China Now Comes to USA for Cheap Labor?

Re: [spiers] China Now Comes to USA for Cheap Labor?

Exactly... China is going to do exactly what USA has been doing... "So they
will take a
respected name (MG), build it with high priced labor, use Chinese-sourced parts,
and make
good margins" Since USA pays the most for everything, they can do this.

But a couple of points... if the Chinese can use high priced USA labor and make
money, then
labor cannot be critical. If they turn a nice profit, how so? since USA
automakers cannot. If
they do, the difference will necessarily be Chinese management, since all other
factors will be
the same.

Another reason to make cars in USA is China has a labor shortage right now, and
unemployment is rising in USA if you take govt jobs out of the picture. With
inflation, USA
labor has been getting cheaper.

I agree China will sell these cars inside usa, because they will cost too much
to sell outside
the USA, any more than any other USA car will sell well outside of usa.

Finally, the Chinese market is growing rapidly, so saturation is hard to gauge,
I suspect there
will be new car companies yearly in china, until the decide to leapfrog USA and
go completely
mag-lev.

John

On Mon, 17 Jul 2006 18:26:02 -0700, Paul Snyder
wrote :

>
> I don't think it supports your theory about management. It's just an
> investment decision. The Chinese auto market is super-saturated, so
> Nanking Motors is looking to put their money somewhere it will grow
> better. So they will take a respected name (MG), build it with high
> priced labor, use Chinese-sourced parts, and make good margins. The
> car will sell only in the US, I predict.
>
> On Jul 17, 2006, at 1:18 PM, John Spiers wrote:
>
> > Folks,
> >
> > If you believe cheap labor is a factor in int'l trade, then what do
> > you make of China to build
> > British cars in USA?
> >
> > http://tinyurl.com/lu9fq
> >
> >
> > John

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