Posted tagged ‘Asia’

Is the “China Price” Over?

June 11, 2009

According to a BusinessWeek article, China has lost some of its competitive edge in manufacturing. When storage, transportation and supply disruption costs are factored in, there may be as little as a 5.5% cost difference between exporting machined goods from China and manufacturing them domestically in the U.S. The change is largely due to currency fluctuation and increased labor costs for manufacturing higher-tech items – the article points out that China still has a strong competitive advantage in toys and apparel.

More surprising, however, is that manufacturing auto parts and electrical switches in Mexico may now be 20% cheaper than in China. Even so, companies are unlikely to switch their entire supply chains over due to current investments and fears that the “yuan will drop like a stone,” making such a move both costly and futile.

But even aside from the obvious cost issues (and the article does not mention this), companies will eventually have to factor political stability more heavily in their sourcing decisions. There has been a considerable amount of grumbling over both Mexico’s violence and corruption and China’s “iffy” long-term economic prospects — the recent financial crisis has shown China the limitations of its resource-dependent, export-heavy model. China’s urban middle class comprises only a tiny minority of its population, and the bulk of the country’s people have yet to see much of the last 20 years of progress trickle down. It is not too much of a stretch to imagine that Beijing’s biggest fear – a government-toppling peasant revolt – could become a reality if millions of people are left without even $1.26/hour manufacturing jobs to sustain them. And if Mexico’s reputed lawlessness continues unchecked, companies will continue to shy away even if cost-related aspects are beneficial.

Interestingly, this article only explores Mexico as a potential sourcing option. India immediately comes to mind as a leader for U.S. manufacturing contracts, should the obvious choices become less and less attractive. In fact, India has already overtaken China in certain areas of skilled manufacturing.

BBC’s “Develop or Die” Debate

April 20, 2009

Earlier this year, BBC ran a series on sustainable development titled “Develop or Die.” I have compiled the two-part program focusing on Asia after having found the clips on YouTube.

My thoughts: While there is some finger-pointing toward the West (especially the U.S.), there is recognition that each country needs to take responsibility as well, especially in encouraging sustainable innovations within their own borders. That is an important recognition, although there probably always will be finger-pointing to some extent.

As per the YouTube description:

A debate from BBC series “Develop or Die” on the challenges facing Asian countries in their need to develop further while at the same time facing the need to do so sustainably and in an ecologically friendly way. Discussing options, alternatives, challenges and advantages of sustainable development. Recorded from BBC News on 22.02.2009.

Inspiration in Cambodia

March 4, 2009

There is not much that can be added to this story or expressed as powerfully as this video, and there is not much else that can be written as eloquently as this post.

Vodpod videos no longer available.

*Note: While The Advanced Ape and Colony Magazine are not tied to any one religious viewpoint, we do acknowledge the good work being done by such ministries to help the needy, especially those ministries who are accepting of all religions and beliefs and who do not offer aid in exchange for conversion.

The Global Financial Crisis: How Developing Communities are Coping

February 23, 2009

The global financial crisis has left few nations untouched and is hitting developing countries especially hard, as we were recently reminded by China’s Hu Jintao who used the crisis as a rally call for China’s sometimes questionable relationship and interest with impoverished African countries (think Zimbabwe). Hu recently tied up a tour of Africa as part of China’s attempts to foster close ties with the continent.

Hu’s African tour, despite China’s personal interest in the region, has highlighted the obstacles developing countries – not just in Africa but around the world – face during these challenging times:

“The impact of the crisis on economies around the world is still deepening and its grave consequences will be felt more in the days to come,” he said in a speech at a town hall gathering in the Tanzanian capital Dar es Salaam.

“It has put developing countries in a particularly disadvantaged position. Many African friends are concerned that in the face of the daunting challenges of the financial crisis, their international developing partners may scale back aid, debt relief and investment in Africa,” Hu said.

So how are developing communities coping and is it possible for them to be self-sustainable in the context of such a weak world economy?

One village in Thailand has found a solution:

During a period when foreign aid risks falling victim to strained resources, less money and donor fatigue, it’s always great to see communities find solutions on their own in creative and effective ways.

H/T to Global Voices Online and Al Jazeera.