Re:Japan to fund firms to shift production out of China
by ardy42 on Thursday April 09, 2020 @03:23PM
(#22826207)
>> To be honest, I don't understand what efficiency gains this kind of globalization was supposed to bring anyways... A factory in China is just as efficient as a factory in Spain or USA.
> A factory in China is just as efficient as a factory in Spain. But if China has most of the factories, and supporting industries, and supporting education, etc. it suddenly becomes more efficient.
But I'd argue that shouldn't be considered "globalization": there's nothing "global" about concentrating things in one country. It's just outsourcing.
A factory in China is just as efficient as a factory in Spain. But if China has most of the factories, and supporting industries, and supporting education, etc. it suddenly becomes more efficient. But then if China decides it doesn't like you, you're screwed. So it's the concentration of skill you mention, but also concentration of all kinds of relevant infrastructure.
As for cheaper workers - it's a temporary "efficiency" in financial terms, in forms of price arbitrage. Over time it evaporates. Even as the 2019 was coming to an end, China was already too expensive for many industries - being the world's factory enabled them to enrich their citizens, and suddenly there was a middle class that demanded humane working conditions and employee protection and what not. So suddenly poorer countries became of interest for future manufacturing...