers
are quite happy to buy goods made in China and Korea because they are so cheap, but she says Americans have just woken up to the fact that their
unemployment figures reflect the harm it has caused and they are willing to buy U.S. made products now and pay the extra.

Well done to them Panda. I hope we can get the same thing going here. I remember once before many years ago we were all encouraged to buy British goods and people used to check everything they bought to make sure it was.

Whether our society now would do it? I have my doubts! It would be fantastic if we did.

fuzeta wrote:

Panda wrote:When I was in America recently , my Friend said there is a movement gathering momentum to boycott goods made in China . I pointed out that shoppers
are quite happy to buy goods made in China and Korea because they are so cheap, but she says Americans have just woken up to the fact that their
unemployment figures reflect the harm it has caused and they are willing to buy U.S. made products now and pay the extra.

Well done to them Panda. I hope we can get the same thing going here. I remember once before many years ago we were all encouraged to buy British goods and people used to check everything they bought to make sure it was.

Whether our society now would do it? I have my doubts! It would be fantastic if we did.

Hi fuzeta, have you noticed there are very few Korean items for sale, it"s mostly China and as I said, they also profit from having production of U.S. goods,
surprisingly Apple. Nobod quieries the slave labour in China though and their ruthless treatment of dissidents.

THE CHINESE ARE BIG SPENDERS IN BRITAIN IN SHOPS LIKE BURBERRY.

[quote="Badboy"]THE CHINESE ARE BIG SPENDERS IN BRITAIN IN SHOPS LIKE BURBERRY.[/quote

That is the rich Chinese Badboy, probably less than 1% of the 600 million population . Europe and America are introducing an embargo
on Iran Oil but yet again the Chinese refuse because they need so much oil.]

It2s useful that Asda are creating 5000 thousand jobs.

I SAW SOME CHINESE GIRLS WALKING TOGETHER IN MY TOWN,WONDER IF THEY WERE TOURISTS.(MIGHT NOT HAVE BEEN)

Badboy wrote:I SAW SOME CHINESE GIRLS WALKING TOGETHER IN MY TOWN,WONDER IF THEY WERE TOURISTS.(MIGHT NOT HAVE BEEN)

There are Chinese where I live, but one thing, they never claim Benefits or housing. There are a couple of Restaurants and an
Acupuncturist, plus a shop which does Garment alterations but as a Community they keep very much to themselves

Badboy wrote:I SAW SOME CHINESE GIRLS WALKING TOGETHER IN MY TOWN,WONDER IF THEY WERE TOURISTS.(MIGHT NOT HAVE BEEN)

The well off of china always come to our cities at sale time in January Birmingham is packed with them. It makes me laugh that they do not want their own shoddy goods. Mind you thinking about it how much designer stuff is made in China and the likes these days??

I SAW A PROGRAMME SUGGESTING CHINA'S ECONOMY MIGHT COLLAPSE.

http://www.bbc.co.uk/news/business-26236593


China removes $8bn from money markets to control lendingYuan notes being counted China is looking to clamp down on excessive bank lending
Continue reading the main story
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China's central bank has removed nearly $8bn (£4.7bn) from the money markets in a bid to control the amount of credit in the country's financial system.

According to reports, the People's Bank of China (PBOC) did so by issuing 14-day forward bond repurchase agreements, also known as forward repos.

It is the first time since June the PBOC has used forward repos, and comes after China released unusually strong economic data earlier this year.

Chinese stocks fell in Shanghai.

A trader at a Chinese commercial bank in Shanghai told the Reuters news agency that the move "sent a strong signal to the markets that the central bank is not letting liquidity ease".

"If money market conditions remain sloppy, the central bank could even step up efforts to mop up excess," he said.

China has been looking to suck excess cash from its open-market operations to reduce the risks of shadow banking, or informal lending to businesses.

Shadow banking has been identified as a major risk to China's future growth, because of the possibility of large debts turning sour.

Volatile markets

Chinese banks traditionally see a spurt in lending at the beginning of the year, as businesses and consumers borrow money to fund spending in the new year.

In January, new local currency loans nearly tripled from the month before to $218bn.

By reducing the amount of money available, the government makes it harder for banks to borrow and move the money into risky investments.

However, in its attempt to rein in credit, China's money conditions have been volatile over the past six months.

China's seven-day bond repurchase rate - a measure of short-term liquidity - surged to double digit territory last year on concerns there was not enough money in the system.

This caused a sell-off in global markets last year, spurring China's central bank to make a series of short-term capital injections to soothe investors.

In a monetary policy report released in February, the PBOC said volatility in money-market rates is set to persist.

"When the valve of liquidity starts to tame and curb excessive credit expansion, money-market rates, or the cost of liquidity, will reflect that," it said.

"The market needs to tolerate reasonable rate changes so that rates can be effective in allocating resources and modifying the behaviour of market players."

==========================================================================

China is owed trillions by the U.S. and we think of it as a wealthy Country , but apparently it owes a lot of money as well and is developing Aircraft and speed Trains which obviously cost Billions .

Much of our foreign aid packages are suspect anyway, and it is absolutely without doubt that much winds up in private Swiss bank accounts. It beats me why we give foreign aid to India or Pakistan. Both those countries have nuclear weapons while ours is not actually ours at all. The resources needed to develop such weapons are absolutely staggering, yet neither country can look after or properly educate it's own people. They also have missile programmes, and are even indulging in space exploration. While we fund their education, and outsource business to them.

The really big one however is China. Virtually everything we buy nowadays is made in Chine and it is the same in the US, so why on earth are we giving China foreign aid? It is not a great deal in the scheme of things, the point being why do we give them anything at all? They are apparently at least part funding this new nuclear power station so why are we giving them money? It's unbelievable what idiocy our politicians are capable of.

I agree katertaif, Britain is a soft touch , has China contributed to the Syrian Crisis, has India, Pakistan? The worst thing the Brits did when they were Colonians in India, was to give British Citizenship to the Pakistan people. Not that the Pakistan people are scroungers , but they are taking over schools, Doctors Practices, shops etc.

A recent T>V> Documentary revealed that the immigrants helped to make Britain prosperous in the 70'/80's and there are not as many immigrants as we suspect.

The Government is incapable of any action, Cameron huffs and fuffs but is a very weak Leader, reactive, not proactive.

Exactly so Panda our leaders (alleged leaders I should say) of all parties have for the last 50 years or so became increasingly more greedy, while at the same time more divorced form the people who elect them. Once every 5 years, we are important, in that we are voting fodder. They will promise anything, and after the election whichever one is elected deliver little or nothing.

The foreign aid programme is more to allow them to strut the world stage rather than actually ding any good and as you say, China is not exactly famous for charitable works. I have nothing against the Chinese personally, but they may have money problems, but once again they have the resources for nuclear weapons, missile sites, a standing army the size of some countries, and a space programme. all costing staggering amounts of money, and which we ourselves cannot afford, so how is it we can afford to give them money in foreign aid, is completely beyond me.

As for the immigration question, that is a time bomb, just waiting to go off. France has roughly our population and two and a half times our land. We simply cannot go on taking them all in. Race and colour notwithstanding it's the sheer numbers. I did not say creed, that is another subject which is going to bedevil us in the not too distant future, another time bomb our politicians are unable to see coming.

katertaif wrote:Exactly so Panda our leaders (alleged leaders I should say) of all parties have for the last 50 years or so became increasingly more greedy, while at the same time more divorced form the people who elect them. Once every 5 years, we are important,  in that we are voting fodder. They will promise anything, and after the election whichever one is elected deliver little or nothing.

The foreign aid programme is more to allow them to strut the world stage rather than actually ding any good and as you say, China is not exactly famous for charitable works. I have nothing against the Chinese personally, but they may have money problems, but once again they have the resources for nuclear weapons, missile sites, a standing army the size of some  countries, and a space programme. all costing staggering amounts of money, and which we ourselves cannot afford, so how is it we can afford to give them money in foreign aid, is completely beyond me.

As for the immigration question, that is a time bomb, just waiting to go off. France has roughly our population and two and a half times our land. We simply cannot go on taking them all in. Race and colour notwithstanding it's the sheer numbers.  I did not say creed, that is another subject which is going to bedevil us in the not too distant future, another time bomb our politicians are unable to see coming.

Morning katertaif......only just noticed your post , I wasn't ignoring it.  

I was quite Political in my younger days when I lived in London , joined the CND, joined the march at Highgate, handed out leaflets etc...lot of good it did.!!! The days have gone for Electioneering, now it's a leaflet through your letterbox. asking you to put a cross against one of the contenders who you do not know , nor what they stand for...I don't vote any more. In fact, Britain has one of the worst voting records at General Elections, only 45%
bother to vote.