View Full Version : China Wants to Rule the World
Azathoth
11-03-2009, 20:42
http://news.bbc.co.uk/2/hi/asia-pacific/8329217.stm
China looks to export censorship
By Michael Bristow
BBC News, Beijing
A few days before the start of this year's Melbourne International Film Festival its executive director received an "audacious" telephone call.
An official from China's consulate in the city called him to "urge" the festival to withdraw a film about the Chinese activist Rebiya Kadeer.
Beijing then tried to persuade the organisers of the Frankfurt Book Fair not to allow two Chinese writers to attend an event.
China says it does not interfere in the internal affairs of other countries.
But some see these acts as an attempt by China to use abroad the tough censorship measures it constantly employs at home.
Intimidation and threats
Richard Moore, the Melbourne festival's executive director, said he was astonished to receive the call from the city's Chinese consulate.
"It came down to [the consular official] saying we need to justify our decision to include the film in the programme. It was a remarkable display of confidence and arrogance," he said.
The festival decided to ignore the advice and go ahead with the film - about an activist who campaigns for better rights for China's Uighur minority - but that did not end the issue.
The festival organisation was subjected to an intense campaign of threats, intimidation and disruption, although it is not clear who - if anyone - orchestrated the campaign.
The festival e-mail address received insulting messages, there were waves of annoying phone calls and the fax machine was jammed with callers.
Some notes to the organisers contained messages threatening Mr Moore's family.
Internet hackers managed to break into the festival's online booking site, making it appear that session tickets had been sold out.
Hackers also managed to post a Chinese flag on the main website and Chinese film-makers withdrew their movies from the festival.
The film at the centre of the controversy - called The 10 Conditions of Love - was finally shown at a larger venue, partly because the publicity surrounding the row increased interest.
Its subject, Rebiya Kadeer, was also invited to take part in a talk at the festival, which took place in July and August.
But Mr Moore admits that the event organisers will look hard at how to showcase controversial films at future festivals.
The Chinese government was just as direct with the organisers of the Frankfurt Book Fair, an annual event that bills itself as a "worldwide marketplace for ideas".
Walkout
China was the guest of honour at this October's fair and Beijing funded a series of events to showcase its literature and culture.
But Chinese officials were angry when they found out writers Dai Qing and Bei Ling had been invited to a symposium connected to the fair.
China is using its economic influence to threaten its trade partners in order to censor what they don't like
Dai Qing, author
Anger over web censorship
China seeks 'open' control
According to Juergen Boos, the fair's director, China asked the organisers to ban the writers, a request they initially agreed to carry out.
The two Chinese writers were then allowed to speak at the symposium, but when they stood up to make a speech some of the Chinese delegation left the room.
"We did not come to be instructed about democracy," a former Chinese ambassador told the event organisers.
China often asks foreign governments and organisations not to do something that it perceives to be against its interests. It recently complained to Japan when Tokyo allowed Ms Kadeer to enter the country.
But it says this does not contravene its policy of non-interference.
"I believe the Chinese government has not violated the principle of interfering in others' internal affairs," said Chinese Foreign Ministry spokesman Ma Zhaoxu recently in response to a question about this policy.
But writer Dai Qing, who is also an environmental campaigner, believes China's increasing economic muscle has emboldened the country's leaders.
"China is using its economic influence to threaten its trade partners in order to censor what they don't like," she said.
David Zweig, of the Hong Kong University of Science and Technology, is not so sure the Chinese are doing it from a position of strength.
"Sometimes we cannot tell whether it's confidence or concern," said Mr Zweig, the director of the Centre on China's Transnational Relations, based at his university.
He said China's attempts to prevent Ms Kadeer from speaking publicly, for example, could be linked to concerns about ethnic tension in Xinjiang, where most Uighurs live.
Hundreds of Uighurs rioted in July, killing scores of Han Chinese people.
Mr Zweig added that there could also be another reason behind the pressure - the Chinese government and its people are often quick to take offence at opinions they do not like to hear.
And he said ordinary people were sometimes more sensitive than officials - forcing the government to take a tougher stance internationally.
That could be why China is now trying to censor critical opinions abroad.
This has dreadful implications for the United States. Discuss.
Vladimir
11-03-2009, 21:18
Strike? :inquisitive:
Sarmatian
11-03-2009, 21:23
This has dreadful implications for the United States. Discuss.
You mean, they're no longer the only one who does it?
Vladimir
11-03-2009, 21:29
You mean, they're no longer the only one who does it?
*snark* You go girl. :cheerleader:
Sarmatian
11-03-2009, 22:55
*snark* You go girl. :cheerleader:
:inquisitive:
You've got a problem, gringo? Meet me outside the saloon, we'll see who owns this town. One on one, Pedro and Jose will stay out of it.
Louis VI the Fat
11-04-2009, 01:19
Our grandchildren will look back on the days of American supremacy with fondness and bitter regret.
Chinese government, the largest economic spy in the world.
http://www.usatoday.com/money/world/2007-07-22-china-spy-1_N.htm
A cyber spying operation based primarily in China has infiltrated government and private computers in 103 countries around the world, including the German embassy and NATO.
Echolon? Mere child's play.
http://www.smh.com.au/news/technology/security/china-linked-to-vast-cyber-spy-network/2009/03/30/1238261448496.html
Chinese imperialism: buying up arable land worldwide:
The great imperial struggles of the 1800s were over control of strategic or otherwise prized resources, and the hostilities they generated helped stoke World Wars I and II. Many believe the Iraq war was all about oil.
China is considering adopting a contemporary variant of the colonial model. A Ministry of Agriculture proposal suggests that rather than conquer territory to secure needed farmland, it could simply buy it up. But this path proves likes to engender resistance from the locals in countries with conquered occupied investee sites. This might work if done quietly, with local players acting as fronts. But this program will have to be very large scale to achieve its desired aims, which is improving food security, which makes keeping a low profile well nigh impossible.
And does China really think it can export food from large tracts of land abroad if the natives are hungry? There are major risks, such as governments asserting eminent domain to repatriate property and sabotage of transport.
China is concentrating its efforts on Africa and South America. In many areas, the control of the central government is weak. Will China wind up employing local mercenaries to secure its interests? It will be interesting to watch this initiative play out.
http://www.nakedcapitalism.com/2008/05/new-imperialist-china-to-buy.html
We should not be intimidated into submission:
http://www.taipeitimes.com/News/editorials/archives/2008/12/13/2003430988
Ignoring Chinese complaints, French President Nicolas Sarkozy met the Dalai Lama in Poland last Saturday. Sarkozy was also the first sitting president of the EU to meet the spiritual leader.
The Chinese government responded to the meeting with predictable hysteria.
Prior to the meeting, China had tried to intimidate Sarkozy through various channels.
According to reports in pro-Beijing media outlets, the threats included Premier Wen Jiabao (???) refusing to participate in a Dec. 1 summit with the EU; postponing negotiations on the purchase of French Airbus aircraft, which would affect tens of billions of US dollars in orders; and resuscitating boycotts of French goods.
ANGER
There are three reasons for China’s anger.
First, the two countries have established a comprehensive strategic partnership, but France is now refusing to assist China in the process of suppressing its enemies.
Second, 13 years ago China gave Sarkozy a high-level reception at a time when his political career wasn’t going too well.
Then, when Sarkozy visited China in November last year for the first time after becoming French president, he was given the same grand welcome as former US president Bill Clinton.
Third, China is experiencing economic problems and there is talk of a “February crisis.” Beijing is therefore trying to divert public attention by manufacturing external crises.
In addition, if other countries were to emulate Sarkozy, it would be China, and not the Dalai Lama, that would be isolated.
Sarkozy’s response was that he did not regret the meeting, and that as both French and EU president, he represented the value of — and belief in — freedom.
He also said that the world needs an open China to participate in global governance, and that China needs a strong Europe to maintain the rate of Chinese employment.
French Foreign Minister Bernard Kouchner also said: “We cannot have France’s conduct dictated to, even by our friends.”
Papewaio
11-04-2009, 01:48
Just like Rugby, when the French are at their best they are a force to be admired and they can take down the mightiest of opponents with flair be they the All Blacks or China. Just got to admire their style when the French are in form.
A Very Super Market
11-04-2009, 02:21
The Amis and Russians wish to rule the world as well. Everyone else is just in for the ride.
Also, if the Chinese government thinks thinly-veiled threats over writer's festivals is going to intimidate anyone, they must have been having a bad day in Beijing.
Strike For The South
11-04-2009, 03:11
Strike? :inquisitive:
You rang?
Centurion1
11-04-2009, 03:26
to respond simply to the title......
well duh youre a little late to the party.
@Louis, at least youre president has the cajones to meet the flipping dalai lama........ almost killed myself with shame for my country when we turned away one of the most peaceful men on earth.....
Cute Wolf
11-04-2009, 04:49
That's so awful.... pressing toward a wolrd supremacy and start giving controversial pressures to international community is awful, as if left wild, that could make the 3rd wolrd war. :skull:
But protesting films for portaying a rebel force, that threatening your integrity, on the good side is somewhat acceptable.
A Very Super Market
11-04-2009, 04:55
WWIII? Over this? Unless the rest of the world is exceedingly rude in it's response (Most likely involving thermonuclears) this will blow over. If anything, this just makes China look desperate to stir up trouble.
Evil_Maniac From Mars
11-04-2009, 04:58
The Amis and Russians wish to rule the world as well. Everyone else is just in for the ride.
The Russians don't have a chance, and any sane person would rather have the Americans over the Chinese.
Aemilius Paulus
11-04-2009, 05:15
The Russians don't have a chance.
Not the way we are going now, but I would not be so quick to dismiss it with such absolute statement. Although the likelihood of finding a good head for the behemoth of our body, of our nation, is, alas, low... :shame:
and any sane person would rather have the Americans over the Chinese.
So true, yet just how many sane people are there in this world? And how far will such an attitude take US? Half the world already hates it, and it was worse with Bush... Sure, China harbours dubious motives, and who knows what means it will use to justify the end, but abounds in examples of a more favourable overlord being overthrown and replaced with a more nefarious one due to the cunning of the latter.
DemonArchangel
11-04-2009, 06:57
to respond simply to the title......
well duh youre a little late to the party.
@Louis, at least youre president has the cajones to meet the flipping dalai lama........ almost killed myself with shame for my country when we turned away one of the most peaceful men on earth.....
The Dalai Lama peaceful?
Sure....
And Fragony is a devout Muslim.
Lord Winter
11-04-2009, 07:11
WWIII? Over this? Unless the rest of the world is exceedingly rude in it's response (Most likely involving thermonuclears) this will blow over. If anything, this just makes China look desperate to stir up trouble.
Yes, but wars tend to start over a long combination of events which usually show and underlying trend.
A Very Super Market
11-04-2009, 07:20
Not with nukes they aren't. China is just baring some teeth. A more relaxed Cold War, so to speak.
almost killed myself with shame for my country when we turned away one of the most peaceful men on earth.....
Yeahrite
https://www.youtube.com/watch?v=FOA4ixV-3jU
The Russians don't have a chance, and any sane person would rather have the Americans over the Chinese.
I would have the Europeans over the Americans.
Unfortunately, America and Russia have proven to be unable to rule even Afghanistan... ~;)
Samurai Waki
11-04-2009, 10:15
Unfortunately, America and Russia have proven to be unable to rule even Afghanistan... ~;)
I guess maybe we should have given the Mongolians a call. :beam:
Fisherking
11-04-2009, 10:38
Ever heard of the long march?
Not the one in history, but the Chinese Communist Idea that they are bound to rule the world?
I would rather not see a one world government and I certainly don’t want a conquer.
Pay attention. Sometimes it is the little things that count.
Furunculus
11-04-2009, 10:48
I would have the Europeans over the Americans.
lol, we can dream. :laugh4:
the reason why you like the europeans is precisely the reason we will never have the europeans.
lol, we can dream. :laugh4:
the reason why you like the europeans is precisely the reason we will never have the europeans.
How do you mean? :sad:
Sarmatian
11-04-2009, 11:00
We're too soft, we lack the cojones to go in gun blazing. We've lost them somewhere along the road. Look at Norwegians - they've terrorised the known world in the past, stealing food, gold and wimmin and now they're a bunch of wusses in love with everybody
Furunculus
11-04-2009, 11:01
because european nations individually do not have the balls anymore to dominate world affairs, and have yet to realise that clubbing together won't cause a spine to grow either.
WW2 has obviously been a very traumatic affair that has permanently scarred the collective national psyche.
it requires a confident, perhaps even slightly arrogant, national personality in addition to wealth and population in order to become a superpower. that is decidedly lacking!
Pff, but we're in a good situation, I doubt that Europe will be conquered by an outside force as long as it stands together.
And with our anything goes approach we're slowly converting the whole world because not much is as tempting as breaking rules and doing what you want. European imperialism just shifted to a different level, chancellor Angela Merkel was just allowed to speak before Congress in the USA, something that is usually only allowed for Presidents, or so I read. You see, she already softened up the US with her charm and good looks. :2thumbsup:
Furunculus
11-04-2009, 12:37
Angela Merkel was just allowed to speak before Congress in the USA, something that is usually only allowed for Presidents, or so I read. You see, she already softened up the US with her charm and good looks. :2thumbsup:
not to mention her tremendous rack. :balloon2:
Samurai Waki
11-04-2009, 13:51
Who would have thought German Boobs could have swayed the Americans?
Louis VI the Fat
11-04-2009, 14:04
Who would have thought German Boobs could have swayed the Americans?Ba-rack Obama is powerless before German superiority.
https://img525.imageshack.us/img525/1082/merkelmos1304468xx322.jpg (https://img525.imageshack.us/i/merkelmos1304468xx322.jpg/)
https://img337.imageshack.us/img337/8935/mediaxl905642.jpg (https://img337.imageshack.us/i/mediaxl905642.jpg/)
Vladimir
11-04-2009, 14:14
All hail pecha blancos!
Her boobs are indeed impressive. Her haircut in the pictures however looks vaguely familiar with Hitler's. Maybe she's Hitler's long lost Aryan child who will reforge the Reich?
Banquo's Ghost
11-04-2009, 20:47
Her boobs are indeed impressive. Her haircut in the pictures however looks vaguely familiar with Hitler's. Maybe she's Hitler's long lost Aryan child who will reforge the Reich?
I'm going to assume (despite the absence of any smiley) that this was meant humorously and failed.
Saying such things about anyone is pretty suspect, but the Mrs Merkel should not be characterised in such an insulting manner, which I imagine would cause great offense. Let's not continue the mistake, please.
:beadyeyes2:
Has Sarko been caught looking at ze cleavage?
Banquo's Ghost
11-04-2009, 21:00
Has Sarko been caught looking at ze cleavage?
I understand that at last year's Davos meeting he was lost in there for several hours.
Evil_Maniac From Mars
11-04-2009, 21:56
because european nations individually do not have the balls anymore to dominate world affairs, and have yet to realise that clubbing together won't cause a spine to grow either.
WW2 has obviously been a very traumatic affair that has permanently scarred the collective national psyche.
it requires a confident, perhaps even slightly arrogant, national personality in addition to wealth and population in order to become a superpower. that is decidedly lacking!
:2thumbsup:
No European nation has the ability to be the predominant world power. A unified Europe won't either (I don't want to bring up the debate on why it would be terrible anyway). And honestly, I feel more confidant about America having power than any other European nation as they currently stand, unless of course it was my own, in which case I would feel perfectly comfortable but also rather sorry for everybody else.
Not the way we are going now, but I would not be so quick to dismiss it with such absolute statement. Although the likelihood of finding a good head for the behemoth of our body, of our nation, is, alas, low... :shame:
I was indeed referring to the present Russian state of affairs.
So true, yet just how many sane people are there in this world?
That is exactly the problem.
Louis VI the Fat
11-04-2009, 22:09
Has Sarko been caught looking at ze cleavage?From what I understand, they got him a ladder so he too could sneak a peek.
https://img256.imageshack.us/img256/9977/sarkozymerkelgett239925.jpg (https://img256.imageshack.us/i/sarkozymerkelgett239925.jpg/)
France and Germany in a nutshell. ~:mecry:
~~-~~-<<oo0O0O0oo>>-~~-~~
https://img14.imageshack.us/img14/2208/sarkozymerkelbisou.jpg (https://img14.imageshack.us/i/sarkozymerkelbisou.jpg/)
Sarko with his 12 centimeter heels on. And Merkel diplomatically bending her knees a bit.
They're trying to kiss, but those German Alps prove to be a formidable barrier. Oh well, better as a buffer between us than Belgium.
A unified Europe won't either
With a greater population than the US, and a greater land area as well; what's the problem? Sounds like an excellent candidate. We're already speaking very theoretically.
Evil_Maniac From Mars
11-04-2009, 22:46
With a greater population than the US, and a greater land area as well; what's the problem? Sounds like an excellent candidate. We're already speaking very theoretically.
A common culture (or lack thereof), the lack of political will, the lack of will in the populace, the fact we'd rather spend ourselves out on the welfare state than on anything important.
HopAlongBunny
11-04-2009, 23:46
Re: China Wants to Rule the World
Correction__Re: How Long Until China Rules the World?
Samurai Waki
11-04-2009, 23:57
And when the reigns go over to China, how long do you suppose it will last?
It will have taken China about a hundred years to reach where it has, it took the UK/Britain/England nearly four times as long but they were on top much longer, and it took the US roughly 150 years to reach Superpower Status, and maybe a hundred years to lose it, so what does this say about how long China can keep being king of the mountain?
Azathoth
11-05-2009, 01:00
And when the reigns go over to China, how long do you suppose it will last?
It will have taken China about a hundred years to reach where it has, it took the UK/Britain/England nearly four times as long but they were on top much longer, and it took the US roughly 150 years to reach Superpower Status, and maybe a hundred years to lose it, so what does this say about how long China can keep being king of the mountain?
Aliens?
Evil_Maniac From Mars
11-05-2009, 01:17
China Wants to Rule the World
Don't we all. (https://www.youtube.com/watch?v=YK9O30d_yiE)
Sarmatian
11-05-2009, 01:33
Re: China Wants to Rule the World
Correction__Re: How Long Until China Rules the World?
Well, as my good friend Napoleon had said, we've had this long talk after Austerlitz, you see: Let China sleep, for when she wakes, she will shake the world.
This is just them giving us the chance to get used to it gradually... Aren't they nice?
A Very Super Market
11-05-2009, 01:36
Problem is, nukes are the great neutralizer. For the same reason you can't compare warring cavemen tribes with WWII, it is difficult to find suitable comparisons for our era. We haven't even had a major war yet, so no one even knows who's army is better.
Meneldil
11-05-2009, 08:02
The Russians don't have a chance, and any sane person would rather have the Americans over the Chinese.
Ya. I'd take the US over China anyday as the global superpower. Despite all their wrongs, the US are at least somewhat attached to the idea of liberalism, human rights and democracy.
People who still think China is somehow going to turn into a democracy thanks to an open-market and a liberal economy make me facepalm myself to death.
Prince Cobra
11-05-2009, 14:10
Back to the movies. Is anybody surprised by this? I doubt it. This country simply attempts to do what many world powers do: to influence the other countries into following its interests. That's part of the game. I am not quite happy about that but this is it. The good news is that the others have the right to decline such offers with the following consequences, which are not necessarily bad. For example, the whole case should attract some attention and perhaps many people will watch the film simply because they will be inquisitive to see what was unacceptable by China. Censorship often backfires. That's a nice example.
Vladimir
11-05-2009, 14:44
It will have taken China about a hundred years to reach where it has, it took the UK/Britain/England nearly four times as long but they were on top much longer, and it took the US roughly 150 years to reach Superpower Status, and maybe a hundred years to lose it, so what does this say about how long China can keep being king of the mountain?
100 years? :laugh4: More like 4,000+ if you're including America in there.
People don't seem to understand; China is only reaching it's limited potential. They don't have the government or culture to rival the US or even the Greatest of Britain. Before too long they'll reach the point of diminishing returns and their rise will slow precipitously from there.
Furunculus
11-05-2009, 15:28
100 years? :laugh4: More like 4,000+ if you're including America in there.
People don't seem to understand; China is only reaching it's limited potential. They don't have the government or culture to rival the US or even the Greatest of Britain. Before too long they'll reach the point of diminishing returns and their rise will slow precipitously from there.
correct:
http://whatmatters.mckinseydigital.com/globalization/when-china-is-no-1
Sarmatian
11-05-2009, 20:51
Yes, China can't get technological edge, because us westerners are just that smart. Everyone knows we were born with superior intellect.
Are some people in for a surprise...
Seamus Fermanagh
11-05-2009, 21:05
I think Furun's point was more along the lines of cultural limitation than anything else.
Why can't Mexico or Venezuela translate resource wealth into healthier economies and real prosperity? Why can't Russia side-step political strongmen as a means of governance? Why can't the USA leave "well enough" alone?
There is a deeply culture-centered reason for the answers to such questions.
China's traditional culture has NOT been supplanted by perfect communism. The family and its elders come first ahead of party, ideology, nation etc. To date, the only cultures that have made real overtures toward world hegemony have had a strong ratio-legal component in their cultural makeup. China does not.
I forget the name of the earlier poster who suggested that China's desire to rule the world began with Mao. It is not correct. The Chinese "long view" has been an aspect of their culture for millenia. The People's Republic is only the latest in a long line....
Evil_Maniac From Mars
11-05-2009, 22:03
Yes, China can't get technological edge, because us westerners are just that smart. Everyone knows we were born with superior intellect.
Are some people in for a surprise...
I don't think anybody in the thread said that. :inquisitive:
Sarmatian
11-05-2009, 22:45
I don't think anybody in the thread said that. :inquisitive:
It's in the article.
Chinese are already smarter than us as they value education highly.
Evil_Maniac From Mars
11-05-2009, 23:51
It's in the article.
Which article and where in it?
Centurion1
11-06-2009, 02:30
Chinese are already smarter than us as they value education highly.
lol, maybe you that was an ignorant statement. Many factors go into testing scores besides raw scores. such as not all chinese children scores are posted. American childrens scores are all posted. Im sure you could see the data inflation that would cause. Americans score low on tests because everyone takes the tests unlike many far east nations and also EUROPEAN countries.
Evil_Maniac From Mars
11-06-2009, 03:20
Also, Chinese and Asian students might do better coming out of high school, but for an intents and purposes American university education is better.
A Very Super Market
11-06-2009, 06:49
I can attest that it may well be true. Kids in China can simply locked in a room and forced to study (And variants thereof). This teaches both academics and blind obedience. Although the academics may just be total memorization and robotic repetition, it might just be on track to what China wants it's population to be like.
Of course, this is a minority. Other kids will tear apart the house and get in physical fights with parents. Some commit suicide, and some just do all their socializing at school.
Furunculus
11-06-2009, 10:03
it is not limited to chinese or east asian culture either, indian hindu families in britain have a level of educational and economic achievement that is the envy of many, and a polar opposite to their neighbouring immigrant groups.
Louis VI the Fat
11-06-2009, 14:46
it is not limited to chinese or east asian culture either, indian hindu families in britain have a level of educational and economic achievement that is the envy of many, and a polar opposite to their neighbouring immigrant groups.An interesting phenomenon, isn't it? It is the same everywhere else.
Paris, Chinese area:
https://img132.imageshack.us/img132/6407/chinek.jpg (https://img132.imageshack.us/i/chinek.jpg/)
Paris, Vietnamese area:
https://img26.imageshack.us/img26/998/vietnamj.jpg (https://img26.imageshack.us/i/vietnamj.jpg/)
Paris, North African area:
https://img26.imageshack.us/img26/2237/clichysousbois.jpg (https://img26.imageshack.us/i/clichysousbois.jpg/)
Paris, West African area:
https://img254.imageshack.us/img254/2963/nord.jpg (https://img254.imageshack.us/i/nord.jpg/)
Furunculus
11-07-2009, 18:42
now now Louis, don't you remember the all people are the same, that there is no discernible difference in the aims and objectives of different groups of people, nor too the price and methods they are willing to employ in achieving those aims and objectives, and it can have absolutely nothing to do with impact of the shared social and cultural history in forging this group identity!
Centurion1
11-10-2009, 05:14
heeheee, Louis made a funny
Furunculus
11-21-2009, 02:41
here is another one about china's superpower rise:
http://www.stanford.edu/group/sjir/6.1.03_miller.html
Furunculus
11-27-2009, 11:30
Where does all the real value of chinese manufactured goods actually go?
http://blogs.telegraph.co.uk/finance/edmundconway/100002310/what-the-ipod-tells-us-about-britains-economic-future/
What the iPod tells us about Britain's economic future
By Edmund Conway Economics Last updated: November 26th, 2009
In my column this morning on manufacturing (Shock news – Britain still makes things) I didn’t have space to mention one other important misconception about manufacturing: that just because something is “made in China” or somewhere else in the emerging world doesn’t necessarily mean that the money from its construction goes to that place alone. This helps explain why, in broad terms, a developed economy does not need a trade surplus (or even a balance) in order to survive.
Let’s take the iPod (or the iPhone for that matter) as an example. On the back of it it says “Designed by Apple, Made in China” or words to that effect. What this tells you is who designed it and who put it together. What it doesn’t reveal is the complex economic web that the product represents – that the cash you pay for one of them is scattered to many different countries around the world.
In a very enlightening series of papers on precisely this, a team of US academics (Greg Linden, Jason Dedrick and Kenneth L. Kraemer, all of the University of California, Irvine) have found out where the money goes, and their conclusions might come as something of a surprise.
For one, although in trade statistics the Chinese export value for a unit of a 30GB video model in 2006 was about $150 (in other words for every iPod sold $150 went onto the Chinese exports ledger) Chinese producers really only “earned” around $4. China, you see, is really just the place where most of the other components that go inside the iPod are shipped and assembled. The remaining cash instead went to the US, Japan and a host of other countries (among which the UK is one) who made the parts that go inside. In other words, where the product is not necessarily where gets the lion’s share of the profits.
In fact, this breakdown of where the cash you pay for an iPod goes shows that the vast majority finds its way straight back to the US, rather than going to China. A hefty chunk represents the retail and distribution costs (which will depend on where you are, though in the case of this diagram they are in the US), then after that Apple recoups a massive chunk, effectively for having designed the thing. The rest of the money goes to the people who make what goes inside. As it happens, for most of the (older) iPods the team examined, the most expensive components were the hard disks, which were manufactured by Toshiba, a Japanese company, in the Philippines. Here, again, the same principle was at work: the designer of the hardware recouped far more of the profit than the factory which puts it together.
Due to the way trade statistics are compiled, these flows of cash back to the US are unlikely to show up in the trade balance. But when you work out the overall US balance of payments, it will show that cash has flowed back into the country as a direct result of the intellectual property Apple owns in the iPod. It is a cursory reminder that we don’t necessarily need to hammer steel and bash products together here in the UK in order to become a better-balanced manufacturer.
There was all sorts of hand-wringing that took place a few years ago when Dyson made the decision to relocate the manufacture of their products to Malaysia, but the same principles that apply to the iPod also apply to the Dyson products. It is highly likely that Britain gets a far greater share of the proceeds from every vacuum the company sells than either Malaysia or any of the other component manufacturers or assemblers.
It is another reminder, too, of the importance of innovation for the UK economy. But before, God help me, I start sounding like Gordon Brown, here are the economists’ own conclusions. Check out their website, which has their recent papers on the real story of globalisation, trade and manufacturing.
First, nationality matters. While the iPod is manufactured offshore and has a global roster of suppliers, the greatest benefits from this innovation go to Apple, an American company, with predominantly American employees and stockholders who reap the benefits… Apple keeps its product design, software development, product management, marketing and other high value functions in the U.S. This is not necessarily because the U.S. work force has superior capabilities in all of these areas, but because Apple has developed very specialized knowledge and ways of doing things that reside within the company and would be difficult to transfer to external locations.
Second, innovation matters. The producers of high value, critical components capture a large share of the value of an innovative product… For the 30GB Video iPod, the highest-value components are the hard drive and the display, both supplied by Japanese companies. Thus Japan captures the next largest share of the value of the iPod, thanks to its companies’ strengths in those technologies. US chip makers such as Broadcom and PortalPlayer [one might also add Wolfson of Edinburgh which provides the audio codex chip] provide less costly inputs, but earn high margins and thus bring additional value to the U.S. By contrast, Inventec, which was actually responsible for assembly of this iPod (the activity that most people think of as “making” a product), earns a relatively modest share of its value. So in general, the greatest value from providing inputs to an innovative product goes to the countries whose firms provide critical, differentiated technologies.
Third, trade statistics can mislead as much as inform. For every $299 iPod sold in the U.S., the politically volatile U.S. trade deficit with China increased by about $150 (the factory cost) plus the cost of shipping. Yet the value added to the product through assembly in China is at most a few dollars. Even if we included the direct labor involved in making various parts and components in China, it would still add only marginally to China’s share of the value.
By this same logic, if the iPod were assembled in the U.S., most of the corresponding $150 bilateral (US-China) trade deficit would disappear, but the overall U.S. trade deficit associated with each unit would only fall by a few dollars. The rest would simply shift to the countries where the components are made, as those would have to be imported to the U.S. for final assembly.
This is not to say that the U.S.-China trade imbalance is not a serious concern in a broader sense, but it shows that there is a need for better data to understand what that deficit really means for each country.
To conclude, no single country is the source of all innovation and therefore U.S. companies need to work with international partners to bring new products to market. These companies will capture profits commensurate with the extra value they bring to the table. This is simply the nature of business in the 21st century, and the fact that many U.S. companies are successful in this environment brings significant benefits to the U.S. economy.
As long as the U.S. market remains dynamic, with innovative firms and risk-taking entrepreneurs, global innovation should continue to create value for American investors and wellpaid jobs for knowledge workers. But if those companies get complacent or lose focus, there are plenty of foreign competitors ready to take their places.
PS Incidentally, after writing my column I’ve received a few encouraging emails from readers who have themselves made the switch from finance to manufacturing. One is Ian Hart. Not so long ago he was employed in the City to put his scientific background and qualifications to “good use”, trading derivatives. In the wake of the crisis, he has applied them to something far more worthwhile, making gin. He has created his own London Dry Gin, Sacred Gin, which has already won a number of awards. Excellent news! If anyone has any similar stories – for instance a rocket scientist who is now actually making rockets – do let us know.
gaelic cowboy
11-27-2009, 18:16
A lot of the stuff on global product networks was covered by Thomas L. Friedman in his "The World Is Flat" book on globalisation.
The fears of people about how China will suck up all manufacturing are just that fears no company just take a simple factor like cheap labour into every equation.
A corporation would be very foolish to rely on just Chinese site's for production and it would be foolish to only have site for production only in Asia as a whole. The consequences for random events to cause havoc to the supply chain and there own ability to supply mean some places will always be dearer but kept on to retain strategic positions globally.
So a company may have four plants in Europe and America and five or six in China but they would never go below two or three in the West it is just to dangerous for them.
Wages are really the only advantage less developed nations have over more developed countries.
The raw materials, energy, tarriffs and excise etc come out all together generally all the same.
So for a western company you must shed wages but automate highly to retain a similar price for the same product in the same company.
.
Furunculus
11-27-2009, 18:31
agreed, i mentioned elsewhere in a similar thread that intel is spending its way out of the recession with a multi-billion dollar investment in 32nm lithography.................. all of which is being spent in its US plants.
a good example of what you describe above.
gaelic cowboy
11-27-2009, 18:50
It was drummed into us at College you have to now otherwise people would give up on technical subjects at precisely the time you need them to automate and streamline your business.
Also I used work for Intel in Leixlip and we were costly per wafer but the targets were always met due to investing in automation and constantly trying to innovate the process itself.
Its the only way to keep manufacturing in the West as a whole otherwise it will wither due to inaction and depression.
One major problem is in the West the economies are developed massively so large investment will return less than China however as I previously said you don't take only price into consideration all the time or you would go bust just as easily as making it too expensively.
vBulletin® v3.7.1, Copyright ©2000-2025, Jelsoft Enterprises Ltd.