[tapmap]

The only Chinese company that is managing its own future is DJI, the drone company. DJI designs, manufactures and sells its own drones for a global market. They even have their own store in downtown SF. Its a sign of the times when middlemen (US designers and marketers) are taken out of the equation. The same will happen with more Chinese made goods.

[otoburb]

As Western wages collapse further, wouldn't this then become the kick in the pants developed countries need to motivate the rebuilding and reseeding of their decrepit and aging industrial bases?

[slapshot]

> decrepit and aging industrial base

This is such a common canard that seems to lack any foundation. The United States manufacturers more "stuff" than at any point in history, for any reasonable definition of "stuff" (dollar value, inflation-adjusted dollar value, number of items, etc). Employment in manufacturing is way down, in large part because of automation -- for example, high-technology production lines replaced hand-welding with welding robots.

By contrast, developing markets tend to employ a lot of people doing manual tasks that would be automated in the United States (or Germany, Japan, etc.). A Foxconn assembly factory is far from high-tech; it's usually a long line of people in matching uniforms using tweezers to put parts together.

Sources, among many: http://www.marketwatch.com/story/us-manufacturing-dead-outpu...

[phil21]

I hate this counterpoint quite a bit. It's vastly different in terms of employment and who is able to be employed selling 1,000,000 widgets for $10 or 1 widget for $1 million dollars.

It's simply not interesting to me to know we've increased the total dollar amount of production - largely based around extremely large ticket items to the detriment of everything else. This is even without getting into the fact rent-seeking is much more profitable the larger the deals get. A single 737 sold for $50M is not equivalent to $50M spread around 10 small manufacturing suppliers building tens of thousands of devices. I would argue anyone saying otherwise is missing the forest through the trees.

It's in-your-face obvious if you actually try to manufacturer or design/build anything as a small company in the US. The velocity and simple ability to do so is an order of magnitude better in China - where design shops can literally run down the street to have a custom part made for deliver that afternoon. If you are directly competing with anyone from China in such a space - you simply are going to lose. The competitive advantages this gives cannot be overstated - and HN should really understand the network effect here.

Simply put I think manufacturing base is something you either build up, keep, and continue to think is important - or it's something you lose. As you lose that base, you also slowly bleed the design talent that went along with it, as it naturally migrates to where the manufacturing happens. I just don't find it interesting that the US can assemble components made in china into high-margin complex devices. It's simply a matter of time until other economies move up the value chain. And there aren't many places for the US to move even further up - we're already at the top and have completely lost our ability to compete any lower. I would posit this is an extremely dangerous place to be, and if it continues makes the US existing largely at the sufferance of others.

[idiot900]

> A single 737 sold for $50M is not equivalent to $50M spread around 10 small manufacturing suppliers building tens of thousands of devices.

Correct - it's many more than 10 suppliers: http://www.b737.org.uk/suppliers.htm

[Animats]

Foxconn is automating heavily. Terry Gou says "Managing one million animals gives me a headache".

It's striking to look at videos of textile plants in Bangladesh. The Toyota jet looms are cranking out cloth at a thousand rows a minute, with few people present. No more hand weaving in the successful shops.

[zanny]

Only if wages collapse enough to justify ramping up industry while also still having the competitive advantage of being where the money buying products is. If wages have fallen that much, it may not be the case that just the American elite can prop up many industries to justify reinvestment.

Also, practically, this is all long term thinking. Right now the US is still #2 globally in manufacturing, and we only got dwarfed by the immense growth of China. We are still significantly ahead of #3 Japan, who is ahead of #4 Germany, etc. All the way down to a few percentage points of global supply chain, which all these doomsday scenario third world nations are apparently competing in.

There absolutely has been a shift as the US outsourced demand for goods to China, but it hasn't precipitated elsewhere at nearly the same pace, because very few countries have what has effectively been China's governance for the past 30 years - since Mao, it has been mostly a corptocracy, ruled by an insiders club of the wealthy and elite. That alone isn't special without the general attitude the Chinese have that their culture promotes, that has enabled them to rapidly educate and modernize and create great industrial capacity effectively overnight.

It was a special case. And the US still has more absolute manufacturing right now than it did 30 years ago back in its "glory days". The difference is that market saturating volume can be produced from the labors of dozens rather than thousands of people. Many industries are relocating back to the US now, not because of slipping wages but because the technology to automate got cheap enough to justify the opportunity cost.

A lot of hyperbole surrounds accusations of a doomed US in the face of third world production capacity. Per-capita Chinese production capacity is still behind a lot of the nations this article grouped with the US, when really they are all still producing a lot of goods - they just aren't being made by many humans, much the same way food production in the US pushes historic highs despite employing fewer people as a percentage of population than any point in the countries history.

[VLM]

Where does the industrial demand come from with a population primarily operating under bare subsistence living conditions?