I believe that the only way you can know which way to go is to look as forward as you can.

Sunday, March 26, 2006

Made in china: manufacturing and hi-tech research

The Big Chinese Wall was an early messenger… that the Chinese people can do everything. Maybe the Great Silk Way would be even more illustrating. Yes, China had so much to offer to the world since Antiquity… from the earl green tea to the royal purple.
You enter in a shopping market somewhere on the European or the American continent and buy a product… (such as textile or electronics or a toy) and you will often see that is manufactured in China. The Great Silk Way was as profitable as it is nowadays the Chinese export. Impressive! In my hometown, when the Chinese products entered on the local market, the local textile factory was in short time closed because it could not face the Chinese products… the price criteria was the strongest. In the last years, something interesting happened… I started to see again on the market the “Made in ” label. I started to hear people saying “I am to poor to afford something cheap. I rather buy something to put in the washing machine more than once.” Then, the Chinese products adapted and started to grow a little in price… diversifying their customer targets.
Well… the boom passed. People started to have preferences, opinions and… just more products to choose from. I must admit that the textile industry that I choose as example is a “light industry”. Things are much more complicated and SLOW in metallurgy or navy industry.
I think the product exchange starts… Some European merchandise does get to China. I am thinking about the luxury products. Yes, there are very rich people now in China. Step by step, various merchandise will start to move in both directions.
It is true that the economical analysts fear of something else. Big fashion houses have the manufacturing lines in China. If I would start talking about the computer industry… I should write a separate post. Thanks to the cheap Chinese computer manufacturing, the computers became affordable almost all over the world... And yes, this made a huge educational and technological difference. As such, the software industry developed much easier all over the world.
Yes, HP moved the divisions in China and IBM sold to Lenovo its hardware division.
Is it good is it bad, is it progress? Does the world depend now on the Chinese manufacturing? Or maybe is China dependent on the external consumers? Who depends more on who? I think the global market environment is far from reaching maturity. All this globalization thing and the huge role that China is playing is for me just an example of what the Great Silk Way became: a ramification in each store :).

The invention of the paper machine or of the magnetic compass, were just some premonitions of what nowadays China means for the world. Big hi-tech companies like Microsoft and Intel opened R&D centers in China in the last years. This means a lot more than manufacturing and yes I see in this trend the possibility for China to become one of the innovation leaders of the world. It is not anymore about manufacturing or hi-tech… but further about a country highly increasing the number of bright people. This is a healthy sign of economical growth.