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Businesses The Almighty Buck

China Aims To Move Up the Food Chain 257

Posted by kdawson
from the empty-the-cage-and-remove-the-bird dept.
krou notes reporting in the Christian Science Monitor that the current economic crisis is helping China's push into higher-end manufacturing by shaking out low-profit companies. The hope is that, instead of just assembling iPods, Chinese companies will be able to invent the next big thing instead. In this move China is following the well-worn path taken by Japan and the Asian tigers before it. "Last month, the National Development and Reform Commission announced revised plans to transform Guangdong and neighboring Hong Kong and Macau into a 'significant innovation center' by 2020. One hundred R&D labs will be set up over the next three years. By 2012, per-capita output in the region should jump 50 percent from 2007, to 80,000 yuan ($11,700). And by 2020, the study predicts, 30 percent of all industrial output should come from high-tech manufacturing."
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China Aims To Move Up the Food Chain

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  • great (Score:3, Funny)

    by tritonman (998572) on Tuesday February 10, 2009 @04:20PM (#26802801)
    this makes me happy that I'm learning mandarin. å好ä
    • Re:great (Score:5, Funny)

      by mikael (484) on Tuesday February 10, 2009 @04:32PM (#26803005)

      From the font I am using, it looks you are learning Swedish shorthand...

    • ...then just accidentally delete IBM from the map.

      There is no way one can protect IBM US-based jobs (the inneficient ones) without losing competitivity on the long run to folks like these that work for peanuts. It's just something called capitalism [wikipedia.org], and nothing politicians can do to stop it.

    • In about two million emails, the font was never readable.

    • by cyberon22 (456844)

      Stick with it. The fact that you've already started puts you seriously ahead of the game.

      At risk of sounding spammish, I'm running a company from Beijing that specializes in online Chinese learning at http://popupchinese.com [popupchinese.com]. We are pretty exposed to conditions in the local market and are still seeing a lot of growth in small and mid-sized businesses in northern China. These are the smart innovative companies. In contrast, it's the export-oriented manufacturing sector down south that are having a really har

    • by geekoid (135745)

      Don't waste your time.

      Hell, there are so many dialect that chines from different Providences can not communicate to each other using 'mandarin'. Care to guess what language they use? yep English.

      English is the easiest language to communicate it.
      You can share ideas, exchange information with an high degree of accuracy and you don't have to conform t all the rules to do so.

      It's a bitch if you are trying to implement all the rules and be grammatically perfect. I argue that it's not possible to be grammatically

      • by LilGuy (150110)

        Then how do you explain the terrible english speaking skills of all my math teachers and co-workers in university? If they all communicate with each other in English, you would think they'd have at least a decent grasp of the language before they made it to the US... no?

        • by MrCrassic (994046)
          Mod this up.

          Just today, I had my Data Structures teacher, who speaks passable English, replaced with some random guy that could not, for the life of him, hack out an English sentence clearly or coherently. First time I had to leave a core class like that early; I had other important things to try and take care of.

          One thing is for certain; most of them have GREAT writing skills.
      • I argue that it's not possible to be grammatically perfect

        You don't say.

    • by Mikkeles (698461)

      Moving up the food chain; hmmm, what's next above melamine? polyvinyl chloride?

  • by wardk (3037) on Tuesday February 10, 2009 @04:27PM (#26802935) Journal

    I look forward to the new and inventive ways to hide toxins in consumer products.

  • MP4 Players (Score:5, Informative)

    by 0100010001010011 (652467) on Tuesday February 10, 2009 @04:31PM (#26803001)

    I'm quite happy with my unbranded Chinesium MP4 player that I bought from Chinavasion. [chinavasion.com]. All I wanted was something that would let me watch TV shows or movies at the gym. I looked at the iPod Touch and Nokia N800 products but they were all over kill (and over priced). This fits the bill perfectly. The software is XP only and just a gui wrapper to mencoder, but the ini let me write a nice shell script to do it [exstatic.org] on Linux/OS X.

    There are quite a few products on that website that seem pretty cool. I'm thinking of getting the toothbrush cam to see if it will make a cheap bore scope for engines, etc. This hard drive enclosure [chinavasion.com] seems pretty cool (Although I'm sticking with my XBMC).

    The BEST part about all of these products is that they can't afford a proprietary connector nor can they afford to lose market share to not being able to connect to everything. Everything is Mini-USB or USB.

    The biggest problem they have right now is UI and translations. The "MP5 Player Manuals" is quite entertaining to read and full of Engrish. [engrish.com]

    • Re:MP4 Players (Score:4, Informative)

      by rickb928 (945187) on Tuesday February 10, 2009 @05:10PM (#26803747) Homepage Journal

      This is the same Chinese outfit that makes such great knockoffs of other stuff, like this copy [chinavasion.com] of a Samsung WEP-200 [samsung.com].

      When the WEP-200 first came out, I ended up needing a new headset, and it looked cool to me. Imagine my surprise when I couldn't even buy one for two weeks. All the mall carts had were the copies. And they weren't that good.

      China has a ways to go. Creative I wouldn't call them. Opportunistic. Which also works.

    • Re: (Score:3, Interesting)

      Ebay will likely be the leader at the forefront of this revolution. I, for one, can't wait.

      As much as I don't like ebay, you have to admit they match the little guy from China DIRECTLY with the buyer (you and me). I just bought 12 screen protectors for my PDA for $3 free shipping. I bought a replacement 1200mAh same--physical-size-battery-as-the-Dell-900mAh battery for $8 free shipping. 33% extra battery capacity! I could have gotten the 2200mAh version for $10 free shipping but I didn't want it sticking ou

    • by quanticle (843097)

      You sir, have made my day! I've been looking for a new MP3 player, but all the MP3 players I've looked for from "known" brands (Creative, iRiver, etc.) have all been, as you've stated, "overpowered". Thanks for pointing out this site to me, since the players here are far more within my price range.

  • by slygrayling (1437943) on Tuesday February 10, 2009 @04:33PM (#26803029)
    Wah, i am gonna miss the cheap copies of electronics. Damn it. :-D
  • Hong Kong (Score:3, Insightful)

    by janwedekind (778872) on Tuesday February 10, 2009 @04:33PM (#26803043) Homepage
    Well, I don't know about the situation regarding health care and education. But Hong Kong certainly *looks* very advanced already.
  • Would that be a melamine laced food chain?

  • It doesn't surprise me that the PRC government wants to encourage adding value to it's economy, by moving up beyond manufacturing to design. Hell, it was going to happen even without becoming public policy.

    US economists, particularly those on a grant to say so, have gone on about the constructive destruction of the US economy. I can't count the times I've heard the analogy about Ford and the buggy whip. But, it's a bad analogy. Does it work when Henry isn't American, or doesn't make his investment in the US?

    Constructive destruction is an attempt to describe a kind of economic activity, the redirection of capital and investment. But, it's not graven in stone that it's a benefit for any particular economic player, even if that player is the USofA.

    But, just as those US economists made excuses for the hollowing out of US manufacturing (we'll move into design, we'll go upmarket), they'll think up new excuses now, and they'll probably pass muster at editorial boards and newsrooms as gospel.

    In the meantime, the goals the Beijing government has set have INFLATION spray painted all over them, in dayglow.

    • by mobby_6kl (668092)

      Why would the US economists (whoever those are supposed to be) need to come up with an excuse for helping bring millions of dirt-poor peasants into the modern era with some fure prospects? Or are you trying to turn this into a flamewar related to the current crisis?

      The growth figure might be shown in real terms. I have no idea having not actually RTFA, though it won't surprise me if it isn't.

      • by Kelbear (870538) on Tuesday February 10, 2009 @05:47PM (#26804351)

        One of the issues in shifting gears to these new high tech capital intensive industries is the shift away from low-capital, labor intensive industries.

        In developed countries this is counterbalanced by the suddenly unemployed workers going back to school or entering a new job that should overall pay better and produce more overall as the unemployed fall into appropriate jobs(effient allocation). Capital intensive jobs need education on how to utilize that capital(machinery, computers, development software, etc.).

        However, in a country as huge and diverse as China you have sections of highly developed and wealthy people, and sections of abject poverty.

        A good example is the Three Gorges Dam which displaced millions of people when they flooded the river valley and towns and villages that lived off it(Remember how Bush got slammed for how he handled Hurricane Katrina? This flood was actually man-made and much bigger!). The rationale of this huge dam was that the electricity would help catapult modern china into competition with the other first-world countries, i.e a propaganda move. Essentially, poor Chinese were pushed aside to help develop the modern areas.

        In the USA, if you get kicked out of your job, you try to get another one. You've probably got a highschool diploma or GED. You can read a training manual, or maybe even take out a loan to go back to school and accumulate some knowledge capital so that you can sell yourself and your education to get a better job than the one you lost. If you're a poor fisherman who can barely read, when you lose the river your family has lived off of for generations...you're pretty screwed. You don't have the education infrastructure to enable you to fall into another line of work as easily.

        It may be prudent for China to invest more heavily in its infrastructure before trying to chase after other countries which are much more thoroughly developed.

      • by cmholm (69081)

        Why would the US economists (whoever those are supposed to be) need to come up with an excuse for helping bring millions of dirt-poor peasants into the modern era with some fure prospects?

        "Whoever": Gregory Mankiw, Tim Kane, Douglas J. Young, Brink Lindsey, just about anyone at Heritage, Cato, the Club for Growth. I can go on, but that'll get you started.

        "Why": Around about the time when everyone notices that US firms, whether US or foreign based, have cleared out their engineering and design staff. Around

  • by olddotter (638430) on Tuesday February 10, 2009 @04:40PM (#26803183) Homepage
    None of the Asian tigers has replaced the US as a center of innovation. That is a game the US will lose if the government keeps favoring establish Fortune 500 companies over small nimble truly innovative start ups.
    • by girlintraining (1395911) on Tuesday February 10, 2009 @04:50PM (#26803375)

      None of the Asian tigers has replaced the US as a center of innovation.

      They don't have to. Our own intellectual property laws have strangled innovation in this country.

      • by electrosoccertux (874415) on Tuesday February 10, 2009 @05:33PM (#26804119)

        None of the Asian tigers has replaced the US as a center of innovation.

        They don't have to. Our own intellectual property laws have strangled innovation in this country.

        At least we have some. In China, forget about R&D unless you're willing to pay the police to go raid the counterfeiters for you. In Hong Kong, Shenzhen, etc. you can buy real North Face and -insert-favorite-brand-here- clothing. The manufacturers are told to produce a certain number of goods, but it's _so cheap_ to make stuff over there they still produce more of it, and sell it to street vendors, who then sell it to you for 90% less what you'd pay over here, and the street guys STILL make a profit on it.

        North Face, for example, pays this fee to keep the street vendors at bay. Friend was telling me about his trip there a few months ago-- "Do you have any NorthFace" "No, no no, no NorthFace. Here look at these instead, see this nice backpack? $5." "No but we want NorthFace" "No NorthFace, I don't have it" "Surely you've got something NorthFace." The guy looks at my friend, decides he's legit and not an undercover cop, looks left and right up and down the street, and the proceeds to climb up his shelves into a compartment above his shop and begins throwing down North Face sweatshirts, fleeces, backpacks, etc.

        They won't be able to move up the food chain until they get _some form_ of copyright/trademark/IP protection. There is no "code of law" there, anything they can replicate is fair game. Better make sure anything you produce can't be replicated or they'll undercut you fast.

        • by girlintraining (1395911) on Tuesday February 10, 2009 @06:02PM (#26804607)

          In China, forget about R&D unless you're willing to pay the police to go raid the counterfeiters for you.

          As opposed to here in the United States, where taxpayers pay for the police to raid grandma who downloaded a "ZZ Top" song. I'm not seeing the Western Civilization Advantage Program(tm) working here.

          They won't be able to move up the food chain until they get _some form_ of copyright/trademark/IP protection. There is no "code of law" there, anything they can replicate is fair game. Better make sure anything you produce can't be replicated or they'll undercut you fast.

          That sounds like capitalism to me, and they seem to be raking in quite a bit of money for being at the "bottom" of the food chain. As to "some form of IP"; I disagree. They seem to be proving that the entire model of intellectual property is a fraud.

  • by bornwaysouth (1138751) on Tuesday February 10, 2009 @04:44PM (#26803261) Homepage
    They have been working at this for decades. My brother travels often to China where he oversees production designed here. He admires their industry (human and machine), relative honesty (not that different from Western companies), and ambition. A company with 100,000 employees has 100,000 people all wanting to own it. The government not only supports business, they have schemes to induce overseas Chinese to return to lucrative positions. And they are not too sympathetic to freeloaders.

    In short, he likes them, and considers them a major looming threat. Every design he brings in he knows will be analyzed to enable them to better it. Hey, ho, that's evolution. Competitions wonderful if you can beat it often enough to live. If not, introduce protectionism and live off your capital for a while.

    They are not tigers of course. Those are a protected species. Not T. rex cos that's just a bunch of bones. I cannot think of a suitable analogy. An unassuming animal that out-competes us while we are watch video games.
    • by geekoid (135745)

      It's not competition when you steal someone else's product, slap your name on it and sell it cheap because you have no RnD costs.

      It also not competition when you make a knock off, try to make it look that same and then mislead people.

    • The value chain is something that has been building for a long time. For example, Toshiba first made just the ceramic compound for embedding chips which they sold to chip makers, then they started building chips for American companies, then they started building their own chips, then products and boardsets for other brands, then their own branded products.

      As more and more the actual design is moving out of USA and all that is left is branding and putting a US friendly face on the product through the brandi

  • is the general lack of "IP" in China. There is little motivation to innovate. Other than the prospect of immediate profits (with nearly immediate copycats coming to market and grabbing share), there just isn't as much call in China to spend R&D money.
  • by HungWeiLo (250320) on Tuesday February 10, 2009 @05:08PM (#26803693)

    My wife is a fashion designer, and it's quite obvious that the trends in manufacturing have been shifting for quite a number of years now. Clothes at Walmart (socks, underwear, t-shirts, etc.) used to be made in China. Now these low-value items are being made in Vietnam, India, Bangladesh, etc. At that time, the mid-to-high-end fashions were made in Korea, Taiwan, or Hong Kong. Now China has largely overtaken this mid-to-high-end market (dresses that go for up to $1,000 are frequently from China now).

    Clothes today. Cars and planes in 25 years. Or is that Toyota still funny Japanese engineering that falls apart?

    Also - with our recent peanut/salmonella/spinach/drugs health scares, it's not like we can point fingers at others anymore for having shabby food quality standards. I know we're still lightyears ahead of many countries, but the gap is certainly closing quite quickly.

    • Cars and planes in 25 years.

      Perhaps sooner.

      http://news.bbc.co.uk/2/hi/business/7879372.stm [bbc.co.uk]

       

    • by serbanp (139486)

      with our recent peanut/salmonella/spinach/drugs health scares, [snip] we're still lightyears ahead of many countries, but the gap is certainly closing quite quickly.

      Scary!

  • by Anonymous Coward on Tuesday February 10, 2009 @05:37PM (#26804187)

    The ones who are suggesting that the Chinese are incapable of making high end or innovative products.

    Are you aware of how enormously successful Chinese immigrants are in places like Silicon Valley, where there's actually money and motivation for R&D? Did you know that both ATI and Nvidia were founded by Chinese immigrants? Did you know that there are many high end computer parts companies in Taiwan (who are ethnically and culturally Chinese)? Are you aware that the average IQ of a Chinese person is 105, which is exactly the same as the average IQ of a Japanese?

    I guess what I'm trying to say here is, those of you who underestimate the Chinese will be proven wrong in the coming years, just like how nobody took Japan seriously when they first entered the electronics and automobile industries.

  • > And by 2020, the study predicts, 30 percent of all industrial output
    > should come from high-tech manufacturing.

    They should be careful what they wish for -- high-tech manufacturing is not all it's cracked up to be.

  • Chinese electronics are cheap and inferior crap, i would rather buy Japanese electronics just compare any Japanese made ham radio (or any radio) to its Chinese counterpart, too bad the USA does not do much anymore in the way of manufacturing (thank you globalism for destroying the US manufacturing capabilities)...

    now to go back to winding copper wire around a cardboard tube...
  • Of course, methinks they will all of a sudden develop a keener interest in enforcing laws protecting it. Just like other countries as they began to develop their own IP.
  • We've been giving China so much money by outsourcing everything to them. I hope they remember or appreciate our contributions to their rise when they become the superpower.

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