China is going to be a competitor in the global mfging chain again?

[Lyinx]

China has made a lot of things in our past (still do) but they may be getting pushed back due to shipping rates and raising their prices.
I thought they were on their way out, but I seen a series of videos from a company in China, here is one of them:

View: https://www.youtube.com/watch?v=YHiwjrUENMA


what this video tells me:
They (this company anyway, 240 employees, maybe China in general) is embracing continuous improvement, and letting their guys make decisions on the factory floor (we are used to hearing that they don't have any voice, that they are all governed by top-down rules.... this is obviously not the case anymore.

what this means? China might be getting more efficient, which means lower prices (and?) higher profits.. all that it takes to wipe out American mfging would be for the cost of shipping to come back down.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Walter Hay]

I have no doubt that once the problems with shipping are over and freight rates come down again, China's manufacturing sector will boom. For a long time they have been adopting robotics at a rapid rate and that not only increases efficiency and quality due to reduction of faults due to human error, but it reduces costs.

As I said in my thread CHINA'S PLUS 1 STRATEGY, they have been moving offshore! They have been setting up manufacturing plants in various low labor cost countries. They have also begun some manufacturing some products in Japan, which is not a low labor cost country but has incredibly efficient manufacturing.

Latest reports on container shipping say that there is still a huge backlog of empty containers cluttering up some major ports as a result of Covid 19 having killed quite a few port workers.

I reported on this a few weeks ago:
"Yes the bottleneck in the Suez did have a huge impact, but C0VlD is also causing problems. Dock workers in some ports are dying in numbers that affect the port's ability to move containers.

This means many empty containers are lying idle. It also contibutes to the congestion that is plaguing many ports.

Another problem is inefficiency in a number of large shipping companies caused by the employment policy of co-determination. For those who don't know, that policy is imposed by various governments, requiring that employees be allowed to share in decision making."

Importers need to plan ahead for the time when some form of normality returns, but there will be many changes:
Chinese products made in other countries. No longer the "Made in China" labels.
Chinese companies more efficient. Their costs are falling.
Some shipments will depart from ports a long way from China.
Joint ventures, mergers and takeovers will disguise Chinese ownership.

Walter

 

[Lyinx]

I have no doubt that once the problems with shipping are over and freight rates come down again, China's manufacturing sector will boom. For a long time they have been adopting robotics at a rapid rate and that not only increases efficiency and quality due to reduction of faults due to human error, but it reduces costs.

As I said in my thread CHINA'S PLUS 1 STRATEGY, they have been moving offshore! They have been setting up manufacturing plants in various low labor cost countries. They have also begun some manufacturing some products in Japan, which is not a low labor cost country but has incredibly efficient manufacturing.

Latest reports on container shipping say that there is still a huge backlog of empty containers cluttering up some major ports as a result of C0VlD 19 having killed quite a few port workers.

I reported on this a few weeks ago:
"Yes the bottleneck in the Suez did have a huge impact, but C0VlD is also causing problems. Dock workers in some ports are dying in numbers that affect the port's ability to move containers.

This means many empty containers are lying idle. It also contibutes to the congestion that is plaguing many ports.

Another problem is inefficiency in a number of large shipping companies caused by the employment policy of co-determination. For those who don't know, that policy is imposed by various governments, requiring that employees be allowed to share in decision making."

Importers need to plan ahead for the time when some form of normality returns, but there will be many changes:
Chinese products made in other countries. No longer the "Made in China" labels.
Chinese companies more efficient. Their costs are falling.
Some shipments will depart from ports a long way from China.
Joint ventures, mergers and takeovers will disguise Chinese ownership.

Walter

My apologies Walter, I used to think you were older/stuck in your ways (no specific reason, was just my thinking), I want to commend you for keeping up with the trends, you have gained yourself a follow with this answer

 

[Kevin88660]

China has made a lot of things in our past (still do) but they may be getting pushed back due to shipping rates and raising their prices.
I thought they were on their way out, but I seen a series of videos from a company in China, here is one of them:

View: https://www.youtube.com/watch?v=YHiwjrUENMA


what this video tells me:
They (this company anyway, 240 employees, maybe China in general) is embracing continuous improvement, and letting their guys make decisions on the factory floor (we are used to hearing that they don't have any voice, that they are all governed by top-down rules.... this is obviously not the case anymore.

what this means? China might be getting more efficient, which means lower prices (and?) higher profits.. all that it takes to wipe out American mfging would be for the cost of shipping to come back down.

I think they always are a major force. Even with Trump tariffs they are just lowering their price, and sometimes get around with restriction by having the final assembly process done in Vietnam.

China already has the economy of scale for manufacturing and endless supply of engineering graduates that can support higher end manufacturing products. Recently they are pushing for vocational school training investment (modelling after Germany).

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Walter Hay]

My apologies Walter, I used to think you were older/stuck in your ways (no specific reason, was just my thinking), I want to commend you for keeping up with the trends, you have gained yourself a follow with this answer

Thanks @Lyinx I am not offended. Yes I am old, but I keep up to date. That is particularly the case regarding China trade and all international Shipping issues.

I think I owe that to my book readers. When I see something that needs to be brought to light on the forum I do so as soon as possible. I maintain contact with some old friends in China. One is a Chinese lawyer, and others own manufacturing businesses. They help to keep me up to date.

I also find relevant information in Chinese newspapers. It is often boring reading, and I don't publish that stuff on the forum.

Walter

 

[Kevin88660]

Thanks @Lyinx I am not offended. Yes I am old, but I keep up to date. That is particularly the case regarding China trade and all international Shipping issues.

I think I owe that to my book readers. When I see something that needs to be brought to light on the forum I do so as soon as possible. I maintain contact with some old friends in China. One is a Chinese lawyer, and others own manufacturing businesses. They help to keep me up to date.

I also find relevant information in Chinese newspapers. It is often boring reading, and I don't publish that stuff on the forum.

Walter

As Singapore is very near geographically to China and trade and investment between the countries are very high, China is definitely a must study for business people here.

China recently is cracking down on Big Tech, Private for profit education, Entertainment. Government is pushing a vision that “manufacturing is supreme and all others are a distraction.”

The view is that private sector development must not derail with the government’s vision.

-E-commerce/software big tech is “producing nothing” and push all resources towards business platform, online purchase and financial services which is not a good sign. Online games and social media and popular music/movies are particularly “harmful”.

-The government wanted investment and talents to go into “real productive sectors” such as telecommunication, biotech, electric cars, AI and other mid to higher end manufacturing.

-Just like the rest of world there are too many college grad aiming for office jobs. China is heavily investing and rebranding vocational schools. It is pushing kids to go into plumbing, repair work and carpentry..where the parents do not want, despite the rising wages in these blue collar jobs. Cracking down on private education is a forceful halt on the arm race between parents who wants their kids to score higher on standardized test for college degree and white collar jobs.

-Computer scientists and software engineers should work on AI and not social media algo to increase user addiction or video games. Mathematics major should not play financial games in trading but work on real data science for industrial application.

It is a very 19th century Rockefeller type of vision.

 

[maverick]

The global 3D printing market size is expected to grow USD 12.6 billion in 2021 to USD 34.8 billion by 2026, at a CAGR of 22.5%.

Within the next 5-10 years we will see a big shift towards domestic manufacturing.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[BizyDad]

Latest reports on container shipping say that there is still a huge backlog of empty containers cluttering up some major ports as a result of C0VlD 19 having killed quite a few port workers.

I reported on this a few weeks ago:
"Yes the bottleneck in the Suez did have a huge impact, but C0VlD is also causing problems. Dock workers in some ports are dying in numbers that affect the port's ability to move containers.

An all-time high of 56 cargo ships are stuck waiting off the California coast, as shipping ports hit their 4th record backup in three weeks

The labor shortage, C0VlD-19, and holiday-buying surges are causing shipping disruptions and delays at two of the most important ports in the US.

www.yahoo.com

It's getting worse before it'll get better.

 

[Lyinx]

The global 3D printing market size is expected to grow USD 12.6 billion in 2021 to USD 34.8 billion by 2026, at a CAGR of 22.5%.

Within the next 5-10 years we will see a big shift towards domestic manufacturing.

the largest cost in chinese goods is the shipping from China to the US (at this time, you could fill a container with $20,000 worth of product and pay $20,000 for shipping

china discovered oil at DuckDuckGo

DuckDuckGo. Privacy, Simplified.

duckduckgo.com

 

[pat9000]

Here is a free book by Ray Dalio Principles by Ray Dalio

It talks about how every 75 years there is a shift in power. America's run up started in 1950ish during WW2. A lot of European money came west because the war.

The state of America really makes me think it's coming time for China or someone to really come in hard and perhaps overtake the US as the top country.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Walter Hay]

the largest cost in chinese goods is the shipping from China to the US (at this time, you could fill a container with $20,000 worth of product and pay $20,000 for shipping

When I was operating my B2B importing business every shipment came by air courier or post because the products were bespoke and deadlines were tight.

The result was that freight cost was close to equal to the value of the goods.

I and my franchisees maintained a profit of 60% of selling price. Pricing was calculated at Landed Cost X 250%.

This was possible because we bought at exceptionally good prices. Sourcing was never done through sites such as Alibaba. My visits to China, HK, Taiwan, and Malaysia produced a network of contacts, and every factory was visited.

The relationships were largely instrumental in achieving those prices.

I have always maintained that profit begins with buying.

Walter

 

[Lyinx]

When I was operating my B2B importing business every shipment came by air courier or post because the products were bespoke and deadlines were tight.

The result was that freight cost was close to equal to the value of the goods.

I and my franchisees maintained a profit of 60% of selling price. Pricing was calculated at Landed Cost X 250%.

This was possible because we bought at exceptionally good prices. Sourcing was never done through sites such as Alibaba. My visits to China, HK, Taiwan, and Malaysia produced a network of contacts, and every factory was visited.

The relationships were largely instrumental in achieving those prices.

I have always maintained that profit begins with buying.

Walter

do things change when the product becomes mainstream, with multiple container loads of a product are coming in every year?

also, what's your current outlook on the oil that china found (ahem, just told everyone they found) and how that will change the community?

 

[Guest-5ty5s4]

Here is a free book by Ray Dalio Principles by Ray Dalio

It talks about how every 75 years there is a shift in power. America's run up started in 1950ish during WW2. A lot of European money came west because the war.

The state of America really makes me think it's coming time for China or someone to really come in hard and perhaps overtake the US as the top country.

When I read that, it almost felt like Ray Dalio was arguing in favor of a declining America and in support of a dominant China.

It definitely rubbed me the wrong way.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[pat9000]

When I read that, it almost felt like Ray Dalio was arguing in favor of a declining America and in support of a dominant China.

It definitely rubbed me the wrong way.

Makes sense, he does say he is investing in Chinese companies, so maybe that's his reasoning.

I don't like China or any of it's policies but looking at it from a purely logical view, America is on a struggle bus. Our monetary policy is not looking great, along with politically we have been struggling as well. I know a lot of the world has been hit hard though and China's currency is pretty weak.

 

[Walter Hay]

do things change when the product becomes mainstream, with multiple container loads of a product are coming in every year?

also, what's your current outlook on the oil that china found (ahem, just told everyone they found) and how that will change the community?

FREIGHT: It's the old story that when shipping volumes increase, the buying power for freight has an impact on the price paid to transport the goods.

BUT... there are other factors that can spoil that. Who controls the supply of empty containers? Who owns the hungriest shipping lines? Who can suddenly decide to stop handling cargo at the incoming ports? Will port worker numbers still be depleted by Covid?

We have been seeing enormous disruption to the shipping industry, and if the multiple causes behind that continue, the bargaining power of big volumes will be lost.

CHINA'S OIL: China has been extracting what we could call conventional oil from the Daqing oilfield for over 60 years, and that oil has been getting harder to produce, but they recently announced huge reserves of shale oils in that same oilfield.

The Sinopec discovery of a 100 million ton field reported by Reuters is eclipsed by the shale oil discovery in Daqing of reserves of about 1.268 billion metric tons.

According to the China Daily, figures released by the National Bureau of Statistics show that China's domestic oil production has been gradually increasing from 189.11 million tons in 2018 to 191.01 million tons in 2019 and 194.92 million tons in 2020.

China has not been running out of oil and gas, and I don't see the Sinopec discovery making any substantial difference to China's position.

Walter

 

[James90]

I have no doubt that once the problems with shipping are over and freight rates come down again, China's manufacturing sector will boom. For a long time they have been adopting robotics at a rapid rate and that not only increases efficiency and quality due to reduction of faults due to human error, but it reduces costs.

As I said in my thread CHINA'S PLUS 1 STRATEGY, they have been moving offshore! They have been setting up manufacturing plants in various low labor cost countries. They have also begun some manufacturing some products in Japan, which is not a low labor cost country but has incredibly efficient manufacturing.

Latest reports on container shipping say that there is still a huge backlog of empty containers cluttering up some major ports as a result of C0VlD 19 having killed quite a few port workers.

I reported on this a few weeks ago:
"Yes the bottleneck in the Suez did have a huge impact, but C0VlD is also causing problems. Dock workers in some ports are dying in numbers that affect the port's ability to move containers.

This means many empty containers are lying idle. It also contibutes to the congestion that is plaguing many ports.

Another problem is inefficiency in a number of large shipping companies caused by the employment policy of co-determination. For those who don't know, that policy is imposed by various governments, requiring that employees be allowed to share in decision making."

Importers need to plan ahead for the time when some form of normality returns, but there will be many changes:
Chinese products made in other countries. No longer the "Made in China" labels.
Chinese companies more efficient. Their costs are falling.
Some shipments will depart from ports a long way from China.
Joint ventures, mergers and takeovers will disguise Chinese ownership.

Walter

Interesting video I came across about how one way China is reinventing global e-commerce

View: https://www.youtube.com/watch?v=uT6FntKz8H4&t=455s


C2M - Consumer to Manufacturer

It’s putting the consumers and designers on the same level, as opposed to M2C.

Online platforms are utilized to monitor consumer trends. Ecommerce players are connecting the consumers & platforms directly to the factories.

+They can produce these trends instantly
+Monitor the market trends, in order to do it faster/cheaper


Platform Benefits

-No inventory, No warehousing (factories are sending directly to consumers)
-Lower CAC (influencers are utilized to market, and users tell each other how great a product is)
-Supply chain control (real time monitoring software that connects consumer data directly to factory production orders)
-Brand Loyalty (Community influence)

Factory Benefits
-With real time monitoring software, factories are paid on time
-Production waste decrease
-Better investments in manufacturing equipment

Consumer Benefits
-Cheaper
-Faster
-Customized/trendy
-Influencers/designers are seeing their designs/trends come to life instantly.

Cons
-Quality control (negatives from order volume and speed)
-Copying (designers can copy other designs, platforms get in trouble)
-Environment (more packaging materials needed)


Designed in China
Created in China
Branded in China

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Walter Hay]

Interesting video I came across about how one way China is reinventing global e-commerce

The presenter in another place identifies himself as a "China Evangelist", but he is more than that. He is a salesman for a Belgian company pushing their ideas on AI revolutionising world commerce.

Some of the ideas being promoted are not new, and resemble a form of dropshipping.

If adopted, their AI product development system takes everything out of the hands of Western businesses and places it all firmly under the control of Chinese companies.

The general idea is worldwide harvesting of comments on social media, and using that data their AI system automatically generates and manufactures products to satisfy the new designs subconsciously expressed in those comments. All product design work, manufacture, and delivery direct to the consumer is undertaken by Chinese companies.

If you want to know more, you will need to buy his book. My estimate of its value in the real world: $0.

Walter