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The World’s Factory

Why China makes most of the world consumer electronics from James Fallows… via Margery. James writes –

What I like about this segment (not including the load of industrial goo slathered on my hair by a well-meaning Shanghai stylist just before filming, but I digress) is its emphasis on the elements other than cheap labor that have been crucial to China’s manufacturing success. Yes, $10-a-day factory wages give Chinese producers a big edge. As I explained in the magazine two years ago, they also affect the way the whole production process is planned and laid out. Eg: Some functions that would always be mechanized in the US, Japan, or Europe are done by hand in China, because the cost of the machines isn’t worth it. This has its disadvantages, yet it also can allow Chinese factories to switch from product to product much faster than a more “modern” facility could.

But there are a lot of places with much cheaper wage rates than China now. The Chinese advantage over such places — Cambodia, Bangladesh, much of Africa –  is the combination of relatively cheap labor and absolutely superb production infrastructure. Ports, industrial zones, highways headed to airports, whatever else it takes. This clip mentions the issue; the whole series goes into it at some length, and gives you an idea of what these factories look like on the inside.



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3 Comments

  1. china too suffers from the downturn…

    http://www.zerohedge.com/article/vanguard-discusses-number-one-us-export-jobs

  2. http://blog.oregonlive.com/siliconforest/2009/09/tektronix_hands_out_pink_slips.html

    “Tektronix is handing out pink slips to Oregon production workers today in conjunction with the company’s decision to shift some manufacturing to China.”

  3. You’ve confused the chicken and the egg here. All industrial nations develop the same way. China built industry off of near slave labor.. and of course the infrastructure followed. Its nice this puff piece got fallows a free trip. But spin it anyway you want it Chinas “success” is based on the corporate race to the bottom. And the line about africa et al is just flat out disengenuous.

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