Choosing cheap Chinese Products over Thai jobs

Choosing cheap Chinese Products over Thai jobs

Postby needchange on Sun Oct 17, 2010 2:18 pm

Everyone knows the story of what has been happening in the US in terms of the trade deficit with China. If you go to Walmart, almost every product sold there comes from China. Walmart is America's biggest retailer if I'm correct. The trend is the same at many other retailers around the country. So the US is sending loads of wealth to China.

The same story seems true here in Thailand. Over the years, I've noticed lots of cheap products sold here are actually from China. I remember buying a clock for 99 baht which promptly broke a week after I bought it. It was made in China. Last Songkran I went to buy some squirt guns for the kids to use at BigC or Lotus. I remember all of them were stamped made in China! The number of products form China are on the increase. Some of my business students have told me that now they import products rather than make them in Thailand. One used to make leather products here but it just became easier to buy from China than make it here in Thailand. It seems the switching to buying products and selling them rather than producing them yourself and then selling them is on the increase from my perspective. Everyone is out for quick easy money. This is the same way America has gone. How will Thailand fare in the end if America itself is in troubled times due to a loss in manufacturing?

Thailand should try to encourage making things in Thailand. Jobs are always an issue in Thailand so why would the government want people to give Thai jobs to the Chinese? The government should encourage Thais to make it on Thai soil and encourage the people to think about choosing Thai when they have a chance.

One problem in getting more focus on Thai production is the large Chinese population in Thailand who have the connections to bring in these cheap Chinese goods. These people who hold great sway in the marketplace here probably won't be as interested in doing it for Thailand as would an indigenous Thai. Despite this fact, the fight must go on to get more made in Thailand.

Some other isssues related to this loss of jobs are: customs control which is exploited in my view , the lack of labelling of country of origin, and a general lack of quality control which prevents trash quality products from entering the Kingdom.

What do you think of this issue?
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Re: Choosing cheap Chinese Products over Thai jobs

Postby Eric on Mon Oct 18, 2010 4:10 pm

I do believed that the China trend is slowly changing both from external pressures as well as internal pressures. We know that economics play a big role with cheaper labour costs, under-value Yuan and compromising costs to quality. However past few years have seen headline news on toxic milk, non-compliance construction materials and lead filled toys and consumers are starting to ask questions and obviously buying less. To China's government credit, they have started to tightened regulations and reining in the offenders with very serious punishments. Wages in China are starting to creep upwards especially along the coastal provinces and inland manufacturers which have cheaper labour costs will have to factor the high transportation costs to export. The Yuan has also appreciated from RMB8+ to 6+ against the greenback in last 5 years and more countries are making noise and forcing the Yuan to strengthen; perhaps not very soon but certainly in the near future.China needs a strong Yuan to increase its domestic consumption so it need not depend too much on the export sector. In short, China will not be a low and cheap production base in next 5 years. Chinese manufacturers knows that and are feeling the upward cost pressures and are either moving to the inland west or move to cheaper locations like Vietnam, Cambodia or Laos. In fact, these countries will be more of a threat to Thailand then China in the near future for low cost products. :cheers:
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Re: Choosing cheap Chinese Products over Thai jobs

Postby needchange on Tue Oct 19, 2010 6:51 am

It would not be a bad thing if in fact things turned around and China wasn't a location for cheap goods. With such a massive population and a government that can do anything and allow anything in the name of the nation, I surely doubt that China is going to give up market share. It hasn't even got started yet in terms of 'capitalism.' All nations have the desire to better their own nation. In Thailand's case, where 15% of the population is ChineseThai and still has strong cultural and traditional connections to China and that 15% controls most of the power and wealth in Thailand, it will be a challenge for those in Thailand who wish all Thais to take a more pro-Thai stance on business. The feedline of cheap Chinese products has been running for over a century. Breaking this supplyline will only happen when the Thais doing business with China choose helping Thais over quick profits.


The business relationship with China weakens the voice of all Thais. If you look at the US-China or US Saudi relationships, it's clear to see that once a dependance on the goods supplied by these countries was established the US lost power in its own decision-making. Not being able to influence these two foreign nations and instead being submissive to them has been one of the side effects of doing too much business with these nations. The US has little power over getting a deal on currency rates now that so many US companies are making money only by importing from China. It's like the drug user who becomes a slave of his supplier. The story with Saudi Arabia goes much further. It's obvious that the US has become protector of its supplier and so has gotten mixed up in foreign wars and in paying for them. So you have to ask how beneficial are these business relationship to the nation as a whole? They do benefit the importers (Walmart and oil companies) but the people are losing jobs and losing their power in terms of choosing the nations destiny.
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Re: Choosing cheap Chinese Products over Thai jobs

Postby drake on Sat Oct 23, 2010 12:49 pm

This can be a really lengthy subject, I'll try to be brief.

The problem, as I see it, isn't necessarily cheap Chinese goods or what the Chinese are doing in general but rather what Thailand isn't doing to be more competitive in the global market.

The Cultural Revolution set China back a good 50 years in term of industrial practices and productivity.
Since the mid 80s, and more so in the past decade, China had been doing everything it can to modernize it's infrastructure and industries - and hence employment capacity and general prosperity of today.

Here, it is the governmental policies and practices on the industrial sector, or lack thereof, which kept the manufacturing sector from being modern and competitive enough to stay in business on one hand and the redtapes that went on the book to help killed the mom and pop shops that is the root of the problem - corruptions and apathy aside.

I will lay this one on the poor leadership in the govt. for their lack of vision and efforts to help the country to be more competitive in the modern global market along with everyone in the govt. who had bought in to the anti-progress doctrine and perversed moral neuroses of the Western Progressives Movement.

I know that having a Coup every other third Thursday of the even months always monkeywrenched the long term roadmap but
for the past 40+ years I've watched one administration after another continuing to push the Arts/Crafts/Agricultural Cottage Industry and not really doing much as an overall policy to try to pull the country toward the future.
I've seen continuing emphasis on promoting heavy industry, the legacy of the industrial age, but very little in the Tech and Semicon sector - the engine of this 21st century digital era.
The last major semicon player, Texas Instruments, left Thailand 20 years ago and since then there hasn't been much going on here that I know of. Why is that ?
As I was told, it's because "not too many people in Thailand understand the semiconductor industry" !
<edit 08/11/10>
Seems NECTEC finally updated their website recently. I found a link out to TMEC (Thai MicroElectronics Center), which has been around for 3-4 years. They are operating a 'research' .5 micron 6" wafer fab with some commercial service and are promoting Semicon R/D.
Look like somebody is doing something after all.
</edit>

As Carlos Slim recently said "The only way to fight poverty is with employment".
I think we can all agree that the Arts/Crafts/Agricultural Cottage Industry (CP excluded) isn't going to keep much of the population fed or bring prosperity to the country overall.
The real goal, as I can see it, must be to stop focousing on these cottage and legacy industries and catch up with the tech industries - where the money is right now.

However, With the recent 'list of harmful substances' and other environment/social responsibility regs on the book or coming on the book it is hard to see any new investments coming in to the country.
I mean, who want to deal with all THAT on top of the corruptions and the Manana attitude when they can go to China, or VietNam, or Podunk and won't have to deal with all the environmental redtapes ?

Just consider one simple issue of power generation.
The country won't/can't build new power plant of any sort because the Delusional Green Loons insists that any sort of power plant at all is bad for the environment one way or another and they won't have any of it.
Instead of just pushing the irrational people aside and build something, the govt. entertains the neurotic few and do nothing.
With no electricity it means no modern industry.
No industry means no job and a continuing requirement to import goods from some other country that believe in prosperity first and environmental idealism much later.
Last edited by drake on Tue Nov 09, 2010 5:33 am, edited 1 time in total.
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Re: Choosing cheap Chinese Products over Thai jobs

Postby needchange on Wed Oct 27, 2010 8:43 am

I agree with your points about Thailand not developing the tech sector more. There are many companies involved in tech in Thailand in Prathumthani, Ayuttaya and Chonburi. Western Digital, DDK, and Seagate are a few names that come to mind. Hutchinson is building a factory here too. Of course, when it comes to the money-making industries more is better so Thailand should do more to encourage Thais and Thai educators to explore this field.

As for 'environmental redtape', I can't say I agree. As it is Thailand already has a lot of pollution. Lowering standards to be competitive is not a solution if the enviromental laws are the right thing to do. As for building power plants, well Thailand does need to do more in that area but again lowering standards is not the solution in my view. Thailand shouldn't become like China to compete with China.

In a lot of areas Thailand is competing well. The problem as I stated is that many Thais do not really have allegiance to the nation when it comes to making money. The laws against foreigners and foreign companies in Thailand are too strict against non-Asian foreigners while at the same time practically not enforced against Asian foreigners. So what's happening in Thailand is Thailand is being sold out mostly to China by those in Thailand doing business with China.

In addition, many Chinese, through corruption, have attained Thai citizenship in short time and now do business as 'Thais' without the hassles other foreigners would have to face. Many of these business people do not have the intention to help Thailand by employing Thais but rather are here for quick money by importing more and more goods from cheap China. So what happens is another 'foreigner' gets wealthy by exploiting corruption and Thais still don't have jobs. JMHO

By starting this thread I never intended to go into all the reasons why Thailand could be better businesswise but intended to focus on the Thai-Chinese connection which is the elephant in the room no one with power seems to want to acknowledge.
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Re: Choosing cheap Chinese Products over Thai jobs

Postby faranginkorat on Fri Oct 29, 2010 10:41 am

I graduated college in 1978, when nearly 40% of US employment was in value-added manufacturing.
That percentage is about 10% now.
During the recent (current) depression in the USA, I have noticed that while manufacturing has been only about 10% of the employment, it was typically 30% of jobs lost in the monthly data I saw, meaning it has decreased even more rapidly recently.
Cheap Chinese goods have had a lot to do with that.
Consequences include loss of high paying jobs, huge deficit, weakening dollar, and high unemployment.
Causes, however, are rarely discussed.
When lazy, uneducated and recalcitrant workers expect more pay in a day than Chinese workers expect in a month, where do you think manufactured goods will originate???
When unions extort ridiculous wages and benefits under threat of closing factories they are protected by the government.
When organized crime does it, it is called protection money and is illegal.
Disability claims, affirmative action, social security taxes....................................................................

Where do you think international companies will build the next factory?
Where do you think they will close the next factory??

And thus we are watching the decline of America.

The origins of this situation were in WWII when every other industrialized nation was bombed into the stone-age and had 2 generations of men disappear.

After the war, America had unique comparative advantages and prospered almost uniquely in the history of mankind.

Now those comparative advantages have mostly disappeared and the return to more "normal" circumstances is not pretty.

I expect it to continue to get worse, much, much worse.

What happens when all the factories are gone and nobody wants the rapidly inflating currency anymore?

Answer: Return to the stone-age.

Thailand is now prospering, albeit on a smaller scale than the US did after the war.

Hopefully Thai people will learn from the mistakes of America and Americans.

A few suggestions that are good for individuals and the country as well:

Invest in the future, do not borrow from the future to waste today.

This includes educating the young as best as possible, and building factories for employment.

Buy high quality items that do not go into the trash soon after being bought.

Buy Thai when possible. The Chinese can not flood your country, markets and economy with stuff if nobody buys it.

These all tie together,as the capital for building the factories should come from the collective savings of people who produce more than they consume.

Understand that this is an issue that will be determined by the people, not the government. Each day people go to work, and every time they goto the market, they make decisions that collectively determine the present and future health of the economy.

The government can not and will not do this for you.

Good luck with it.
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Re: Choosing cheap Chinese Products over Thai jobs

Postby wilko on Sun Oct 31, 2010 12:22 am

I think the OP's perception of US trade with China is incorrect and so any conclusions flowing from that must in turn be very flawed.

labour cost resources and govt spending - or in the case of the US printing of money has resulted in a swing of manufacturing away from highly paid countries. This is needed as they can then concentrate on work that pays more appropriately. china has invested heavily in buying dollars etc and shows a good balance on their books - the US does not.

Countries around the world need goods of ALL standards and China is perfectly capable of manufacturing high quality goods - just look at any familiar brand or product and the chances are you will find it was made in China and the quality is just the same as it was when manufactured bak home - form razorblades through fashion to computers the quality is as requested by the Brand Company in whatever country they may be.

Union are of course not to blame - it is management who run companies and make the final decisions.
People aren't priced out of jobs, they are priced into different areas of work - some may find this difficult but nothing is static and things change pretty quick these days - just look at the world economy over the last 3 years.

clinging to ideological concepts about US or anywhere being a "great manufacturer" is a waste of time..

you might also want to consider that in many areas - automobiles being a prime example - the US made a product that to all intents and purposes was quite useless except for an ever decreasing share of a home market.

china and Thailand will over the next few years face new problems - in fact they already are - that of a bourgeoning middle class - these people want more money are better educated and in the end want more say in how the country is run. thailand and China are at present both reacting to this kind of change in a repressive manner - this has been shown over and over not to work. in the long term, no economy can flourish under a repressive regime....both will have to give way.

for US to blame their problems on China though is a joke - they are responsible for their own decline. That decline is arguably inevitable too, and just how the US deals with it may be crucial. at present the signs don't look very good, common sense, critical thinking have given way to dogma sound-bites and bigotry as groupings like the Tea party spout nonsense about "taking America back" 0- who from and to where is unclear though - one thing is for sure the US can't go back anywhere or take back something they never had.
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Re: Choosing cheap Chinese Products over Thai jobs

Postby needchange on Mon Nov 01, 2010 5:01 pm

Well, you've got some good points. It seems like you don't believe in solutions other than letting things just go. Thailand is 15% Chinese so it has a special relationship with China.Those Chinese control most of the wealth of the nation. Business with China won't just disappear. It will always be there. I wonder what country you would look at as a model in the developing world for Thailand. Thailand has loads of protectionism in terms of agricultural products and in terms of tax on imports. There's a lot of illegal importing, much of which is probably from China. Of course none of this gets taxed. Is there any developing nation which you could recommend as an example of how Thailand should treat imports? Just being laisse fair is great for business owners but what does it do for the workers? By the way, why do you support unions, unions are a form of protectionism too.

As for the US story, there's no blame on China. China is successful because it's cheap and the laws there are lax compared to other countries. The jobs are going abroad because business owners are choosing to move companies and governments are not doing anything to encourage them to stay. People do have choices. They are choosing quick money at the expense of workers. No doubt that in time things will change and eventually people will get work again in new areas but that doesn't have to be the only option. There are plenty of companies who did choose to keep it in America. And I'm sure there are a few who choose to keep it in Thailand. Why not more? Why not think about your nation in addition to yourself? Nowadays everyone is about a quick buck.

On a side note:
I was really bothered to hear the rightwing nutter on Fox news, Glenn Beck, refer to George Bailey from the movie, 'It's a wonderful life' the other day. It's my favorite movie about an honest businessman, George Bailey, verses Mr. Potter, a businessman who exploits for quick gain at the expense of the community. If you know the movie, George Bailey makes choices at the expense of quick profits in the name of helping his community members and the great good. This is the same philosophy all businesspeople and governments should have. In the end George Bailey survives without having to leave his neighbors and ethics behind. It's a terrible shame that Glenn Beck, a real-life Mr. Potter antihero of the worker, would try to use George Bailey's name. It's anything for a dollar in the US and the worst offenders are leading the rightwing.
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Re: Choosing cheap Chinese Products over Thai jobs

Postby drake on Tue Nov 02, 2010 2:39 am

needchange wrote:On a side note:
I was really bothered to hear the rightwing nutter on Fox news, Glenn Beck, refer to George Bailey from the movie, 'It's a wonderful life' the other day. It's my favorite movie about an honest businessman, George Bailey, verses Mr. Potter, a businessman who exploits for quick gain at the expense of the community. If you know the movie, George Bailey makes choices at the expense of quick profits in the name of helping his community members and the great good. This is the same philosophy all businesspeople and governments should have. In the end George Bailey survives without having to leave his neighbors and ethics behind. It's a terrible shame that Glenn Beck, a real-life Mr. Potter antihero of the worker, would try to use George Bailey's name. It's anything for a dollar in the US and the worst offenders are leading the rightwing.

Let's leave US politics out of this shall we ?
If you missed the news, George's business eventually was crippled by the insane bureaucratic regs that was put in place by all the EnviroNuts who had infiltrated the government and eventually bankrupted by the carpetbagging Unions who would rather see the business close down and everyone unemployed instead of making a concession to keep the jobs alive.

:cheers:
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Re: Choosing cheap Chinese Products over Thai jobs

Postby drake on Tue Nov 02, 2010 2:46 am

faranginkorat wrote:I graduated college in 1978, when nearly 40% of US employment was in value-added manufacturing.
That percentage is about 10% now.
During the recent (current) depression in the USA, I have noticed that while manufacturing has been only about 10% of the employment, it was typically 30% of jobs lost in the monthly data I saw, meaning it has decreased even more rapidly recently.
Cheap Chinese goods have had a lot to do with that.
Consequences include loss of high paying jobs, huge deficit, weakening dollar, and high unemployment.
Causes, however, are rarely discussed......<snip>



You can say that again, brother.

:cheers:
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