Yeah, free traders despise me. But if I cared what y’all free trade fanatics thought then I wouldn’t be posting this, now would I?
The “if you don’t send jobs overseas you’ll be out-competed by cheap labor” crowd deserves to be stung by this bit of irony. This company below did offshore their production and directly because of that, they got pretty close to run out of business. Let this serve as a warning to everyone who says this can’t happen!
A Cautionary Tale Of Outsourcing To China: There Is No Recourse, You Could Lose Everything
This is a really shitty situation for Fellowes, and certainly acts as a cautionary tale about doing business in China with Chinese business partners, especially ones with political clout.
For those interested in an actual news story and not just a link to another message board, you can read about it here. More here.
Of course, this one story tells us very little about the more general issue of offshore production or business partnerships with offshore companies. But then again, look who the OP is; i don’t think anyone really expected a sensible, coherent argument.
The question of rule of law, is not a “sometimes its a good idea, sometimes its not”
The biggest impediment to China becoming an economic powerhouse was its lack of rule of law. It got Most Favored Nation status in 1980 and STILL noone would do business with China except on a cash and carry basis. There were routinely problems with Chinese banks reneging on letters of credit and Chinese exporters shorting their shipments.
At some point they got smart and realized that they could make a lot more money by enforcing rule of law rather than letting their people rip off their trading partners. And this started the flood foreign investment.
If people lose confidence in China’s rule of law, it will be a bloodbath for everyone there. As people pull out, Chinese partners will be more inclined to pull this sort of crap which will lead more people to pulling out.
You mean “offshoring production to China can get you run out of business even faster than if you don’t” isn’t coherent enough for you? Or maybe your reading skills just suck that much?
I’m surprised you free market droogies didn’t wuss out again and froth out another bullshit claim that the article somehow contradicted me. As limp-wristed as your response was this time, at least it was something new! Hell that might have even been gasp an original thought!
Zing. That one also flew right over these guys’ heads.
China thinks it can become a powerhouse by bullying everyone else. Reneging on letters of credit, stealing intellectual property, all of this comes from their belief that they have the world over a barrel.
Oh, and Zoid? Really? You think this is isolated to one company? Google “intellectual property theft China” and prepare to get shocked.
I never said intellectual property theft in China was limited to a single instance, I said you only provided one example - and it still has nothing to do with your original premise and does nothing to support you original position.
I said, let this incident serve as a warning to people who think you can’t be put out of business by sending your manufacturing overseas. Let this incident serve as a warning to those who buy into the “if we don’t use cheaper labor overseas to do our work we’ll be taken out by another competitor who does”.
My original position was quite specifically spoken: that you can be put out of business by another competitor specifically because you offshored production. The example I posted showed exactly how this happens in reality.
I don’t see why I should post more examples - seeing as that people on the Straight Dope can’t even comprehend clearly spoken words and they routinely engage in spin doctoring and go through the most contorted gyrations to claim that any cite that discredits “free trade” doesn’t mean what it means. It’s like Newspeak University in here. When it comes to economics the posters at the Straight Dope are as insular, ignorant and uncreative as any group of people who manage to learn how to breathe and walk straight.
One of these days, soon, what few people remain in support of offshoring are going to wake up, go outside and realize there’s no country for you. Ideological extinction is not too big a word for what that mindset is facing.
When I’m president of my own Mormon super-galaxy, I’m going to sic my goon squad on the OP and shove my throbbing comparative advantage down his cite’s throat (I’ll even hire someone to read it thoroughly for me). Fuck protectionism in every form.