NYT: Price of electronics might surge

Maggie Leung · 07-06-2010, 04:49 PM

Interesting article, with implications about devices we all purchase:

< But what it does not reveal is that manufacturing in China is about to get far more expensive. Soaring labor costs caused by worker shortages and unrest, a strengthening Chinese currency that makes exports more expensive, and inflation and rising housing costs are all threatening to sharply increase the cost of making devices like notebook computers, digital cameras and smartphones. >

http://www.nytimes.com/2010/07/06/te...phone.html?hpw

MaggieScratch · 07-06-2010, 04:57 PM

Maybe they'll start making them in the U.S. then...we've got enough people who would be grateful for the work.

Maggie Leung · 07-06-2010, 05:06 PM

Quote:

Originally Posted by MaggieScratch

Maybe they'll start making them in the U.S. then...we've got enough people who would be grateful for the work.

Following the logic of the story and general businesses practices, that would happen only if U.S. workers would produce for even less than Chinese workers and others worldwide.

kindlekitten · 07-06-2010, 05:34 PM

Quote:

Originally Posted by Maggie Leung

Following the logic of the story and general businesses practices, that would happen only if U.S. workers would produce for even less than Chinese workers and others worldwide.

not if we ramp up import taxes to make it worth our while

ATimson · 07-06-2010, 06:02 PM

Quote:

Originally Posted by kindlekitten

not if we ramp up import taxes to make it worth our while

So you'll ramp up prices, so that the few workers who will be employed for US manufacture won't be able to afford to buy any of the toys they're making, whereas at least now when they find a job elsewhere they could afford their overseas-manufactured counterparts? Yeah, that's real worthwhile.

Maggie Leung · 07-06-2010, 06:15 PM

Quote:

Originally Posted by kindlekitten

not if we ramp up import taxes to make it worth our while

Protectionism actually does an economy more damage than good. Also note a key point in the story: Even China wants to move away from such low-return manufacturing. I don't want to discuss Econ 101, though. I linked to the article because we all spend money on electronics, and it looks as if we might end up paying more.

vaughnmr · 07-06-2010, 06:32 PM

Quote:

Originally Posted by kindlekitten

not if we ramp up import taxes to make it worth our while

I used to be a truss designer for a light gauge steel manufacturer, for residential housing. Until George Bush put the import tax on steel. Our business completely dried up. Try to find a light gauge steel framed house now.

Penforhire · 07-06-2010, 07:21 PM

Short term impact. If Chinese standard of living improves then manufacturing will move to Vietnam, as it did to Thailand in the past.

mikij · 07-06-2010, 07:25 PM

Since 4 or five years I speak to the people that Chinese and Indians will not wait forever to increase their living standard. So the business will come back here.
There is, however, another problem: the profits. Since manufacturing went to China, did the prices decrease (just look the pair of Nikes as example)? NO! But profits increased by tens of times.
Just by doing the things with a decent profit (like 10 or 20%), it won't be important where something is produced. But no, the bosses are not satisfied with 30%, they want 300%. That's the reason why we pay a lot of money for the things that cost almost nothing.

Maggie Leung · 07-06-2010, 07:37 PM

Quote:

Originally Posted by Penforhire

Short term impact. If Chinese standard of living improves then manufacturing will move to Vietnam, as it did to Thailand in the past.

I agree that some of the work will move to Vietnam; it's already started. Comparing the demographics of China vs. Vietnam, though, indicates that Vietnam cannot absorb all the work. It has to be split among countries, which complicates things, produces in efficiencies. It will be interesting to see how things develop.

fjtorres · 07-06-2010, 07:43 PM

Odds are different companies will move their products to different countries so we won't see a stampede to any one new destination.
Which would be healthier for the world economy anyway.

Would be nice if some of the re-sourced work ended up in Africa or Haiti but sadly their governments haven't positioned their countries to take advantage.

Maggie Leung · 07-06-2010, 07:47 PM

Quote:

Originally Posted by fjtorres

Odds are different companies will move their products to different countries so we won't see a stampede to any one new destination.
Which would be healthier for the world economy anyway.

Would be nice if some of the re-sourced work ended up in Africa or Haiti but sadly their governments haven't positioned their countries to take advantage.

Agreed. I think Latin America is a likelier possibility than Africa or Haiti, but again Latin America is not one nation, which makes business more unwieldy.

HansTWN · 07-06-2010, 09:45 PM

Quote:

Originally Posted by Maggie Leung

Agreed. I think Latin America is a likelier possibility than Africa or Haiti, but again Latin America is not one nation, which makes business more unwieldy.

India, Bangladesh, Indonesia, those are the ones that are taking up the slack. All components are made in Asia (Japan, Taiwan, Korea, etc) and the factories won't go to Latin America for that reason alone. Besides, Asia is the largest potential market and the last 20 years have greatly enhanced living standards in most countries. Indians and Chinese are spending like crazy. Vietnam has a labor shortage already (though electronics may move there to replace other industries) and places like most African countries and Haiti are, unfortunately not suitable for setting up factories at this time.

Maggie Leung · 07-06-2010, 09:52 PM

Quote:

Originally Posted by HansTWN

India, Bangladesh, Indonesia, those are the ones that are taking up the slack. All components are made in Asia (Japan, Taiwan, Korea, etc) and the factories won't go to Latin America for that reason alone. Besides, Asia is the largest potential market and the last 20 years have greatly enhanced living standards in most countries. Indians and Chinese are spending like crazy. Vietnam has a labor shortage already (though electronics may move their to replace other industries) and places like most African countries and Haiti are, unfortunately not suitable for setting up factories at this time.

Yes, agreed. I think Latin America more likely than Africa and Haiti, not that companies will leave Asia for Latin America.

BenLee · 07-06-2010, 11:54 PM

I don't see the US dramatically moving it's production to other countries in the short term, but probably sometime in the future for sure. There is currently so much infrastructure in China for manufacturing that it wouldn't make immediate sense. Yes, the electronics prices will go up a bit. The consumers will always absorb the costs. But there is still a long way for China to go before it would make financial sense for US companies to manufacture from elsewhere.

07-06-2010, 04:49 PM	#1
Maggie Leung Wizard Posts: 1,449 Karma: 58383 Join Date: Jul 2009 Device: Kindle, iPad	NYT: Price of electronics might surge Interesting article, with implications about devices we all purchase: < But what it does not reveal is that manufacturing in China is about to get far more expensive. Soaring labor costs caused by worker shortages and unrest, a strengthening Chinese currency that makes exports more expensive, and inflation and rising housing costs are all threatening to sharply increase the cost of making devices like notebook computers, digital cameras and smartphones. > http://www.nytimes.com/2010/07/06/te...phone.html?hpw

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
'What Price Liberty' available pre-publication as variable price ebook	garygibsonsf	Deals and Resources (No Self-Promotion or Affiliate Links)	2	11-04-2010 10:38 PM
Recent surge of US only books at Sony	Shiren	Sony Reader	11	04-07-2010 08:44 PM
FRY's Electronics lowest price on Astak EZ Reader tomorrow	Robertb	Deals and Resources (No Self-Promotion or Affiliate Links)	16	07-05-2009 10:02 AM
E-books poised for 'huge surge' in 2010, says Fictionwise exec	DaleDe	News	4	03-30-2009 01:32 PM

07-06-2010, 04:57 PM	#2
MaggieScratch Has got to the black veil Posts: 542 Karma: 2144168 Join Date: Aug 2007 Location: Southeastern Pennsylvania Device: Kobo Aura One, Kindle Paperwhite 2	Maybe they'll start making them in the U.S. then...we've got enough people who would be grateful for the work.

07-06-2010, 07:21 PM	#8
Penforhire Wizard Posts: 2,230 Karma: 7145404 Join Date: Nov 2007 Location: Southern California Device: Kindle Voyage & iPhone 7+	Short term impact. If Chinese standard of living improves then manufacturing will move to Vietnam, as it did to Thailand in the past.

07-06-2010, 07:25 PM	#9
mikij Connoisseur Posts: 98 Karma: 161 Join Date: May 2010 Location: Quebec, Canada Device: PRS-600	Since 4 or five years I speak to the people that Chinese and Indians will not wait forever to increase their living standard. So the business will come back here. There is, however, another problem: the profits. Since manufacturing went to China, did the prices decrease (just look the pair of Nikes as example)? NO! But profits increased by tens of times. Just by doing the things with a decent profit (like 10 or 20%), it won't be important where something is produced. But no, the bosses are not satisfied with 30%, they want 300%. That's the reason why we pay a lot of money for the things that cost almost nothing.

07-06-2010, 07:43 PM	#11
fjtorres Grand Sorcerer Posts: 11,732 Karma: 128354696 Join Date: May 2009 Location: 26 kly from Sgr A* Device: T100TA,PW2,PRS-T1,KT,FireHD 8.9,K2, PB360,BeBook One,Axim51v,TC1000	Odds are different companies will move their products to different countries so we won't see a stampede to any one new destination. Which would be healthier for the world economy anyway. Would be nice if some of the re-sourced work ended up in Africa or Haiti but sadly their governments haven't positioned their countries to take advantage.

07-06-2010, 11:54 PM	#15
BenLee eReader Junkie Posts: 304 Karma: 1220 Join Date: Jun 2010 Location: New York City, NY Device: Kindle + Sony	I don't see the US dramatically moving it's production to other countries in the short term, but probably sometime in the future for sure. There is currently so much infrastructure in China for manufacturing that it wouldn't make immediate sense. Yes, the electronics prices will go up a bit. The consumers will always absorb the costs. But there is still a long way for China to go before it would make financial sense for US companies to manufacture from elsewhere.