| China is no longer the low-cost assembly??? | |
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| Sep 4, 2007 03:41 |   |
 | For a long time, foreign-invested companies have just taken China as their factory taking advantage of its cheap labour and land. Their Hi-tech products and profits are kept outside China. However, the situation has changed a lot in recent years. Many mutinationals regard the prosperous market as their future hubs of science and technology. According to a report form the OECD (Paris-based Organisation for Economic Co-operation and Development ), foreign research and development takes 25% to 30% of the business R& D in China. This proportion is very similar to that of other European countries. Many giants including General Electric, Microsoft, Intel, Motorola have established their research base in China or have made their plan to. What's more, more and more multinationals is starting to take China as their genuine research center. What does this suggest? China is no longer the low-cost assembly for these multinationals? Do you aggree? |
| Sep 4, 2007 18:20 | #1 |
| As you just said the one investing in R&D are... Westerners. Of course they prefer to invest in China, labour force is cheaper. But the patents created there will still be the property of Westerners (In IP law the patent you create in a company becomes the property of this company). China will be exploited, in a way or in another. It suggests that China is the biggest "provider" of post graduated students in the world every year (and very cheap compared with Europeans and Americans). It is just becoming the low-cost R&D center of the world. Tough it will remain a low-cost assembly place for multinational companies since the education in China, especially after middle school, is really expensive to a normal Chinese household. So many people without degree will still be employed as workers in these companies. Developing countries, especially China, pay a great tribute to development: the richest are becoming richer and richer, and the poorest, poorer and poorer. This is the most basic rule of capitalism. That's why if you want to avoid this phenomenon, you've got to establish many regulations to control the market, to protect the workers an so on. These rules are absent in the Chinese law because of the the Central Government's ambition to catch up with the level of the European coutries in 20 years instead of 50. This has a cost which the Chinese population is paying cash. Worker exploited, killed by the competition for profits (in mines for example), or simply ignored by the progress and left aside... Chinese poor people who have nothing will unfortunately remain a very obedient workforce for multinationals... |
| Sep 6, 2007 02:28 | #2 |
| China is still the low cost assembly for these foreign invested companies. Just as ERENCIUS said, the patents created there will still be the property of Westerners. What they want is just the profits. If China lost the advantages of the cheap labours and land, they will find other countries to invest. Such as Nike and other famous brands have invested in Vietnam and have built their factories there because they find that the labour there is much cheaper. |
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