How can we compete with China?

Over time, the people will begin to resent the treatment they receive from the government and revolt. Until then, we can’t.

Easy. Just let companies pay their workers 25cents an hour and legalise making them work round the clock, 7 days a week.

We are no longer a blue color country. We need to be innovative. Long gone is the days where the american worker will thrive off of manual labor. Granted, there are exceptions.

I heard on the radio this morning that manufacturing is only around 29% of our economy. Interestingly, they are hiring and they can’t find the workers they need. The reason for this is that our workers aren’t educated enough. You need at least two years after high school, if not more, in order to get a manufacturing job. So the first thing we can do is educate our people.

Second, if we lose more manufacturing, we will eventually get down to a point where we can’t go any lower. There is some manufacturing that cannot be off-shored.

However it looks as if we are competing successfully with smart manufacturing. Even though a lot of people aren’t educated enough, it is with those who are educated that we compete, and that is the case for other economic sectors besides manufacturing.

In fact, right now, we lead the world with the brain industries. We don’t need to make stuff. We invent stuff. We research. We write. We make movies, and on and on. Stuff China can’t do.

Third, we need to believe in ourselves. Is this America or isn’t it? Do we have the entrepreneurial and competitive spirit or don’t we? I believe we can compete just fine if we use our brains. Using brawn is the old way of doing thing and it is going the way of the dinosaur. We can compete if we work smart.

We should welcome China as a competitor and get on with competing. Whining is just un-American. It makes me sick when I hear Americans complaining about competition from elsewhere—fair or unfair. Just shut up and get to work! We can do it better than anyone and I don’t care if we are wearing shackles on every limb!

We need a complete overall of the “Most favored Nation status”, get renegotiate all “free trade” agreements and insist that all such agreements are made on a level playing field with tariffs predicated on the idea of equal labor costs and that other nations in these agreements follow and maintain comparable environmental and labor standards. If they can, then there is no agreement. What is the use of trade agreements that cost us jobs and money? If the agreement does not benefit both parties, I see no reason to have them.

Well the employment sector has been changing more from low skill manufacturing jobs to higher skill manufacturing jobs, along with the fact the service sector has become larger as well. I do recommend getting at least a secondary vocational or technical education of some sort even if is a 1 year diploma/certification program.

In the end though it comes down to scratching each other’s backs in reference to both employers and employees if we want to compete with aristocratic China. It is a two way street here. When employers pay people more money, or at least a fair wage for their skill level people tend to spend more. When people spend more employers profit. Though this may be difficult these days I say to try to buy American made products when you can, even if they cost a little more. American consumers are a major part of the blame too. I blame credit/banks as well for alot of these problems too, afterall people today are so wrapped in debt trying to pay back massive interest rates on credit cards, loans, etc that these people will purchase the cheapest products out there just to survive.

When people are spending any excess money they have on paying loans, interest and bills they are less likely to spend that money on consumer products that would help the economy. This is really a multifaucet problem where both consumers who live above their means along with consumers wanting the cheapest products have contributed to this problem as much as corporations themselves. I also blame banks and credit card companies for helping to keep people in debt which doesn’t help the cause too much either.

Knock off everything they make and sell them for cheap! :)

@wundayatta I have to disagree that our workforce is under educated. If anything, most people are wrongly educated for the manufacturing jobs available. School counselors have to stop pushing everyone into colleges when the jobs available are trades and technical.

A business degree is not any good to the employer that needs welders or electricians. There are several one and two year trade schools available that teach these skills, and there is usually space available.

The price of labor is only one piece of the puzzle. You need to add in the cost of regulation and taxes. We can’t compete on the cost of labor but there’s no reason to compound our disadvantage. According to one study done in California, the cost of regulation alone doubles the cost of the product. Taxes are no less ominous. Corporate taxes, inventory taxes, property taxes, etc.

China can’t compete with us on quality or efficiency and those have value. But when you add in the tremendous cost of regulation and taxes, we just lose too much ground. It’s a pity so many focus on the labor market and give up because there’s nothing that can be done. There’s plenty that can be done, it’s not just a labor problem.

At a previous company I sold products in China. We were only permitted to sell the US made product for 1 year and then were required to have a “localization plan” describing how the product would be made there. We ended up starting numerous joint ventures so we could satisfy the “localization ” requirement. In every case the design, tooling, raw materials and even finished product was ripped off and sold in other outlets bypassing the agreements. Counterfeits were soon available everywhere – some of them made on the very same tooling with identical cavity model identifiers. All state sponsored and supported by the government.

We need to do the same. If they want to sell that TV in the US, they must have and implement a localization plan or pay a huge penalty.

1. Carefully define property rights. This in turn will end any negative externalities. No negative externalities means no more regulations required. Any infringement would be easily handled by the tax operated court systems. Likewise for any breached contracts.

2 . End all government spending accept for courts, military, police. This cut along with the removal of regulations will allow the ability to lower taxes for both Corporations and individuals to extremely low percentages. Everyone should be subject to the same tax despite their status. Equality under the law. All this in turn would promote very high competitiveness and the ability to lower products and services to very low prices which in turn promotes consumers to spend more and employers to hire and increase salaries.

3. End the Federal Reserve. This solves all inflationary issues. This in turn removes the governments control on Banks which would reverse the negative effects the government imposed such as deducing competition which lowers the level of available services.

4. Remove all government involvement in price control. Let the market decide. Supply and demand.

5. Tariff Rate should be 0% and all tariff barriers removed.

Easily. China is just a place with people. For all of the hype, China is not where I would want to live for a good reason. Their system is flawed. Americans and all of the West need to be the best they can be, just plough down, create, innovate, work, and let the juices flow. Forget negativity, embrace creativity and opportunity. Elect or create a new political party or idea system that gets those engines motoring. In time, it will be China competing with America again. Their system of oppression will only go so far. If it takes 15 years, so what.

@WestRiverrat Wow, the main focus of a recent blog I created. Read my response to others as well on it. I agree with you vividly on this but many say offering vocational courses dumbs down American students. I find that notion pathetic. Imagine a country with all doctors, lawyers, businessman, etc but no electricians, mechanics, maintenance personel, construction workers, etc. Yeah that would work out well wouldn’t it?

Trying to push students into 4, 6 or 8 year degrees will not help us compete with China nor the rest of the world since the problem is more complex than the lack of education but I do believe that most everybody should have at least some type of post secondary education like I said above, even it is for only a 1 or 2 year vocational course.

As fossil fuel prices begin to get crazy (because the supplies are only going to start decreasing at a faster and faster pace), the cost to ship raw materials to China to have people making slave-wages manufacture it into something and then ship it back will become cost-prohivitive. Cheap labor is a dead-end. As the Chinese economy keeps picking up steam, so will it’s currency, and all of a sudden it will be cheaper to have our stuff manufactured in Brazil, or Mexico, or wherever.

I’ll worry about China when they take down their Great Firewall of China and have a population that’s capable of free thinking. You can’t innovate when you’re under constant assault from the thought-police. There will always be a labor-force that’s willing to work longer/harder/cheaper out there. In 20-or-so years we’ll probably have robots doing a lot of the assembly-line type of work, which will be a lot cheaper than shipping things back and forth across the Pacific.

If you think regulation and taxes have anything to do with China having a manufacturing edge on the US… you’re a fool.

You could drop the US tax rate to 0 right now, and allow any factory to pollute any natural habitat you wanted… it wouldn’t change the fact that they can already pollute in China, and they can pay their workers pennies a day to do a job that would cost minimum wage at least here in the US.

One thing I think everyone needs to realize though, is that China will never ever pass the United States with it’s current economic model. The US became the worlds number one economy by nurturing our middle class (the highest spending group). China cannot do this and maintain their manufacturing edge. They’re no longer that desirable if suddenly a company has to pay the workers a respectable wage… and that’s the only way they’ll pass the US.

I have noticed, since I was in high school, that every time the U.S. negotiates a trade agreement, with any country, we get the shitty end of the stick. The Soviets used to take us to the cleaners on a regular basis, China is even better at it. Hell, I got in the middle of a trade agreement with Canada and small business and independent contractors get screwed royally dealing with Canada.

The State Department has never been a friend of small business and think nothing about giving our jobs away. The greatest impediment to fair trade has always been that department and you can’t blame the Chinese for taking advantage.

Focus on innovation, not cheap manufacturing.