China Not Being A Team Player

[GePap]

Originally posted by DanS
What makes you think that China would be equally accepting of this credit forever?

Why wouldn't they? The US consumer might go into 5 trillion in debt-they still get their money- it is consumers in the uS and thier creditors who get into trouble.

The basic thing is,. what does the US make the China must buy only form the uS? That they have no chance of making on their own, or that others do not make already? Consumer electronics? Sorry, but they make plenty of those themselves (as the article notes) and the rest are generally made in Asia as well. Cars? yup, bu there we compete with the Japanese and Europeans..heavy machinery? The US competes with the Euros- shipbuilding? We have to compete with Euros, Japan and SK..aircraft? Perhaps, but we do have competition..weapons: most certainly, but we won't sell to them.

[DanS]

Why wouldn't they? The US consumer might go into 5 trillion in debt-they still get their money- it is consumers in the uS and thier creditors who get into trouble.

You're forgetting that the value of the dollar relative to other currencies (besides China's) isn't fixed. As the US continues to run up that debt, the relative value of the dollar will decline.

The basic thing is,. what does the US make the China must buy only form the uS? That they have no chance of making on their own, or that others do not make already? Consumer electronics? Sorry, but they make plenty of those themselves (as the article notes) and the rest are generally made in Asia as well. Cars? yup, bu there we compete with the Japanese and Europeans..heavy machinery? The US competes with the Euros- shipbuilding? We have to compete with Euros, Japan and SK..aircraft? Perhaps, but we do have competition..weapons: most certainly, but we won't sell to them.

As the relative value of the dollar declines against the currencies of these other countries, China will get a better deal from the US for these products versus other countries. This is non-trivial. Buying a product from the US is now about 30% cheaper on a relative basis to the Euro countries than it was a couple of years ago.

[GePap]

Originally posted by DanS


You're forgetting that the value of the dollar relative to other currencies (besides China's) isn't fixed. As the US continues to run up that debt, the relative value of the dollar will decline.

Hence the chinese keep thier currency fixed..see how that works!

As the relative value of the dollar declines against the currencies of these other countries, China will get a better deal from the US for these products versus other countries. This is non-trivial. Buying a product from the US is now about 30% cheaper on a relative basis to the Euro countries than it was a couple of years ago.

True..though the article basically shows the chinese are doing what they can to establish local industries so they don;t have to buy foreign.

[JimmyCracksCorn]

Originally posted by Patroklos
Wasn't Europe on a different standard for say, computers for a long time. How costly is it to actually run seperate production lines for different regions when the differance is not just software.

The way I understand it Chinese/American products like cell phones simply won't work in other markets because their encryption/communication components are physically different. And doesn't it hurt when you can't sell a glut of product from an nonperforming market in another?

I don't know, I am honestly asking.

I know they were for computers... I remember buying games that said they would not work on European computers, and that was the early 90s.

[Whoha]

Originally posted by DanS
Well, I'm assuming that China isn't going to dump in the sea the US dollars it gains by selling the US its useless stuff, and will instead get rid of it some other way (e.g., buying our useless stuff directly or giving it to somebody else, who will buy our useless stuff). Is this a bad assumption?

they hold about 357? billion in debt.

[Ned]

I think all of this is grounded in China's effort to avoid paying patent royalties for products sold in their country. This is typical of a country that has a large market but is behind in technology.

[Kidlicious]

Originally posted by DanS
Well, I'm assuming that China isn't going to dump in the sea the US dollars it gains by selling the US its useless stuff, and will instead get rid of it some other way (e.g., buying our useless stuff directly or giving it to somebody else, who will buy our useless stuff). Is this a bad assumption?

Yes, it is a bad assumption. China uses it's exports to keep it's economy going. As long as they need to export they will continue to be willing to accumulate US dollars.

[Tingkai]

Damn Chinese, they're not team players, they're not playing by OUR rules.

[Asher]

Well, to be fair, they joined the WTO well after everyone else.

You join a game late, you play by their rules. Otherwise it's cheating.

[Urban Ranger]

Originally posted by Patroklos
Different standards will not increase competition. All it does is require manufactures to produce a different product to sell to China than the rest of the world, and they will have to pay royalties to do this outside China.

How is this different from any products that has two competiting formats?

Originally posted by Patroklos
So it is good for Chinese companies because they can produce inferior products that compete with foriegn standards, as their prices will be high.

This is a silly blanket statement.

Originally posted by Patroklos
I honestly think a world standard would be great for technology progression and competition. Basically the only way to get an edge is to out price or out build everyone else.

Regardless how good or bad that standard is? Take VHS vs Betamax for example. VHS eventually won out though it is inferior to Betamax.

[Urban Ranger]

Originally posted by Ned
I think all of this is grounded in China's effort to avoid paying patent royalties for products sold in their country. This is typical of a country that has a large market but is behind in technology.

What are you talking about? If a country is behind in technology, it will not be able to create standards in a number of areas.

[Saras]

Has it been a year already in the WTO? Well, nice move anyway

http://news.bbc.co.uk/1/hi/world/asia-pacific/3394913.stm

[Urban Ranger]

I think it's like 3 years.

[Sikander]

Originally posted by Urban Ranger

Regardless how good or bad that standard is? Take VHS vs Betamax for example. VHS eventually won out though it is inferior to Betamax.

VHS was superior in price and in marketing and quickly in market saturation as well, and that was enough for a new product that few consumers understood at the time.

[mindseye]

Well, if China is the leading world market for some product, and China happens to be the world's leading manufacturer of that product, why shouldn't the Chinese set whatever standard they want? Nothing the west hasn't been doing for a long time. In business and politics, Chinese play hardball. If there is a great advantage to setting their own standard, you can bet they will try to do so.

Having said that, I think the west faces no great peril. Imagination, originality, and creativity are just not strong points of the Chinese mentality. They are excellent assimilaters and adapters, but they are poor innovators. This applies to just about any field you can name, not just technological standard creation.

Why is this? My latest thinking is that it is attributable to two main causes: (1) a cultural aversion to risk taking (especially notable in Shanghainese), but more importantly, (2) a rote memorization-based education system that actively punishes orginal thought.