"R. Anton Rave" wrote in message
om...
"Ed Huntress" wrote in message
v.net...

With a good Chinese worker making $0.80/hr., and with productivity
in their better export-oriented plants and shops running perhaps
2/3 of ours, there was no other possible outcome

There is no way the best factories in China are 2/3 as productive as
even the average U.S. factories, and what I've seen tells me that
they're at best only 1/3 as productive.

I've interviewed a number of US manufacturing executives upon their return
from China, and they tend to be shaken up by what they've seen. One that I
quoted in my first article on the subject had just visited a mold shop in
China that he said was running at virtually the same productivity level as
his shop in the US...and he runs one of the best mold shops in the US. He
had visited three others that he said were slightly below his productivity
levels, but not by an awful lot.

It's a mixed bag. Most of China's manufacturing runs at very low
efficiencies. But the export manufacturers -- particularly those that have a
US or European partner that supplies the technology and the training -- are
quite close, in terms of productivity, to that of the best Western shops and
plants.


This may be why Honda has
estimated that its Chinese parts factories will be only 30% cheaper
than those in Japan and North America, despite wage disparities being
much, much greater (rule of thumb: Chinese labor costs are
essentially zero).

It costs Honda nearly $2,000 more to build an Accord in China as to build it
in Japan. The reason is that many of the parts in an Accord have to be
imported from Japan. And the prices for those parts are exorbitant, because
that's how Honda gets profits out of China: they overcharge the Chinese
division for parts costs, and take the extra margin out as corporate
profits. Many foreign manufacturers in China do the same thing.


The prime reason for job losses in the manufacturing sector is
productivity improving faster than sales, just as has been the case
with farming for almost a century.

When you actually run the numbers, you'll see that it's partly productivity
and partly excessive imports. The figures for job losses due to imports
range from 500,000 to 1,200,000, going from the conservative economists to
the more liberal ones. Mainstream economists are now saying it's something
under 800,000.

Ed Huntress