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Elie
Where do you think many of the "Made in Japan" products are actually made? Guess what? China, of course. Japan is far too expensive a country for high-labour-intensive goods to be made. OK, they may add a few screws or something in Japan to justify the label, but many of the components, including the printed circuitry, are Made in China.
This is not to denigrate China. I have visited quite a number of factories in China, for my UN work, and many of them are as good as factories I've visited in Japan, Europe and the USA. The difference is that a young female factory-floor operator with very nimble fingers may be recompensed with $50 a month for her qualities, where a decent restaurant meal in Tokyo could cost you more than that. I've never visited Korea, but I imagine that South Korea will rapidly grow out of its present position of "Tiger", within five years. If relations between N. and S. Korea improve, as the new administration hopes, LG, Samsung et al. will surely start up branches there, where salaries are still very small. After that has been exploited to the full, then it will be Outer Mongolia or some other impoverished State, probably ending up the chain in darkest Africa, as all the other emerging economies become too expensive. By this time, the economies of the present-day so-called developed countries will have collapsed totally, because they are no longer manufacturing anything or are totally dependent on other countries for components and the cycle will restart. No country can live uniquely on service industries for more than two or three generations because the value lies in education and without a symbosis between academia and manufacturing industry, the quality of education will suffer. We are beginning to see that already in some of the developed countries. Just think of where the best computer programmers come from. You certainly don't find them in Redmond WA, do you? That is not a keen, lean and mean organisation, such as you would find in Bangalore or Hyderabad, but a fat and sick one, which is poised for a downturn within the next decade or so. Why? Because the principal wealth of the employees are in stock options. When the share price goes down, there is a limit to the incentive to push it back up again, before discouragement sets in. In fact, I believe that the offering of stock options of more than about 5% of the employees' wealth is a sting which can really backfire, causing great discontent. This has already been made evident as part of the Enron scandal, although, please note, I am not accusing Microsoft of corrupt business practices with respect to their employees or their accounting procedures.
So, be prepared for a constant shifting of both manufacturing sites and economies. The wise are hedgng their bets by investing in emerging economies, keeping their stakes in the developing nations and divesting from the developed countries, whose stock exchange indices are all dropping by an average of 15 to 25% per year, as the analysts are cottoning on to the problem. There may be a small rally in 2003 or 2004 but I do believe that Japan, Europe and North America are becoming a set of under-developing nations, compared with the progress of the developing ones. In other words, the world's wealth is shifting ownership. Samsung camcorders is probably a very small example of this.
Where do you think many of the "Made in Japan" products are actually made? Guess what? China, of course. Japan is far too expensive a country for high-labour-intensive goods to be made. OK, they may add a few screws or something in Japan to justify the label, but many of the components, including the printed circuitry, are Made in China.
This is not to denigrate China. I have visited quite a number of factories in China, for my UN work, and many of them are as good as factories I've visited in Japan, Europe and the USA. The difference is that a young female factory-floor operator with very nimble fingers may be recompensed with $50 a month for her qualities, where a decent restaurant meal in Tokyo could cost you more than that. I've never visited Korea, but I imagine that South Korea will rapidly grow out of its present position of "Tiger", within five years. If relations between N. and S. Korea improve, as the new administration hopes, LG, Samsung et al. will surely start up branches there, where salaries are still very small. After that has been exploited to the full, then it will be Outer Mongolia or some other impoverished State, probably ending up the chain in darkest Africa, as all the other emerging economies become too expensive. By this time, the economies of the present-day so-called developed countries will have collapsed totally, because they are no longer manufacturing anything or are totally dependent on other countries for components and the cycle will restart. No country can live uniquely on service industries for more than two or three generations because the value lies in education and without a symbosis between academia and manufacturing industry, the quality of education will suffer. We are beginning to see that already in some of the developed countries. Just think of where the best computer programmers come from. You certainly don't find them in Redmond WA, do you? That is not a keen, lean and mean organisation, such as you would find in Bangalore or Hyderabad, but a fat and sick one, which is poised for a downturn within the next decade or so. Why? Because the principal wealth of the employees are in stock options. When the share price goes down, there is a limit to the incentive to push it back up again, before discouragement sets in. In fact, I believe that the offering of stock options of more than about 5% of the employees' wealth is a sting which can really backfire, causing great discontent. This has already been made evident as part of the Enron scandal, although, please note, I am not accusing Microsoft of corrupt business practices with respect to their employees or their accounting procedures.
So, be prepared for a constant shifting of both manufacturing sites and economies. The wise are hedgng their bets by investing in emerging economies, keeping their stakes in the developing nations and divesting from the developed countries, whose stock exchange indices are all dropping by an average of 15 to 25% per year, as the analysts are cottoning on to the problem. There may be a small rally in 2003 or 2004 but I do believe that Japan, Europe and North America are becoming a set of under-developing nations, compared with the progress of the developing ones. In other words, the world's wealth is shifting ownership. Samsung camcorders is probably a very small example of this.
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