China Expected To Lay Off Millions At State-Owned…

China Expected To Lay Off Millions At State-Owned…

Mar 2, 2016

“China Expected To Lay Off Millions At State-Owned Industrial Firms” By Andy Szal, Manufacturing.net The Chinese government is reportedly preparing to implement the most severe cutbacks in state-owned enterprises — including its industrial sector — in nearly 20 years. Reuters, citing two sources with close ties to government leadership, pegged the number of layoffs planned over the next two to three years atbetween 5 million and 6 million. The government also plans to spend billions to cover the layoffs and protect against unrest. About $23 billion will be needed for the coal and steel industries alone, which the nation’s country’s human resources minister previously estimated would see 1.8 million layoffs. China plans to reduce its steel capacity by 150 million tons and its coal production by 500 million tons in coming years, and other industries with excess supply will also see job cuts. Additional funding, meanwhile, will be needed to resolve the debts of so-called “zombie firms” — state-owned companies that ceased operations but continue to pay workers — that could compromise local banks. In the midst of economic turmoil in China, officials vowed late last year tocrack down on such companies. Reuters said that the state accounted for 40 percent of the country’s industrial output and nearly half of its bank lending. About 37 million people worked for the state as of 2013....

What Could be done about China’s Theft of Intellectual Property

What Could be done about China’s  Theft of Intellectual Property

Feb 24, 2016

By Michele Nash-Hoff, Saving U.S. Manufacturing Hardly a week goes by without a report of Chinese “hacking” or Intellectual Property Theft, so it was no surprise that a published analysis by CrowdStrike, a California-based cyber security company, revealed that China violated its cyber agreement with the United States the very next day after  CNBC reported that President Obama and China’s President Xi Jinping agreed to not conduct cyber theft of intellectual property on Friday, September 25, 2015. President Obama said. “The United States government does not engage in cyber economic espionage for commercial gain, and today I can announce that our two countries have reached a common understanding on a way forward.” However, the U.S.-China agreement “does not prohibit cyber spying for national security purposes.” It is interesting to note that the day before the announcement, September 24, 2015, Chet Nagle, a former CIA agent and current Vice President of M-CAM, penned an article in the Daily Caller, stating, “At FBI headquarters in July, the head of FBI counterintelligence, Randall Coleman, said there has been a 53 percent increase in the theft of American trade secrets, thefts that have cost hundreds of billions of dollars in the past year. In an FBI  survey of 165 private companies, half of them said they were victims of economic espionage or theft of trade secrets – 95 percent of those cases involved individuals associated with the Chinese government.” He blamed the corruption of Chinese government officials for the problem and stated that “President Xi Jinping has instituted a strict anti-corruption campaign. Regrettably, the campaign has focused on “tigers” – senior government officials – at the expense of eliminating the rampant corruption by the “flies” – officials at the provincial and local level. In any event, putting a dollar value on direct corruption does not address the totality of the costs. Business confidence and foreign direct investment in China are already falling because of the absence of the rule of law.” He concluded, “China’s disregard of the rule of law should be the underlying driver for all discussions of commercial topics during the coming visit of China’s president. Lack of the rule of law is the most difficult...

What a ball pen tells us about China’s manufacturing weakness

What a ball pen tells us about China’s manufacturing weakness

Jan 26, 2016

By Ko Tin-yau, ejinsight Premier Li Keqiang recently made a shocking revelation about the industrial capabilities of China on national television: despite the fact that the country is widely known as the “world’s factory” and produces everything from iPhones, aircraft carriers, high-speed railways to spacecraft, until now there is not a single manufacturer in China that is able to produce the tiny rotating ball fitted to the tip of a ball pen that disperses ink as you write. Each of these tiny metal balls has to be imported by Chinese pen manufacturers from overseas suppliers. Many TV viewers in the mainland were deeply shocked and saddened by this revelation, as they had all been under the impression that China is already a world-class industrial power. The harsh fact is that, even though China produces 38 billion ball pens every year, it is still unable to manufacture the key component, the rotating ball point. How could a tiny component of an object so commonplace that goes for less than one US dollar prove to be an insuperable hurdle for the entire Chinese industrial complex? Qiu Zhiming, chief executive of Beifa Group Co. Ltd., China’s leading stationery manufacturer, said the reason it is so difficult to produce that component is that the ball — which is usually made of brass, steel or tungsten carbide and kept in place by a socket at the tip of the ball pen — is so tiny (usually not more than 0.1 millimeter in diameter) that it requires state-of-the-art machinery and cutting-edge computerized measurement equipment with pinpoint precision to produce, not to mention the ability to produce the high-quality steel material of which it is made. The margin for inaccuracy in the production process of this tiny ball point is basically zero, or else it won’t be able to be fitted into the socket perfectly and rotate freely in order to deliver ink. Unfortunately, all these key technologies remain the weakest links in China’s manufacturing industry even to this day. As a result, all the rotating metal balls fitted to made-in-China ball pens have to be imported from Germany, Switzerland or Japan. The root cause of China’s backwardness in some of the...

U.S. Manufacturing Leaders Say Government is Failing to…

U.S. Manufacturing Leaders Say Government is Failing to…

Jan 7, 2016

“U.S. Manufacturing Leaders Say Government is Failing to Deliver the Help They Need” By Jeff Moad, Manufacturing Leadership With several U.S. presidential candidates promising to reinvigorate the manufacturing sector and “bring home” manufacturing jobs, and with the White House attempting to keep pace with manufacturing revitalization initiatives emerging from major global competitors including China, Germany, and India, you might expect manufacturing leaders to feel that their industry, at last, is receiving from policy makers the attention and help it needs. But you would be wrong. According to a recently-completed survey by the Manufacturing Leadership Council, the vast majority of manufacturers—78%–believe that their federal government is ineffective in supporting and enabling their success, and most (60%) have little faith that that will change over the next 12 months, campaign promises notwithstanding. Only 25% said policy makers have become more aware of and responsive to the needs of manufacturers over the past 12 months. Manufacturers said governments in Germany and China, in particular, are far more effective than the U.S. federal government in developing and implementing policies that support their manufacturing sectors. Where are manufacturers most in need of help from policy makers? Overwhelmingly, respondents to the Manufacturing Advocacy Survey said they need help attracting and developing the next-generation manufacturing workforce. Manufacturers also targeted regulatory reform, tax reform, and trade reform. Of much less concern are issues such as healthcare reform, and policy concerning currency, immigration, and energy. At the same time, 62% of manufacturers said they would welcome increased government support of university research aimed at helping the industry. And most (60%) said the industry would benefit from a  cabinet-level federal government agency devoted to the support and development of manufacturing. Manufacturers responding to the survey were split on President Obama’s proposed Trans-Pacific Partnership free trade agreement, with 38% expecting a positive impact from it, and 37% expecting a negative impact. While manufacturers are highly critical of government’s performance in supporting industrial companies and markets, they don’t let themselves off the hook. In particular, manufacturers said they can and should do more to improve the public image of manufacturing. Thirty-four percent of manufacturers described the public’s view of manufacturing as negative or very negative, and they say that...

The ‘Made in China’ story is falling apart

The ‘Made in China’ story is falling apart

Dec 7, 2015

By Myles Udland, Business Insider Here’s something you hear thrown around a lot: “China is taking all of our jobs.” This was perhaps true a generation ago.  But the reality is that while China’s economy took off in the last 20 years and seemingly everything was “Made in China,” the cost of labor was forever going up. And now, China is facing an economic slowdown amid a government-sponsored shift towards the service sector and away from manufacturing, the “Made in China” story is falling apart as Mexico and Brazil become more attractive for global manufacturers. One look at this chart tells you why: labor costs about five times more in China than it did two decades ago and now costs even more than it does in Mexico. In its year-ahead outlook, Credit Suisse includes this chart as part of its argument for being bullish on Mexico, nothing that Mexico’s manufacturing competitiveness — particularly against China — is as strong as its ever been. Mexico also benefits from having 81% of its exports flow to the US — an economy that is widely seen as the best Western economy — while Brazil, which has also seen manufacturing competitiveness measured by average US dollar wages in the sector increase against China, exports 17% of its goods to China, one of this highest proportions among emerging markets. Now, it’s worth noting that in the last year Mexico has taken an edge on labor costs against China because of the dollar’s strength, which benefits free-floating currencies like the peso over pegged currencies like the yuan, but this is a blip in the grand scheme of this shift over the last two decades. (Brazil, on the other hand, has all sorts of economic problems — not the least of which is a collapse in value of the real against the dollar — and so their “gains” in competitiveness here have come with major costs. Though when measuring any US-related manufacturing impacts here, Mexico and China are more relevant comparisons regardless.) The real story here, though, is that the manufacturing story has simply changed in China and around the world. For years the story in global manufacturing was all about China: labor was cheapest and consumption was highest. And that is...