--
Ed Huntress
(remove "3" from email address for email reply)
"bg" wrote in message
om...
"Ed Huntress" wrote in message
.net...
"bg" wrote in message
om...
"Ed Huntress" wrote in message
.net...


It is not a matter of research to find the solution. The solution
is
evident. Change the paradigm or die. It is the law of nature. The
nature of the beast. The strong survive and the weak die off.
Adapt
and thee will survive. What they will adapt to, is what really
needs
to be researched.

"The solution is evident"? So, what's the solution?

Change or die. Its cold, but has always been true. The milkman, diaper
man, Knife sharpening truck, etc. If they didnt change the paradigm,
they starved.

Ah, the old free-trade mantra raises its little head. So, you're
comparing a
skilled moldmaker, who works with 3D CAD and 5-axis high-speed machining
centers, with a guy who sharpens knives on the back of a truck?

Only in the respect that they reinvented themselves. They were forced
to adapt. I have given you cases and examples in our postings of
companies that have been forced to do so and have done so successfuly.

You sound like Grant Aldonis, Assistant Sec. of Commerce. He thinks our
productivity is too low to compete. He apparently didn't read his own
department's figures, which show that we have the highest productivity
in
the world.

I dont believe that at all. I am the one saying that I have confidence
in our productivity. You seem to be the one throwing in the towel, not
even willing to attempt innovation.

As you sit there telling other people what they must do, bg, what is it
you
suggest? Should they all start becoming middlemen for China?

I am suggesting that we need innovation, nothing else. It is
conceptual,but some people will become middlemen, some laborers, some
engineers, and so on. I believe what we are seeing is a natural state
of economics.



Do they have geographic
advantages?

Over most countries, yes.

You don't understand the question. Geographic advantage relates to an
advantageous climate or low-cost trans-shipping. In terms of trade with
the
US, China has neither.

Ed, why all the huffnpuff? You did not specify you were looking for
climate or low cost shipping. You merely stated geography. And in the
general sense of the term, yes, they do have certain advantages. But
yes, they dont have anything special over us, geographically.


Resource advantages?
Over most countries, yes.

We aren't talking about "most countries." We're talking about the US.
Again,
no advantage overall.

Correct. But agin, you were not specific.


Innovation is lacking. That si the basis for my argument. It is
lacking.

And your argument is utter nonsense. The US is the most innovative
economy
in the world. So, your cure for an assault by low-wage mercantilism is
to do
something that you can't think of yourself, and that this country
already
does better than anyone else. That sounds like a self-serving excuse to
me,
bg, when it's coming from someone who's engaged in foreign trade
himself.
Your prescription seems to be, "go away, I have mine."

huffnpuffing.Why?

Innovation is not utter nonsense. Thousands of companies all over the
world are planning for it everyday. How many times has IBM reinvented
itself? Countless. Yes, we are the most innovative economy in the
world. It is our greatest advantage, and have said/alluded so in my
previous posts. That is why we should continue to put more effort in
this area. How do you relate this to be self serving? It is our
countries greatest economic asset!


The
real question now, for a country that wants its economy to grow, is
what
goals they should establish. Keep cutting wages? There's a winner
for
you...


Goals?
Provide sound govt economic planning - we dont
Provide ample economic infrastructure - we dont
Provide money and resources for research and dev. - we need more.

Ooh, more government planning and spending. They're going to take your
Junior Libertarian Free-Trade Decoder Ring away from you if you keep
talking
like that, bg. g

I am talking about simple things, like instead of that 2 lane road,
think big and make a 6 lane road. It is easy for countries like China
to do it, because they are starting from ground zero. But we have to
think along those lines. Improving roads, ports and other
infrastructure. They are the foundation of any working economy.

I admit, I dont always like the free trade deal. It seems that it is
never negotiated to perfection. But then I am not confident we will
ever see perfection in my lifetime.




I believe China knows exactly what they are doing.

It isn't a matter of belief. It's a matter of facts. And one key
fact is
that the Chinese are addicted to their state-run enterprises, which
are
their employment buffer that keeps a lid on unrest, even while they
run
their banking system into the tank. Their banks are insolvent. If
they
opened up their state banking system to competition, as they've
promised
the
WTO they will do, there would be a run on those banks tomorrow, and
they
would collapse within a week. All of their money is loaned out in
non-performing loans, which can never be paid back. They knew they
would
never be paid back when they loaned the money -- to state-run
enterprises,
exclusively. There's no way to call those loans in. The money is all
gone.

For both practical and ideological reasons, China's government is
unable
to
do anything about it. They can't get off of the merry-go-'round
they've
created. They're sweating it. So is the world banking community.

Chinas banks have been in garage sale mode for the past three years
selling off bad assets in a fire sale, even to foreigners. The loans
are being written off and they are working on getting the program on
track.

But you are mistaken to think there is no competition. Froeign bnaks
now work in local currency, give loans and sell financial instruments.
I suggest you get your facts straight.

You neglect to mention that this is only in a few select cities, and
most of
the foreign banks' RMB services are only allowed to Chinese businesses,
not
to the foreigners doing business in China. The phased "liberalization"
of
foreign banks in China won't be complete until 2007.

Thats true. And they would definitely fall on their faces if forced to
float their currency right now. Thats why they are fighting it. But
they are on the right track. I watched all the other Asian economies
wait until disaster struck. At least they are doing something about it
before hand, even though so much more needs to be done.

Meanwhile, our Fed. Reserve estimates that the non-performing loan (NPL)
percentage among major Chinese banks is around 60%. In a competitive
marketplace, banks are usually insolvent when their NPL goes above 20%.
Their capital-adequacy ratios (CARs) are still far below the
international
norm of 8%, while they're demanding far higher ratios, well ABOVE the
international norm, from foreign banks that want to do business in
China. At
the same time, they have limited the inter-bank loans from Chinese banks
to
foreign banks, which is one of their few sources of RMB, assuring that
their
growth will be limited, and that Chinese banks won't have to compete
with
them except at that margins, for quite a long time to come. They're
barely
sticking to the letter of their WTO agreements, but it's obvious they're
doing everything they can to hold back the tide.

But China's banks are not in a competitive marketplace. If they were, as
I
said, they'd have a run and go belly-up before week's end.



By the way, In regards to your numbers on the automotive guys
buying
from China, I am really surprised they are so late. VW, audi,
Peugeot,
Toyota, Honda and Nissan have all been benefitting greatly. I
dont
believe all have been exporting full vehicles, but many have.

Not. VW has by far the largest market share in China, at 40%. From
"The
Business Times," August 4, 2003: "China, the land of $50 VCRs and $3
haircuts, remains too uncompetitive a place to make cars for export.
And
it
could take up to five years before the country exports cars,
according
to a
top VW executive yesterday."

From Automotive News Europe, July 16, 2003: "Volkswagen, which has
complained frequently about the high cost of auto parts in China,
will
follow the example of Ford Motor Co. and General Motors and begin
sourcing
parts here for its global operations."

Opinion is a kind of low-level ailment, bg. The cure for it is
facts.
Unfortunately, they require some effort to research.

"A shipment of 252 Xiali economy cars manufactured in north China's
port city of Tianjin is on its way to the United States market.
Tianjin is the leading manufacturing center for economy cars in China.

The cars, produced by Tianjin Auto Group in cooperation with Toyota,
are the first batch of Chinese-made economy cars to be exported. They
are part of a deal signed in April between the manufacturer and
, which will be the sole
agent for Xiali economy cars on the international market.

According to the deal, the American company will be responsible for
selling at least 25,000 Xiali cars during the next five years"

Ah, bg, that ship set sail in June of 2002. Maybe your subscription to
the
People's Daily is running a little behind. g

American Automobile Network Holdings Inc. was the remnant of the
collapsed
Daewoo dealer network in the U.S. All hat, no cattle. No cars, either.

The cars were slated to land in Port Everglades, Fla., but the US
government
wouldn't allow them to pass through customs because they don't meet US
emissions standards. The ship was re-routed to Mexico, and then
apparently
it was decided they'd land in Port Everglades after all, for
trans-shipment
to Africa.

They haven't been heard from since. They may have tried to cross the
Bermuda
Triangle...

There could be a connection, though, with an incident in which the golf
carts at the Boca Raton Country Club were replaced in the dead of night
by a
fleet of funny little hardtops with radios and turn signals, and with
tear-off pads of Chinese takeout menus stuffed into the glove boxes.
Under
the vehicles' insignia, which no one recognizes, are the words "Happy,
Happy, Joy, Joy."

Golfers are generally pleased with the new vehicles, although they
complain
about the lack of air conditioning and a noxious odor coming from their
trunks. "It smells like somebody has been living in there for weeks,"
says
Boca Raton police chief Billy-Bob Turkle. "But it can't be, because
those
trunks are so small you could barely stuff a Chinaman in there."

The mysterious replacement of the golf carts, which turned up in a
hand-laundry parking lot near Clearwater, is under investigation. Police
report that the carts were missing their batteries and tires.


GM Shanghai is also exporting cars to the Phillipines (I have a
relative who recently left GM Asia to work for one of their major
parts suppliers - at least 5 factories in China now).

Yeah, a grand total of 900 luxury Buicks. But I was responding to this
statement of yours: "VW, audi, Peugeot, Toyota, Honda and Nissan have
all
been benefitting greatly. I dont believe all have been exporting full
vehicles, but many have." One assumes that the Shanghai VW executive
quoted
in that article knows where the cars that his company makes are going.

The total passenger car exports from China this year, which are all
trial
balloons, run to less than 2,000 vehicles, including SUVs, to other
parts of
Asia, Turkey, Iran, and Africa. The joke is that they're all being
bought by
Chinese foreign diplomats. That isn't trade. That's cultural exchange.
g

Ed, all of those mfrs are benefitting greatly. Some of them have plans
in the works, now building factories for export purposes. My initial
question was in regards to why they have waited so long to buy parts
from China. You reply with a quote from a VW exec,which was not
exactly correct.

You want to focus on the petty word "many"? Lets get on to solving the
worlds problems. What are you picking at this stuff for? I think we're
making progress. Its nice to discuss issues like this with someone who
has a good background. I learn from it. You dont have to get snappy...


I suggest that you take some medicine for that ailment Ed.You need
some more research to come up with facts.

Yeah, more research. Maybe you can send me your year-old "People's
Daily's"
so I can find out what happened last year. G

Any word on the Xiali ghost ship?

Hey, I just did a quick search. I didnt bother to think that I was
reading something out of Laurel And Hardys Ghost Ship short.

bg