America's High-Tech Quandary 10

[Mrpbody44]

I have been to China and Russia and worked with folks over there designing packing crates for large fragile art objects for The National Gallery of Art in DC. There is a very ridgid class system in both countries. The upper classes of both country's are very corrupt as well as upper management which is run by the ruling class. I agree with the previous posters about the Russians being a little more creative. One thing the Chinese will have to face in the next 20-30 years is threat of a Chinese Civil War. This could be a big problem for China and the world. We fought ours 140 years ago.

 

[ziggi]

Mrpbody44,
Why would the Chinese have a civil war?

They already had one during WW2, thats how the commies got into power, Taiwan is where all the Nationalists went to. My understanding of the Chinese is that no matter what their beliefs or geographical location, they still consider themselves Chinese.
Actually during their civil war in WW2 they stopped hostilities to fight the Japanese together.

 

[Ashereng]

Hi Bit Twiddler

Here is another thought. I have relatives who went to MIT, and University of Central Oklahoma State. People in general are very impressed with a MIT degreed graduate. However, from what my relatives tell me, the top 5 graduates, in math, from MIT are very close to those from UCO.

From a personal experience level, I have met excellent engineers from MIT, and some really not so excellent ones.

I think that there are excellent engineers from each and every engineering school (US, China, where ever), and there are not so excellent engineers from the same school (that is why buildings fall, bridges collapse, computers fail, etc).

The fact that China is producing 1 million engineer means that they are probably producing more good engineers than the US, but then again, they are also producing more not so good engineers than the US.

The trick is to get those good engineers (Chinese, American, British, etc.) to come work in the US, and not in China.

 

[BitTwiddler]

My comment about arms sales being more political than commercial was based on the fact that most countries don't sell their best stuff (H-bombs, stealth bombers, F22 fighter aircraft) to any other country. Even close allies of the US such as the UK are frustrated by the export restrictions the US imposes for second-best items such as F35 fighter aircraft.

http://www.defenseindustrydaily.com...tain-to-pull-out-of-f35-jsf-program/index.php

 

[BitTwiddler]

The US is running a huge trade deficit with the world (about $700 billion per year). Our trade deficit with China is $160 billion and rising fast. Even in areas where the US once dominated, such as the high technology sector, the US has deficits. We run a modest surplus only in services. We have deficits in virtually all areas of manufactured products, except aerospace and defense.

China appears to be making a coordinated effort to rebuild its economy and move "up the value chain" into areas of increasing technical sophistication. The US appears to have resigned itself to become a service economy and is neglecting to invest resources in manufacturing. Even high technology manufacturing plants such as fabs for Intel chips are now being built overseas.

Can anyone point out any areas where the US is investing more resources (money, research projects, bright people with technical degrees) in building things than China is?

The areas I can think of are nanotechnology, biotechnology, and medical devices. I think that the US nanotech industry is more or less in a tie with China right now, but the US appears to be ahead in the other two areas.

Also, will the US be able to invent new industries fast enough to generate enough revenue to close our trade gap by 2015?

 

[Mrpbody44]

Why another Chinese Civil War? The farmers in the outer provences have things worse now than anything in 40 years. There is also a large single male population that will never have families due to the shortage of women in the country. This historicaly has been a major factor leading to civil unrest in societies world wide. The inequality and the stranglehold that the ruling families have on the society is a revolution waiting to happen. All that is needed is a burp in the world economy and a charasmatic leader for it to reach a tipping point.

 

[bradphillips]

Bit Twiddler,

"Can anyone point out any areas where the US is investing more resources (money, research projects, bright people with technical degrees) in building things than China is?"


The U.S. is building more casinos and maybe more shopping malls than China I would say. Probably more suburban health care facilities also.

 

[davefitz]

Bittwiddler:

a) the trade gap will close as soon as the rest of the world stops lending us money

b)the resources in the US are allocated using the "invisible hand" of the free market as opposed to state control in China. For example, in the US a working couple with no children will borrow $600K (ultimately from Asia)to buy a 2 BR townhouse in San Fran while the same $600K in China would be used by the state to build 3 apartment blds to house the farmers that are migrating to the cities. Same money , different priorities.

c) as long as there is no incipient revolt, who cares how it is distributed?

 

[LCruiser]

The problem is the widgets made by the company employing the people living in the $600k townhouse will necessarily be more expensive, all other things being equal, than the ones built by the farmers who live in the much cheaper apartments.

It used to be important for labor to be 5 miles in one direction, repair parts 5 miles in another, and repairmen 5miles in a third. Now we have reliable equipment and UPS. The same widget can be made where land and raw materials are cheapest.

 

[BillPSU]

Drug companies are investing billions into new drugs.

Polymer LED's are new areas of interest.

Airborne networks both commercial and military are being developed in the US.

High tech metal casting processes are being developed.

These are just a few areas where new products and processes will emerge but then production of the technologies will move to foreign countries and the intellectual properties will be stolen and Walmartized because of the corporate greed of Wall Street. Corporate responsibility and ethics is at an all time low in the US. The revision of the bankruptcy law was driven by the credit card industry. Heaven forbid the credit card company lose money because somebody who should never of had the huge credit line the company bestowed on them files for bankruptcy.

 

[qcme]

China is growing fast as we speak. Having lived there for 4 years there is always something new. The landscape of shanghai seem to be changing constantly - there is always a new building erected almost every month. China is actively recruiting overseas Chinese to help the country develop. The country is moving a lot faster than the world can blink its eye. Before anyone knows it, China may come close to a developed country (an exaggeration yes, but it is not impossible...China has made the impossible possible). Of course there is always the social hiearchy gap...but which country isn't facing this problem? What does it matter to a country if it can grow fast?

 

[2dye4]

The trouble comes from public ownership of the largest
corporations. The stock market in other words. No
corporation can afford to lower todays revenue for a
project with a 5 year return. People would simple take
their investment money elsewhere.
To develop technology today takes massive cash. It is hard
to do in a back room with a dozen people.

 

[ELEcontrol3e]

I have to agree on moltenmetal's comment IP theft is a key issue. The biggest problem is the affect on smaller and mid-sized engineering and manufacturing firms who do not have the financial means to defend their IP. Even if they did the US federal government seems to care more about Chinese interests than the US's. Innovation is how to compete with China, but why should we, if the huge cost of IP won’t allow for protection in our own internal markets or countries we have IP agreement's with?

The real issue is how the middle class is getting squeezed. Soon enough Chinese companies will merge with US and huge muli-national things having more power than the governments to give them charter to exist. The middle class local companies (any ware in the world) won't be able to compete, and salaries will be normalized (or shall I say slashed). We will all be wage slaves of the WTO & world bank!

The original Declaration of Independence called for life, liberty, and the pursuit of property. In spirit, this includes intellectually property. What we need in the US is for "Atlas to Shrug" a little!

 

[JTreglio]

About twenty years ago everyone thought the Japanese were going to dominate the world economy. Japanese industrial growth seemed limitless, and they were buying up much of Hawaii and the west coast. But the growth was fueled by an unfair exchange rate. When I first visited Japan in 1987 the exchange rate was ~250 yen to the dollar, artificially set. When economic forces were allowed to set the exchange rate, it fell to under 100 yen to the dollar, and the Japanese economy went into severe recession. Like Japan, China's growth is in part fueled by an artificial exchange rate that grossly undervalues the yuan. When this is corrected, China's growth rate will fall rapidly. What happens then is unclear. Japanese companies still had a large domestic market to service, mostly because their employees were well-paid, so they had a large middle class. Chinese employees are not well-paid -- their industry is dependent on cheap labor -- so the crash could be quite severe.

Jim Treglio
Molecular Metallurgy, Inc.

 

[StressGuy]

What makes you think China is ever going to really let it's exchange rate be set by the free market? America has made token efforts at pushing for it, and China has made token efforts to comply. However, when it comes right down to it, America seems to be able to exert no influence whatsoever into China's behavior, and it is costing the U.S. dearly.

Edward L. Klein
Pipe Stress Engineer
Houston, Texas

"All the world is a Spring"

All opinions expressed here are my own and not my company's.

 

[moltenmetal]

China is not a democracy and has no free market, no free press, no functioning internal legal system and no respect for human rights. Forget these things at your peril.

The international community has limited ability to influence this oligarchy on any front. And that's getting worse rather than better as China's economic clout grows.

 

[flamby]

moltenmetal,

Free press, human rights and social justice are not the things a nation is born with. Such thing ultimately develop as the economy grows. I am not defending the ills of the countries doing injustice to themselves but am hopeful that situation will improve.

Look at the history of Hoover dam -- the deaths were concealed, reasons of deaths manipulated. But those were those days and times and are over for US. China may be able to address these problems as it grows. Why do you think that with progress more suppression will come?

Ciao.

 

[HVAC68]

Stand up and deliver. If you are competitive, you win. How does one become competitive ? By doing things differently, in a most efficient and cost-effective manner as possible. Ultimately it boils down to who is able to do a task better as economically as possible. He/She wins. If there is a feeling that America's engineers are going to be jobless, because China and/or India are producing more engineers, then America should start producing smarter engineers, with all the technology and knowledge acquired over the years.

HVAC68

 

[moltenmetal]

flamby: who'd have thought that you could suppress the free exchange of ideas over the internet? But China's oligarchy figured out a way to do it to an amazing extent. They will spare no expense to keep control of their population and keep themselves in power.

Will China ultimately change for the better? Yes, I'm hopeful it will- it's a question of when, and to what degree. If I see China become a true democracy in my lifetime it will be a very pleasant surprise. And I don't delude myself to think that it will occur merely by virtue of the functioning of the so-called "free market". Economics alone won't save China. International pressure with economic sticks and carrots attached has some hope, but not if nations like mine are unwilling to exercise this influence for fear of jepoardizing their access to China's growing market- even though the current trade deficit of western nations with China is enormous and growing daily.

That's why I don't believe that JTreglio is right that China will go the way of Japan by virtue of the valuation of the Chinese currency. China's oligarchy has no reason to let the Chinese currency "float" and let the market determine its value relative to other currencies unless other nations force it to do so in order to maintain access to their markets. From what I've seen, western nations like mine are too worried about what China can do to limit their access to China's growing import market to exert any effective influence over China on any front- human rights, currency policy, intellectual property, the rule of law...

HVAC68: the free market works only if it's free. You can be the most efficient and offer the best value for money and still lose to cheaper goods supported by subsidy or produced under inhuman conditions. You can also lose if your goods are subject to tarrifs that your competitor's goods aren't subject to, or if your competitor can take your technology for free without paying any part of your R&D investment. It's easier to cheat than to run the race fair and square, especially if your competitors let you get away with it.

 

[HVAC68]

You are making an assumption that cheaper goods means

(a) Supported by subsidy
(b) Produced under inhuman conditions
(c) Lower tariff
(d) Cheating and taking away somebody else's R&D investment.

Not sure how you can make such a general statement. Maybe true in some cases, but not necessarily in all cases.




HVAC68