On Tuesday, December 30, 2014 7:38:58 AM UTC-5, John B. Slocomb wrote:
On Tue, 30 Dec 2014 00:56:51 -0500, Ed Huntress
wrote:

On Tue, 30 Dec 2014 10:31:50 +0700, John B. Slocomb
wrote:

On Mon, 29 Dec 2014 12:20:38 -0500, Ed Huntress
wrote:

On Mon, 29 Dec 2014 07:11:44 -0800, Larry Jaques
wrote:

On Mon, 29 Dec 2014 02:04:18 -0800, mike wrote:

On 12/28/2014 5:29 PM, John B. Slocomb wrote:
On Sun, 28 Dec 2014 15:08:49 -0800, mike wrote:

On 12/28/2014 1:18 PM, Larry Jaques wrote:
On Sat, 27 Dec 2014 22:26:29 -0800, mike wrote:

On 12/27/2014 9:44 PM, Ed Huntress wrote:
On Sat, 27 Dec 2014 02:08:54 -0800, "Howard Beal"
wrote:


"Ed Huntress" wrote in message
...
Much snipped



I think you guys are 'way too pessimistic about the American economy,
and 'way too optimistic about the Chinese.

This is a long story, but the Chinese have been too slow to adopt
international standards of quality -- sewing a straight line on a
Louis Vuitton handbag is not a measure of manufacturing quality. And
now they're facing much higher transportation costs and a steep rise
in wages, with the Lewis Turning Point looming ahead. Like the
Japanese before them, they're losing their edge on cost, but without
the Japanese reputation for quality.

I talked with a Chinese representative of their tool-and-die industry
in Atlanta last month. I asked them if they could make decent D2 steel
yet. "Just barely," he said. Which puts them at a competitive parity
with the West...in about 1950.

The long-term goal for China is to be globally competitive at
competitive, not cut-rate, prices. They're hoping to accomplish
market-share inroads before their costs rise too much. So far, they're
not doing very well at that, in automobiles, industrial equipment, and
so on. There are factories in China turning out good products but
they're almost always run by Western companies, who are putting up
with horrible productivity in order to gain the labor-cost savings.
That will go away. Now their goal is to ride it out as the Chinese
domestic consumer market expands. Their economy *must* become more
consumption-based, or they're going to lose much of their export
market as their costs increase.

Meantime, US manufacturing has settled into a low but sustainable
percentage of our GDP. It's projected to grow in dollars, and slightly
in percentage of GDP, in coming years. The rest of our economy is
perking along mostly on services, and the labor-multiplier effect of
manufacturing is sufficient to sustain pretty good growth.

Our economy is doing well. It's employment that's at risk, largely
because of steady improvents in our productivity -- read "automation."
This will become a bigger social problem and we will have to address
it. But the solution will be much happier than you guys are imagining.
There is nothing in the economic dynamics that suggest we're going to
become a third-world country.

Do you remember Japan after WW II?

I wasn't born until 1948. But I remember when Japanese products were
junk.


The Japanese did exactly what the Chinese are doing now, albeit on a
smaller scale, they leaped into foreign trade with what they could
manufacture and the words "Made in Japan" was a synonym for "Junk!".
Now look at them. The first Nikon FP camera was made in 1948 and by
the Korean war Nikon and Canon had become the preferred camera of most
news correspondents and Leica and Contax were headed down the slippery
slope.

In about four years. After 1950, and Deming, Japanese industry focused
on quality and it paid off in just a few years:

"Deming is best known for his work in Japan after WWII, particularly
his work with the leaders of Japanese industry. That work began in
August 1950 at the Hakone Convention Center in Tokyo when Deming
delivered a seminal speech on what he called Statistical Product
Quality Administration. Many in Japan credit Deming as the inspiration
for what has become known as the Japanese post-war economic miracle of
1950 to 1960, when Japan rose from the ashes of war to become the
second most powerful economy in the world in less than a decade,
founded on the ideas Deming taught:"


True. The Japanese have a long history, right back the "Black ships"
and before, of acquiring foreign technology.

Right. They've had democracy since 1925 and that made foreign investment/trade from the west easier. That results in economic maturity output sooner.

Japan became interntaionally recognized for quality in just over a
decade. China is still known for junk, after three decades or so.

But a lot of junk. Far more then Japan ever produced.

Taiwan (known as the Republic of China - as opposed to the mainland's People's Republic of China) has had democracy around 1949 and since then. So Taiwan's economy is further along quality-wise than mainland China.

In a democracy, foreign investment is more comfortable for both sides (as opposed to mainland China where there is more restriction).

Restriction strangles foreign investment and trade and that results in less overall quality.