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Subject: massive china unemployment in one year
Nanheyangrouchuan    7/18/2007 12:56:09 PM
For a little background, Chris Devonshire-Ellis is a truly "old china hand" but alot more well-adjusted and realistic than most of the hardened old timers there. His tax and accounting consultancy business started in China but is expanding to India, Pakistan, Vietnam, etc. He is one old hand worth keeping up with: His comment regarding "de-sinofication" of western outsourcing: http://www.chinalawblog.com/2007/07/china_products_forget_trust_ju.html#comments Well NHYRC, I think that may well occur. I can see definate signs that buyers are going elsewhere - India for sure, Vietnam. The reasons are many and varied but also to do with the on-going and irritating quality of the Chinese manufacturer to constantly provide inconsistant service, English-language communication difficulties, the on-going mood of the Chinese Govt to avoid a trade war with the US at all costs, and the fact that Washington seeks to strengthen it's ties with other nations (India especially). It's an Asian buying market now, not a Chinese one. 12 months and the Yuan will start to fall, growth will level out to 6% per annum and the first Chinese bankrupties will start to rear their heads. And that includes over-stated listed companies on the HKSE, Nasdaq and elsewhere. Chinese manufacturing is about to get a shock: Regional Competition is heating up. I've just had sixteen FIE's in South China tell us they are considering relocating to Chennai, and thats the tip of the iceberg. Posted by: Chris Devonshire-Ellis | July 18, 2007 12:22 AM
 
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AdvanceAustralia       7/18/2007 4:44:23 PM
I often wonder why MNCs think the PRC is the only country in the world with a pool of cheaply available labor. Given the hoops to jump through, the officials to pay off, and the arbitrary nature of an authoritarian government, the PRC does not necessarily sound like a "cheap" place to do business.

Cheers.

 
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Nanheyangrouchuan       7/18/2007 6:03:42 PM

For a little background, Chris Devonshire-Ellis is a truly "old china hand" but alot more well-adjusted and realistic than most of the hardened old timers there. His tax and accounting consultancy business started in China but is expanding to India, Pakistan, Vietnam, etc.

He is one old hand worth keeping up with: >

His comment regarding "de-sinofication" of western outsourcing:
http://www.chinalawblog.com/2007/07/china_products_forget_trust_ju.html#comments" target="_blank">link

Well NHYRC, I think that may well occur. I can see definate signs that buyers are going elsewhere - India for sure, Vietnam. The reasons are many and varied but also to do with the on-going and irritating quality of the Chinese manufacturer to constantly provide inconsistant service, English-language communication difficulties, the on-going mood of the Chinese Govt to avoid a trade war with the US at all costs, and the fact that Washington seeks to strengthen it's ties with other nations (India especially). It's an Asian buying market now, not a Chinese one. 12 months and the Yuan will start to fall, growth will level out to 6% per annum and the first Chinese bankrupties will start to rear their heads. And that includes over-stated listed companies on the HKSE, Nasdaq and elsewhere. Chinese manufacturing is about to get a shock: Regional Competition is heating up. I've just had sixteen FIE's in South China tell us they are considering relocating to Chennai, and thats the tip of the iceberg.
Posted by: Chris Devonshire-Ellis | July 18, 2007 12:22 AM


Here's the missing link:

"http://www.chinalawblog.com/2007/07/china_products_forget_trust_ju.html#comments"
 
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gf0012-aust       7/18/2007 6:23:02 PM
 
as stated by numerous others, the pinch is starting to set in across a number of areas.
 
for all the free money that china has been giving away in africa, their reputation for donating shoddily constructed roads and buildings, and the fact that "local" based chinese brokers are financially raping the local consumers is starting to bite.  they've even started to universally apply the nickname that roughly translates to "cheap salesman" - even the cubans from the old days in angola are starting to look like harvard graduates.
 
For an abject example of how this is starting to turn - look no further than the congo where chinese traders are now universally despised by the locals. the extraction of copper and other precious metals in central africa makes the "blood diamond" issue look like a charity cause....
 
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Nanheyangrouchuan       7/19/2007 12:40:55 AM
"http://www.chinalawblog.com/2007/07/china_products_forget_trust_ju.html#comments"


India is happening for sure - matter of fact I'm spending most of my time there - and just opened up three offices and a magazine - go check . Here's why: Over 380 Free Trade Zones, ten year tax breaks averaging a tax saving of @20% over what China now provides, tax breaks extending to service industries (unlike China), VAT rebates upon export (hello Beijing !), a 50% cheaper and sustainable so young workforce, and private sector money pouring into the infrastructure.

Add to that an entire raft of Indian businesses coming to China to buy up excess capacity and you get the picture. China is gradually being overtaken by its neighbour, and the Indians are coming. Mark my words.

But at least it'll give the Chinese a breather from being the only boys in town to get a kicking from the US Congress over trade imbalances. In five years time Chinese and Asian business is going to be looking a lot more Indian.

After all, check the global private equity M&A deal activity recently ? Chinese businessmen haven't got any money, but the Indians have.

And here's a crystall ball from Chris - what do you think will happen to Foreign Investment when China enacts the 20% tax on the repatriation of dividends overseas that they have actually written into their new tax reform that everyone has missed bar me ? Go look and see what it says. The China FDI shit is about to hit the fan people, unless you commit to keeping your profits here.

Posted by: Chris Devonshire-Ellis | July 18, 2007 7:06 PM


 
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GreyJackal       7/19/2007 11:27:05 AM
So China won't be a Super Power?
 
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GreyJackal       7/20/2007 5:17:30 PM
answers?
 
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Herc the Merc    Utterly ridiculous assesment   7/20/2007 6:31:07 PM
The reality is Indian manufacturers are moving to CHina. Setting up manufacturing facilities in INdia is a pain, twice the amount of time and bureaucracy as INdia-- 3 times as much actually. Power shortage is acute while China is well on its way to get 50+ more nuclear plants India is still haggling and dithering with Iran for Nat gas. Even in their most outlandish dreams China bashers need a serious reality check if they think Vietnam and India are going to displace China as the worlds factory--witness Intels new fab in China, India was screaming for it. Indian infrastructure is too weak. 10 more years for India to START the catch up game. INdians have no one to blame but themselves.
 
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AdvanceAustralia    Done deal?   7/21/2007 2:42:32 AM

The reality is Indian manufacturers are moving to CHina. Setting up manufacturing facilities in INdia is a pain, twice the amount of time and bureaucracy as INdia-- 3 times as much actually. Power shortage is acute while China is well on its way to get 50+ more nuclear plants India is still haggling and dithering with Iran for Nat gas. Even in their most outlandish dreams China bashers need a serious reality check if they think Vietnam and India are going to displace China as the worlds factory--witness Intels new fab in China, India was screaming for it. Indian infrastructure is too weak. 10 more years for India to START the catch up game. INdians have no one to blame but themselves.

"...India is still haggling and dithering with Iran for Nat gas."

Herc, you've assured us on other threads this was a done deal. Make up your mind.

 
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Arodihus    Chris who?   7/21/2007 5:12:42 PM
How old you say is his china hand?
 
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passto       7/22/2007 4:46:25 AM
Economics is not my thing, but I would have to question India taking over. From what little I know of Indian society, they have just as many issues as PRC may have. I don't doubt that countries like India and Vietnam (and I'm guessing here: Thailand, Eastern Europe/Soviet/Russia, Southeast Asia, Latin America, etc..) can do the cheap labor job (I believe they already are for some things) and could very well seize on opportunities. And I don't doubt that PRC may/will suffer economically due to self-inflicted causes (poor quality, not much oversight). But I don't see how India will completely uproot China in whatever it does. Somebody educate me

That said, theoretically, I guess the easiest way to solve all problems is to make robots that do cheap labor. One can dream . . . . . . . . .
 
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