frightning how cheap stuff is from China

[Qikbbstang]

needed a beverage holder for my bike. They go for about $10 at bike shop. Off ebay via China total bid amount $1.21 w/free shipping and choice of color. approx. 20 days delivered on date stated.  Seemed to be the going amount.  Can you imagine handling a transaction, supplying a product, packing with Styrofoam and bubble wrap & shipping for that kind of money?.....

[jayb]

Its practically slave labor over there, the wages are so low.  And they have even been increasing lately, making China less competitive than some of her southeast Asian neighbors like Vietnam.  The other thing is that the Chinese seem to be willing to operate on extremely thin margins, compared to the rest of the world.

[cjshaker]

When you can outsell your competitors 1000:1, or maybe 10,000:1, that thin margin adds up quick. I will go WAY out of my way to look for U.S. made products if at all possible, especially when China is involved. I suppose I "waste" a lot of money that way, but It's going to hurt even worse when that local bike shop goes out of business. I hope that $8.79 was worth it.

[Barry_R]

Exactly the problem.  We as a country have bargained ourselves into a non-winnable position by trying to play "fair trade" with a country that pays pennies per hour, has no safety or environmental laws, and a never-ending supply of cheap labor.  As our country's companies fail as a result of said competition we find ourselves with no alternative than the Chinese product no matter what the cost.

Machines and metals do not know where they are plugged in or made, and you can make a very, very good product anywhere in the globe.  But if I can keep my neighbor employed by purchasing products from here without having a significant penalty in terms of cost or quality - why wouldn't I?  Maybe he'll use that paycheck to buy FE parts

[427Fastback]

I agree...I go out of my way not to buy anything from China...Whats frightening is you went to all that trouble to save ten bucks instead of supporting a local business....

[Lenz]

Things can and do come full circle though.  Back in the 70's and 80's our shop supplied the silver plating on lead wires and component cases that were used in virtually everything with electrical circuits (like Mr. coffee) as thermal cutout fuses. 

We were literally the "world" source, commonly processing 15,000,000 of these component parts weekly for the two big hitters, Emerson and 3M.

In the end, we ended up plating and shipping the component parts to China, and eventually they took the plating too.

The full circle part is that we were recently contacted to discuss our "reentry" into the supply chain.  I've seen and heard of much disillusionment in other manufacturing areas concerning China products as well.

As usual, price wins first, but then the poor quality will beat the buyer to death.  The bean counters realize that it is costing more to go cheap than to go with proven quality.

[cammerfe]

There is a strong potential in this discussion, as is also true elsewhere, to jump into the middle instead of starting at the beginning.

It used to be that entry-level jobs, with lesser pay, were recognized as such. They were a place to start and it was then expected that one would work up from there. But current thinking seems to be to demand engineering pay for pushing a broom. And so we've priced ourselves out of the market. Witness the nation-wide demand for $15 for work at McDarnold's. And that's where the discussion ought to start.

Barry said it very well up above. "...without having a significant penalty in terms of cost..." while discussing 'buying at home'. Labor is most often the most costly component in the price of an item.

My first job at FoMoCo was running a drilling machine. I was competent in about 30 seconds. And that same sort of job, today, pays about $35 an hour. Any job in which you can be able within a few seconds should pay minimum wage. And that's one small window  into why we have the situation we now have with other countries who manufacture.

KS

[AlanCasida]

 I too go way out of my way to get USA made products. It seems a lot of people want cheap products but also want a big wage. I remember when I bought my first pair of work boots in 1975. They cost me $68, almost a week's wages at the time. So, why should I expect to pay the same amount now? Since I work in, for now, one of the last strong areas (commercial jet aircraft) of US manufacturing, not just assembling, I have a real problem buying foreign(especially Chinese) made goods. But as Shakespeare once wrote "This above all: to thine own self be true".
 Chinese automation at work.  This is what Americans have to compete with.
https://www.youtube.com/watch?v=37zj4gL_iqI

[chris401]

Swamped to Nike in Jr high when I learned how Rebock shoes were made by kids.

[My427stang]

As a guy who just came back from China, and studied it extensively over the last year.  The slave labor and cheap wage argument is dying, however, it is a new situation that is equally as tough

China has a cost problem and a growing social program issue much like us.  BTW  do a Google search for China's economy growth.   It was double digit and still claims to be 7% and is really expected to be 6% which sounds great, but their regional governments have put themselves in such debt they need to be over 8% growth to maintain and with an aging workforce and declining population numbers the outlook is not the rosy expanding China of a few years ago.  Although much of what you see is "Made in China" they really aren't the assembly power house they were, what they are, are taking the role onf brokers.

They take parts, product and pieces from all other Asian countries, hell from worldwide, and then market them worldwide with Made in China on them.  Sort of odd, but their manufacturing base is about as far as it can go and their goals are to diversify into services and banking, basically follow the US model in the region

So no doubt slave labor is alive, but it is more prevalent in China's supplier countries than it is in China nowadays.  Matter of fact, you'd be amazed at how normal the place is if you are there for a while

[fe66comet]

You get what you pay for, no matter what country it comes from.

[babybolt]

I saw this on the web today:

http://fortune.com/2015/06/26/fracking-manufacturing-costs/?xid=yahoo_fortune

Don't really understand the graph where they show the labor share of the cost, and what the rest of the gray bar cost is.

[turbohunter]

Fortune magazine?

[BruceS]

The gray bar probably includes costs such as raw materials, inventory, shipping, taxes, etc.   

[My427stang]

It's a poor chart to evaluate costs, they should have just left off the gray and just made the point of labor and energy.

The remaining costs could be all costs (fixed and variable) or they could just be fixed.

If it is representing fixed costs only, it would be real estate, property taxes, heat etc.  Things that don't change in amount with factory output changes

If it is representing both fixed and variable, it would be all the prior costs, PLUS, income taxes, raw materials, trucking, etc, basically anything that goes up with more production and profit but not labor or energy (because the author of the graph separated it in this case)

Basically it is a newspaper graph to make a point not really a data/informing graph.

I will say it is NOT only fracking.  True the US is reducing our energy costs and even shifting to being an net energy exporter (make more than we use) but China uses so much, and currently has so little that it's costs comes from importing.  So as ours goes down, theirs continues to go up.

As you watch the news about the South China Sea and Chinese expansion toward Philippines, Vietnam, Malaysia, etc. and the Senkaku Islands in the East China Sea (Taiwan and Japan) realize those two areas under the ocean are assessed to have more oil than Iran

You can see that current arguments about defense,  shipping and fishing rights, and historical interest are really a veil for Chinese need to for oil, in a worse way than the US by far.

[BB-63]

Regarding the chart, I find it interesting that it shows the US labor percent of total manufacturing costs as half that of China.  So even with higher priced US laborers, vs. the Chinese "slave laborers", the percent of total cost is still less.  I assume that means that if a US manufacturer has to pay a guy $35/hr to drill a hole, they'll eventually buy a machine to replace him.  For the US laborer, we're forced to increase our capabilities to compete.

I feel like the original poster took an unfair beating. The thread assumption seems to be that the local bike shop was selling US made over Chinese made product.  I do not think that is likely but I admit I don't know.  In this case, I think what was a question of buying from your local retailer vs. over the internet turned into US vs. them, i.e. China, which I think was a bit unfair.

[ScotiaFE]

We were in Walmart today and the "Boss" wanted a really big vase.
I said I'm going for some cheap yard boots.
I found a pair of Dickies with a price tag for $29.00. DEAL!
Get to the checkout and the scan says $9.00!
The girl even got someone to check the scan!
9 buck Dickies Made in China.
I felt a little guilty about not reaching for the Made in Canada $129.00 boots, but not that guilty.