China Roars

[Blurock]

Assembly plants do provide jobs and is better than nothing. The sad reality is that we are losing our manufacturing skills and with it our global competitiveness. Manufacturing has declined from a historical high of 22% to 12% of GDP.(Deloitte survey) The only manufacturing jobs left are those of semi or unschooled labourers that have no earning power.

Young people no longer want to do apprenticeships or study to become engineers etc. We all want to be managers, HR consultants and sales executives (they are no longer called salesmen, because the job now comes with a company car). Those "soft skills" does not add enough value, however. The time will come that we will have to import skilled people to come and change our light bulbs....

[wynn]

There are some ways to make the situation work

It’s not just gloom and doom, SA can benefit from what is happening, for everybody in SA.

Big Brother won’t go away, it's in how we deal with him and the rest of the world, that counts.

In the Eastern Cape we have witnessed the demise of many traditional small CBD businesses, they failed to adapt and as a result died, they cried about 'There being no business'.
Most CBD's were taken over by hawkers and traditional small businesses tried to carry on as usual instead of changing to suit the new shoppers that followed the hawkers, the Chinese shopkeepers filled the gap successfully.
Traditional small businesses cried about 'There being no business, which was in fact 'bullshit', the face of business just changed, in most instances business actually grew for those prepared to change, witness Ellerines, Pep Stores etc. in fact the Chinese set up a business as close as they can get to any Pep Stores in any town they can.

I believe that as 'whiteys' we need to source Chinese goods as cheaply as the Chinese shopkeepers do directly from China and compete with them directly, I believe that any South African would prefer to buy from another South African rather than a Chinese provided the prices are the same.

As for the manufacturing industry, that ship sailed a long time ago, the Unions cooked that 'golden goose' and ate it too, so don't lose any sleep over it, adapt, why would you put up with the unions and their 'crap' when you can buy what you want when you need it without all the admin that goes with having staff? (I won't go into the way the unions want to close down labour brokers here) the Chinese will get their day as soon as their workers get the idea that they too can hold business to ransom.

[pmbguy]

...the Chinese will get their day as soon as their workers get the idea that they too can hold business to ransom.

The Chinese workforce is getting restless and the rising middle class seeks change, but....the government structure is strong.

According to the Constitution of the People's Republic of China since 1982, the National People's Congress (NPC), China's top law-making body, has the power to elect and force the resignation of the President. By law, the President must be a Chinese citizen of 45 years of age or older. The President cannot serve for over two successive terms, a term being the equivalent of one session of the NPC, which is five years. Also, all the authorities and works of the President must be done under the NPC and its Standing Committee's order.

So no luck there for top down change

Imports from china will increase at some point as a general trend. But, this is only after they take over the world...

[Blurock]

So we just give up and go with the flow? Give up our skills and expertise and put everything, our future, in the hands of foreigners? No, only dead fish go with the flow.

No, we should apply our minds, be resourceful and do something for ourselves. Yes, the unions are killing business, but are we as business owners without blame? All of us can refer to at least one instance of abuse and exploitation by employers.

Heard last night of a 55+ guy employed by a garden services company in Centurion. Started beginning of March as a supervisor for one of their many teams. Had a heart attack first week in April and was admitted to hospital. (Also informed his employer, sympathy the lot). When he reported back for work about 5/6 days later, he was told that he was fired. No pay as he "absconded."

Now, if I lived in Centurion and my garden services did that, I would fire them immediately (and not pay them for the month)!

[pmbguy]

I don’t view business with China as good/bad right/wrong capitalist/communist makejobs/losejobs
It’s not black or white, it’s grey....with colour

I personally believe we should manufacture more, but just modify how we do that to be able to compete. We have enough resources, infrastructure and skills . South Africa has huge potential.


(I would do the same, garden service Centurion story)

[Dave A]

Trouble is the government and unions expect SA manufacturing to fight the good fight with both hands tied behind their back.

You must pay higher salaries than your competition.
You must accept lower productivity than your competition.
You must provide a far safer workplace environment than your competition.
You must provide medical and retirement benefits.
You must provide basic education to illiterate and semi-literate workers.
You must make social responsibility contributions.
You must reduce mechanisation and increase reliance on labour to increase employment and reduce electricity consumption.

It's like insisting someone must try to win a boxing fight by headbutting the opponent's fist.

We've either got to get really smart and productive (like Germany), or we've got to go the route of the Asian tigers.
I just can't see manufacturing cutting it the way we're being forced to do it at the moment

[Blurock]

The problem seems to be that we always want to take the easy way out. Are we just lazy or can we not see the greater benefits for our economy? (This has nothing to do with xenophobia, only long term economics). Import from China for R10 less with the least effort. Don't employ any staff and pocket the returns without any benefit to our communities. (and screw the tax man)

That is not how wealth is created. If a small number of the population enrich themselves at the cost of the rest, the inequality will catch up with us (already has) and create social problems on a massive scale that will eventually get out of hand. (already there!) Examples are Brazil, Russia, India, China, (BRICS countries!) Pakistan, Arabian and some Eastern countries etc. The French Revolution happened because of the inequality between the rulers and the people. Many revolutions were started because of inequality, not just politics.

If we really want to grow SA's wealth to the benefit of all its people, we should stop talking about nationalisation and stop exporting our raw materials without any beneficiation. Beneficiation can be the catalyst for development of new industries and create opportunities for entrepreneurs. E.g. iron ore can be turned into steel. Gold and diamonds can be turned into jewellery and then exported. The beneficiation can increase the value of exports tenfold.

The manufacturing sector provides a locus for stimulating the growth of other activities, such as services, and achieving specific outcomes, such as employment creation and economic empowerment. This platform of manufacturing presents an opportunity to significantly accelerate the country's growth and development.

Mining for instance, is a big catalyst. It creates opportunities for a number of industries such as transport, machinery suppliers, workshops, artisans and many more. If we keep on extracting our minerals without beneficiation, we will never reach our full potential and remain a beggar country that has to rely on the goodwill of foreign countries. Is that any different from colonisation?

[aaronlove]

Trouble is the government and unions expect SA manufacturing to fight the good fight with both hands tied behind their back.

You must pay higher salaries than your competition.
You must accept lower productivity than your competition.
You must provide a far safer workplace environment than your competition.
You must provide medical and retirement benefits.
You must provide basic education to illiterate and semi-literate workers.
You must make social responsibility contributions.
You must reduce mechanisation and increase reliance on labour to increase employment and reduce electricity consumption.

It's like insisting someone must try to win a boxing fight by headbutting the opponent's fist.

We've either got to get really smart and productive (like Germany), or we've got to go the route of the Asian tigers.
I just can't see manufacturing cutting it the way we're being forced to do it at the moment

Your word is very profound. These can help us do better business. I think the Chinese market very well. Their government has a good policy to investors, and that labor is very cheap. This can create more value for us.

[Dave A]

I suggest Singapore's great trick is it has positioned itself as a trading centre pretty much from the outset. Rather than a being a competitor, China's progress probably provides you with even greater opportunities to advance your strength.

[Blurock]

I suggest Singapore's great trick is it has positioned itself as a trading centre pretty much from the outset. Rather than a being a competitor, China's progress probably provides you with even greater opportunities to advance your strength.

Singapore is almost a facilitator and has positioned it well because of its favourable geological location. We, on the other hand, are becoming net importers, which is dangerous for any country's economy.