Chinese firms bargain hunting in U.S.

True this is still a relatively small macro economic factor. However, it is growing. The primary push so far is economic - not a move to lean manufacturing (as far, as I can tell) to put manufacturing close to the customer. What is the biggest factor? The USA is spending more than $400 billion every year more than it produces. The only way to consume more than you produce is to borrow (and take an obligation to pay back those that lend you money) or sell the stuff you own to those that are producing more than they are consuming. China is producing more than $200 billion more than it consumes every year.

For decades foreigners have taken debt from Americans that promise to pay back later (to pay for what they consumed). Now many are deciding that these debts are not attractive investments and are looking to own productive assets in the USA (companies, factories…). Which is smart on there part in my opinion.

Related: The Budget Deficit, the Current Account Deficit and the Saving Deficit - Moving Jobs to Silicon Valley from India - $2,540,000,000,000 in USA Consumer Debt - How to Keep the USA Manufacturing - Top 10 Manufacturing Countries 2006

Warren Buffett’s 2004 Annual Report:
(more…)

Here is updated data from the UN on manufacturing output by country. China continues to grow amazingly moving into second place for 2006. I plan to write more on this data in the Curious Cat Investing and Economics Blog. UN Data, in billions of current US dollars:

(more…)

Gopal Srinivasan is Director of TVS Electronics Limited, Joint Managing Director of Sundaram-Clayton Limited and Director of various other TVS Group companies. TVS group companies, based in India, have been awarded 5 Deming Prizes. He discusses Deming and quality a bit. He also discusses their experiences in manufacturing in China and the strengths they have found in each country. And he discusses the Indian economy and manufacturing.

In the second part of the podcast he talks about the growth of the economy of Tamil Nadu and the inclusive approach required to help India grow. via Gopal Srinivasan of TVS Group of Companies on Entrepreneurship

Related: Hopeful About India’s Manufacturing Sector - Toyota Chairman Comments on India and Thailand - Indian Deming Prize Winner Expanding - 2005 Deming Prize Awardees - 2004 Deming Prize

The newest data from the UN confirms most of the recent trends in manufacturing output - most notably that China continues to grow dramatically. The data also shows a stagnation in USA manufacturing output over the last several years, though the USA remains by far the largest manufacturer. The most significant news from this latest data, I believe, is that that manufacturing output growth in the USA has been slower than global manufacturing output growth from 2002-2005. This was not the case prior to 2002. I will be writing more on this data in the Curious Cat Investing and Economics Blog. UN Data, in billions of current US dollars:

(more…)

The Economist explores the trend to manufacture in Vietnam, Indonesia, Malaysia… instead of China in: The problem with Made in China:

It is nice to see this reported properly. The USA manufacturing share of global output has risen, not fallen, as we have stated numerous times: Manufacturing Value Added Economic Data - Manufacturing Jobs Data: USA and China - Global Manufacturing Data by Country. The most fundamental facts of global manufacturing - Global output is increasing. Jobs are decreasing (everywhere, not moving from one place to another - decreasing everywhere). China’s output is growing rapidly. The USA is still by far the largest manufacturer, USA output is growing faster than global output and much slower than China’s output. Japan is the second largest manufacturer with China third, by a fairly large margin though China is growing very rapidly.

Related: Manufacturing Jobs - China’s Manufacturing Economy - America’s Manufacturing Future
(more…)

From the Lean blog another valuable podcast: Lean in China with Jim Womack. He is not impressed with the state of lean in China yet. Lean Enterprise China has been established to aid the adoption of the best management practices in China.

Read articles by Jim Womack

Related: China’s Lean Journey - Manufacturing Jobs Data: USA and China - Toyota in China: Full Speed Ahead - Global Manufacturing Data by Country

China’s Lean Journey by Dennis J. Stamm:

Related: China’s Manufacturing Economy - Manufacturing Jobs Data: USA and China - Engineering Education: China, India and the USA

Outsourcing bubble getting Busted: What should India do? - commenting on the 2006 Global IT Outsourcing Study

Essentially the study says the outsourcing IT will continue to grow though more slowly than it has. It also states the benefits of outsourcing have not reached the level that was predicted for a number of reasons. The study predicts vastly increased competition from China for IT outsourcing work (which reinforces the general consensus).

(more…)

Brad Setser posts on manufacturing comparisons: Have China’s manufacturing powers been exaggerated?

But I would submit that the real story here is the growth in China’s conventional wisdom to improve our understanding of the real situation. I agree with him that the growth in China’s manufacturing sector is the most important story.

But, to me, that story is so over-reported that many get the wrong impression. (more…)

Manufacturing Productivity and the Shifting US, China, and Global Job Scenes-1990 to 2005 (working paper - July 2005) by William Ward, Clemson University:

In this paper he is examines the factors leading to a reduction in manufacturing job worldwide. He concludes that job losses are mainly due to increased manufacturing productivity (worldwide, manufacturing productivity is increasing and jobs are decreasing - including China). (more…)

Toyota in China: Full Speed Ahead, Business Week. Yoshimi Inaba, who’s driving the Japanese auto maker’s expansion in the Middle Kingdom, discusses the Chinese market and his goals there. Toyota’s market share is just 3.5% in China, compared to 13% in the U.S. and more than 40% at home in Japan.

K&S makes first shipment to China by Buzz Ball

(more…)

La-Z-Boy changing production lines to compete with China:

Great news. It is good when companies take the improvement strategy to cope with changes in the marketplace.
(more…)

I am still looking for a good source for manufacturing data by country and year. Today I found some data from the United Nations Statistics Division. The data for the top five manufacturing economies: China, Germany, Japan, United Kingdom and United States. Figures are in current $US billion. The data used is for Mining, Manufacturing and Utilities (because China and Germany do not have manufacturing data separated out).

For manufacturing output only:

This data shows the United States manufacturing economy is continuing to grow and is solidly the largest manufacturing economy: which contradicts what many believe. It is true manufacturing jobs are decreasing in the United States and worldwide - China is losing far more manufacturing jobs than the USA.
(more…)

China’s Economy Grew 9.9% in 2005, Overtaking France

2003 data, from Geohive (their source the World Bank):

Related posts:

• Manufacturing and the Economy
• America’s Manufacturing Future

A Wake-up Call From Asia by Patricia Panchak:

From my previous post, Relative Engineering Economic Positions:

The challenges to USA manufacturing will continue. The best hope, as I see it, for retaining manufacturing leadership in the USA is through increasing the adoption of management improvement methods including lean manufacturing.
(more…)

I just added a post, USA Under-counting Engineering Graduates, to our Curious Cat Science and Engineering Blog on a new report from Duke concerning data on engineering degrees from China, India and the USA: Framing the Engineering Outsourcing Debate. I think it is a great report. If you have any interest in this topic I strongly recommend it.

Related posts:

• Worldwide Science and Engineering Doctoral Degree Data
• Engineering Education and Innovation

(more…)