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China Overtakes US as Supplier of IT Goods 365

Ant writes "CNET is reporting that 'after almost a decade of explosive growth in its electronics sector, China has overtaken the United States as the world's biggest supplier of Information Technology goods, according to a report by the Organization for Economic Cooperation and Development.' From the article: "The most spectacular demonstration of China's ambition to become a consumer electronics heavyweight came in May this year when Lenovo, the Chinese computer maker, paid $1.75 billion to buy IBM's personal computer unit."
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China Overtakes US as Supplier of IT Goods

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  • I for one (Score:5, Funny)

    by daliman ( 626662 ) <`slashdot' `at' `'> on Monday December 12, 2005 @07:39AM (#14237666) Homepage
    ... welcome our new chinese overlords. Better than the old ones...
  • if only (Score:4, Insightful)

    by Anonymous Coward on Monday December 12, 2005 @07:41AM (#14237670)
    if only their government didn't suck ass, they could be so great. they have immense cultural momentum, a well reasoned and disciplined populace, and a penchant for churning out intelligent people.
    • Re:if only (Score:4, Insightful)

      by m50d ( 797211 ) on Monday December 12, 2005 @08:39AM (#14237896) Homepage Journal
      You've never considered that maybe the reason they're doing so well economically is that their government has absolute control and can do unpopular things that it thinks are necessary? Don't get me wrong, I certainly prefer living in a democracy, but it would be a mistake to think a democratic government is the best in every respect.
      • The track record on economic growth for dictatorships versus democracy indicates a slight advantage for democracies, but not by much.

        Let's keep in mind that India had 40 years of democracy before they began to have pro-market reforms to improve their economy (although a lot of red tape still needs to be gotten rid of there). Modern China managed to starve 30 million of its people to death, while at the same time also taking about 40 years of dictatorship before enacting pro-market reforms (although a lot o
      • Re:if only (Score:4, Insightful)

        by Total_Wimp ( 564548 ) on Monday December 12, 2005 @11:29AM (#14239103)
        This was correctly modded insightful. Assuming the government acted only as a hinderance to the current progress is ignoring the obvious. Ther government has done quite a lot positive to thet things to the point they are today.

        The Chinese government has some very big problems, but it also has two really important things going for it.

        1)The Chinese government has shown itself to be adaptable. The level of free enterprise that exists today in China was unthinkable 50 years ago. The level of general freedom as well. The government correctly saw that the country could not compete economically without change, so it changed.

        2) Change is coming relatively slowly. This has allowed the Chinese people to become comfortable with their new rights and responsiblities and therefore use them more wisely. In the Soviet Union, where change came quickly, the people and government could not effectively make use of their newfound freedoms. The countries suffered as a result. Perhaps if they had had more time things might have turned out differently for them.

        More change must come to China. My guess is that it will come, but it will take a few more decades to get close enough to the west that we feel comfortatble.

    • Re:if only (Score:3, Insightful)

      by Pieroxy ( 222434 )
      Actually, it's quite the opposite. A totalitarian government such as China's is their greatest chance - economically speaking at least. They don't have to wait for a hard-to-boost democracy to vote stuff up, they can just do it. And they've perfectly understood the game of modern economics as played by capitalism.

      Now from all other standpoints, the picture is different.
      • While they can "just do it", this also means they can "just do" arbitrarily stupid and damaging things. Like the cultural revolution, perhaps, or back in the day when they decided to stop building ocean-going ships and ended up being colonized (well, almost) by Europe rather than the other way around.
        China will be in great shape so long as its supreme rulers keep making good decisions. It's a very fragile state of affairs however, and one small mistake can quickly cascade into a national catastrophe simply
        • simply because no one dares point out that the Leader made a mistake.

          ...err, how long was it before anyone dared point out the gee-dub-yah had nothing to go into iraq with? The few that did were branded as anti-american: so, why do you hate america?
          Having a democracy doesn't make a country immune to either error or immune to corrupt people pushing personal agendas.

          I'm not saying I'd like to live in a dictatorship, since I do enjoy the personal freedoms we have ... but let's not live in a fairy-make-b

          • Re:if only (Score:3, Insightful)

            by Golias ( 176380 )
            ...err, how long was it before anyone dared point out the gee-dub-yah had nothing to go into iraq with?

            Nonsense. He had the most powerful army in the world to go into Iraq with.

            The few that did were branded as anti-american: so, why do you hate america?

            Still waiting on that answer. ...and anyways, it seems to me that we're making pretty quick with the give-up-the-freedoms-for-security gig right now and we could be just half a step away from losing large chunks of freedom, and being no better off than the c
    • a well reasoned and disciplined populace,

      Amazing what a harsh punishment can do for a country. Here in America, we are one of the few countries that does execution. Yet, it has no real effect (one of the worst states for crime is Texas who also has the highest total and per capita executions). While I am against executions, I maintain that for them to be effective, they have to be seen and they can not have the illusion of "humane". Shoot or hang the people on TV.

      and a penchant for churning out intellig

    • if only their government didn't suck ass, they could be so great. they have immense cultural momentum, a well reasoned and disciplined populace, and a penchant for churning out intelligent people.

      If only US govt didn't suck ass, they could be so great. Blah, blah.

      Bottom line is, people don't approve what they do, nor do they like it. But I certainly would NEVER know how to maintain 1.2 billion people. I presume you wouldn't either.

      I don't think there is an "easy transition" for such a HUGE population, and I
  • Is it unexpected? (Score:5, Insightful)

    by jkrise ( 535370 ) on Monday December 12, 2005 @07:42AM (#14237671) Journal
    The day IBM sold it's PC business, this was only to be expected...

    In other news, India overtakes the US as the leading Supplier of Software Services... not too long either.
    • by Tim C ( 15259 ) on Monday December 12, 2005 @07:43AM (#14237680)
      Each country has roughly 3 - 4 times the number of citizens that the US has. On sheer numbers alone, you'd expect them to overtake eventually.
      • by ceeam ( 39911 ) on Monday December 12, 2005 @07:59AM (#14237733)
        Pakistan has roughly the same population as Japan. I've never seen a Pakistan-made car, or TV-set, or camera...
        • I've never seen a Pakistan-made car, or TV-set, or camera...

          It's not cars or TVs you'd better worry about. Let's just hope we never get to see a Pakistani-built A-bomb up close and personal.

        • Yeah but... (Score:4, Funny)

          by infinite9 ( 319274 ) on Monday December 12, 2005 @10:09AM (#14238535)
          Yeah but have you ever seen a japanese-run minimart?
        • I've never seen a Pakistan-made car, or TV-set, or camera...

          No, but you've definitely seen some Pakistan-made clothes. Now what was the main export of the Asian "Dragons" in the early phase of their development, and what is the main export of China today ? (tick.. tick.. tick..)

          Of course, Pakistan is an unstable dictatorship with about a quarter of its territory living under State-subsidised anarchy (they call that "tribal zones"). Factor in rampant fundamentalism and you get remarkably un-ideal conditions
  • How can that be? (Score:5, Insightful)

    by bit01 ( 644603 ) on Monday December 12, 2005 @07:43AM (#14237678)

    China has nowhere near as many IP lawyers protecting their "valuable intellectual property" as the USA.

    • Re:How can that be? (Score:3, Interesting)

      by Ahnteis ( 746045 )
      Funny or dead-on? I see someone else agrees with me that the US is fast becoming the international leader in lawsuits and nothing else. =(

      We're (and by we I mean the folks making the laws -- and yes, I did vote) so busy with things like the DMCA, broadcast flags, and creating new and more invasive DRM that we're quickly falling behind in other areas of innovation.
  • Hmm (Score:5, Insightful)

    by jav1231 ( 539129 ) on Monday December 12, 2005 @07:45AM (#14237684)
    Frankly, after the shootings the other day in China I wish we'd stop doing business with them. Our relationship with China is nothing to be proud of.
    • Re:Hmm (Score:5, Insightful)

      by Narc ( 126887 ) on Monday December 12, 2005 @07:51AM (#14237713)
      Where I see your point, I don't agree with it.

      You can't judge a people by their govt and their ideology, especially such an oppresive one. It's like judging America by Bush. Refusing to do business with them or have any sort of relationship with them isn't quite as simple as "I don't like that cheerleader, she's a prissy cow and ignores me". On a international level, this hurts the people already being screwed over by their govt in the long run more so.

      You have to build some form of relationship, positive ones more often than not are better, regardless of your opinion of someone. Positive relations are more effective at bringing about change.
      • You can't judge a people by their govt and their ideology, especially such an oppresive one. It's like judging America by Bush.

        Under a democracy or republic it is often more than suitable to judge a people by their government. After all, the government was selected by them!

        Assuming voting fraud did not take place (which is quite an assumption to make) during the past two American elections, the Bush government would apparently represent the views of the majority of Americans. And since no significant portio
        • It's also fair to judge a people by its dictatorship. Even dictators can't piss off *everyone* in their country without getting promptly assasinated. In a republic, you actually need less people (the electoral college) to like you than in a dictatorship (your army of bodyguards & the millitary).
        • Re:Hmm (Score:2, Insightful)

          by modernbob ( 558981 )
          Unfortunately this idea seems to make sense with the exception of the fact that we are not a democracy or a republic. The only people offered up for election are rich people and the pawns of those rich people. When someone does manage to gain some national attention that doesn't fit in the power group they are ignored by the press and often times made to be non-competitive. An example of this is in national debates where lessor known candidates are not allowed to compete. Perhaps this national debate would
        • All the elections showed is that the American people preferred one jackass over another. I don't know anyone who really liked either candidate.

          Also, the reason there is no major opposition is that most people are just living their lives like they always have. For all the talk about the Patriot Act, few people have seen any problems with it. Bush is diverting vast amounts of money into Iraq and the "war" on terror, but most people didn't see that money before Bush spent it. For the average American, Bush
      • Re:Hmm (Score:5, Insightful)

        by Newton's Alchemy ( 601066 ) on Monday December 12, 2005 @09:44AM (#14238336)
        You have to build some form of relationship, positive ones more often than not are better, regardless of your opinion of someone. Positive relations are more effective at bringing about change.

        Unless the country doesn't have nuclear weapons, then you're of course free to invade.

        The "helping the people not the government" argument is utter bullshit. It helps US Corporations to do business in China, period. THAT's why we still do business with them and not in places like North Korea. It has NOTHING to do with helping the average Chinese.
    • Re:Hmm (Score:4, Insightful)

      by martinmcc ( 214402 ) on Monday December 12, 2005 @07:53AM (#14237715) Homepage
      yeah, They should learn that they should only do bad things to people after flying them to a different country, or if they report things they don't like, or have oil or stuff.

      I really don't think America can take the moral high ground on anything atm.

      • So? No country can (Score:4, Insightful)

        by SmallFurryCreature ( 593017 ) on Monday December 12, 2005 @09:49AM (#14238381) Journal
        Doesn't it crack anyone up that germany of all countries has the gall to tell the rest of the world what is right or not? For that matter japan? Yet both want a seat on the security council. Lets see, we have had two world wars both started by the germans. How about eh. NO.

        Application denied forever. Comeback in a thousand years and maybe we lets you back.

        England? Read up on their empire and it is their politics that led to the whole mess in the middle east with how the formation of Israel was handled, they should have created a palistine at the same time or at least given Israel better borders (the whole golan heights issue is because it gives syria a very easy front to attack from and a very difficult for Israel to defend). Oh and who created the situation between India and Pakistan.

        So the axis nations are out. Maybe france? Can you say vietnam? No thanks and that leaves out the US as well. China is out for obvious reasons. Russia? Oh boy no.

        Maybe a small country like say my own the netherlands? Nope, indonesia and our other former colonies show that we are just hitlers on a miniature scale and anyway our behaviour during WW2 was appaling.

        The belgians? Please they got a goverment so corrupt that it makes the italians look capable.

        Australians? Maybe after they do somthing to right the wrong committed against the natives.

        It doesn't exactly leave anyone? Sooner or later pretty much every country has done stuff in the last century that shows that if a country/society/ethnic group has a change they will murder rape and slaughter those they think of as less important.

        The only reason some countries at the moment behave is because they would get their asses kicked if they didn't. Nazi sympathy in germany is still sky high but the russians would never tolerate them getting in a position of power to the power that be in germany sit on it at the moment but still refuse to deport war criminals or lock them up.

        No kiddo, no country can take the moral highground. Wich isn't going to stop anyone of course because rule one of real life. It ain't bad if it is you doing it.

        • Lets see, we have had two world wars both started by the germans.

          Are you saying that people that are alive today are responsible for something that most of them weren't even born at the time?

          With that thinking, I can blame you for slavery of blacks and the genocide of Indians in the 1800's!

          No sir. I refuse to take the responsiblity of a generation that I wasn't around to have my say in nor will I blame anyone.

          But you know what... Our generation is responsible for what is going on right now in the middle eas
    • Re:Hmm (Score:3, Insightful)

      by Kev_Stewart ( 737140 )
      If you'd spent any time in China you probably wouldn't say that. Or maybe YOU would.
    • by X.25 ( 255792 )
      Frankly, after the shootings the other day in China I wish we'd stop doing business with them. Our relationship with China is nothing to be proud of.

      After all the places US has bombed and all the destruction they've brought to many places, I wish we all stopped doing business with them.

      Anyone's relationship with US is nothing to be proud of.
    • What was these shootings about? I haven't seen/heard this on the news at all, but then I don't watch news a lot.
  • by vistic ( 556838 ) on Monday December 12, 2005 @07:47AM (#14237693)
    "Leading integrated circuit manufacturers, however, have avoided setting up fabrication facilities in China in order to protect their chip designs and manufacturing technology. This means that China is still heavily dependent on imports of advanced chips it needs to assemble electronic products. [...] Also, Tsinghua University has produced a microprocessor that matches Intel's Pentium II."

    Wow... a Pentium II? I suppose that's pretty advanced, but I honestly thought they would be able to produce something better on their own.
  • by sczimme ( 603413 ) on Monday December 12, 2005 @07:49AM (#14237705)

    From the article:

    Also, China's efforts to impose its own technology standards across a range of consumer products, including mobile phones, digital photography and wireless networks, are widely interpreted as a strategy to dominate the global market for information technology goods.

    That approach will probably serve them quite well within their own borders, but I don't see how they can hope to impose their own standards on the rest of the world. There are already standards (e.g. 3G) in place across the globe, accompanied by hardware produced by manufacturers in several countries. The Chinese standards would have to displace the incumbents (so to speak) and become widely adopted by those same former incumbents. It sounds like a very difficult - if not insurmountable - obstacle.

    • 1. Move your IP standard to match those in the US 2. Patent you new stuff based on your standards at home and abroad 3. Supply your new equipment at cost into new markets 4. Dominate the market 5. Up your prices fractionally 6. Profit until some other country does the same to you The US IP laws are really a rod for their own backs. IP people just don't seem to get that they can be totally out competed and then have their own IP laws used against them by foriegn companies to exclude them from their own dome
    • I think the idea that they are attempting to impose standards is misplaced. I suspect that their main motivation is the desire to have standards that don't involve royalty payments -- at least, not external ones. It's a massive drain on profitability to be paying per-unit license fees on all these things.

      Another thing to note about standards is that they are primarily a matter of ubiquity. You really don't have to care what encoding your digital mobile phone uses, or your video disc uses, etc., so long as

    • Sounds like they've simply taken a page from Microsoft's playbook.
    • That approach will probably serve them quite well within their own borders, but I don't see how they can hope to impose their own standards on the rest of the world. There are already standards (e.g. 3G) in place across the globe, accompanied by hardware produced by manufacturers in several countries.

      I work for one of the largest telecoms here in China (transplanted from Calif.), which is quietly picking up contract after contract in the 3rd world (and doing FCC testing now). Those numbers add up, and wh
  • Only the beginning (Score:5, Insightful)

    by Markvs ( 17298 ) on Monday December 12, 2005 @07:54AM (#14237718) Journal
    JP Morgan and some other firms are now outsourcing finance positions to India for the first time. If the US doesn't wake up and go for FAIR trade, FREE trade will cut all of our collective throats.
    • by Colin Smith ( 2679 ) on Monday December 12, 2005 @08:02AM (#14237743)
      What we have at the moment couldn't remotely be called free trade.

  • by Anonymous Coward on Monday December 12, 2005 @08:00AM (#14237735)
    From a manufacturing base with huge exports of cars, military goods, computers, electronics and so on, to a services based economy.

    Companies like GM, Ford, boeing are all being overtaken by European and Asian counterparts such as Airbus [], Mercedes (who of course, recently took over Chrysler), Toyota and so on. Traditional industrial areas such as Arms manufacturing have been undercut by the European weapons giants FN [] and Heckler and koch [], (the designers and makers of the next gen US army replacement rifle that will soon be replacing the M16.

    IBM going to China, Chrysler going to Germany, Ford and GM opening plants in Mexico and Canada. America does not actually make that much stuff anymore (Germany [] remains the number one exporter in the world with China a close second).

    But does that matter, is it no longer profitable for companies like IBM or GM to make product in America? Is the real money in IP, like with Microsoft, or with American Pharma giants like Pfizer? Or how does that explain companies like toyota opening up manufacturing plants in America? How does a service based economy provide the jobs necessary for 300 million people?
    • by CyricZ ( 887944 ) on Monday December 12, 2005 @08:11AM (#14237776)
      Ford and GM have had plants in Canada for decades. In fact, Ford is even closing some of their plants in Ontario. I have relatives over there who fear the effect that will have, considering the plants employ many people in their communities.

    • Airbus is only beating Boeing because they have government backing. Where Boeing Commerical Aircraft division has to fianace, get loans, and otherwise bet the company on new aircraft, Airbus just has to ask for government backed loans, program fails, no problem for Airbus. A program failing for Boeing could be the end of it's commerical division.

      Sure the government could bail Boeing out, but that may or may not happen and Boeing would have to fail to find out. Whereas Airbus, as a company, knows that they

  • Sadly, Lenovo now having IBM's computing line is making me look at ordering an old Thinkpad off Ebay rather than a brand-new shiny silver one (yes, they no longer come in just matte black, unfortunately)

    It's not because a Chinese company is building this computer line, and we've all heard the cliches and stereotypes of Asian-quality products so I won't go further into that. It's the fact that IBM gave all the work on their Thinkpads and Thinkcenters to someone else, period. I know it was part of their
    • by Chris Bradshaw ( 933608 ) on Monday December 12, 2005 @08:36AM (#14237888)
      They really weren't "selling out", Lenovo had the business all along, the products were just branded differently. I am an avid Thinkpad user (Linux support was and is killer). I just recieved my brand-new Thinkpad T43p in the mail from Lenovo, and I can honestly say that they have made significant improvments (quality wise) since the name change (since the T42 even). I currently own 4 thinkpads (two old x300's, a T23, and now a T43p) and I am really impressed with this particular model. I say they improved the T43 over the T42 by putting titanium composite on the bottom now along with the usual lid.

      I think Lenovo would be slaying the proverbial Golden Goose if they mucked with the formula. I hate to sound like a troll, but I can't stand by and watch my favorite laptop manufacturer get bashed for something they are not guilty of...

    • Your efforts are misplaced. The four year old Thinkpad next to me says 'Made in Greenock, Scotland', just 30 miles from where I live in fact.

      However, having worked for another laptop manufacturer here in Scotland, and having spoken to people at IBM, I can tell you that the devices are not 'made' where they say they are. The PCBs come from the far east, completely finished and tested. The casings are all moulded abroad. All that is 'made' here is that a line assembly worker takes a base, drops in a mainboa

  • Soon we will be their customer support function - 20 years, tops.
  • PATENTS & IP (Score:5, Insightful)

    by NigelJohnstone ( 242811 ) on Monday December 12, 2005 @08:10AM (#14237771)
    I guess giving patents to everyone for everything, lengthening copyright to forever and a day, and criminalizing minor infringements didn't work. Which is funny given that the proponents of this IP regime argue that this is what the USA can make money selling.

    Now if only the EU isn't so dumb as to fall for the same rubbish....
  • by dbleoslow ( 650429 ) on Monday December 12, 2005 @08:11AM (#14237775)
    When I was growing up in the 80's, there was a big anti-communist thing going on (Most notibly, the great war epic Red Dawn). There was also a big "buy American" movement due to a strong Japanese economy. Now we have a communist economic powerhouse and noone seems to be raising a stink. Why is that? My only thought on this is that with China, US executives are still making money. The Japanese kept everything from manufacturing to management in-house. China just does the manufacturing and leaves the US management to their big salaries. I think you will only see the "Made in China" issue come to the forefront when they start managing everything, thereby screwing the US upper management.
    • by antifoidulus ( 807088 ) on Monday December 12, 2005 @09:09AM (#14238089) Homepage Journal
      It's just scary to realize how similiar the Chinese economy is to the Japanese economy of 20 years ago, and how China is pretty much guarenteed to hit the wall within the next decade, just like Japan did. Remember, Japan started off the same way as China did, with a fixed currency, starting with the "low hanging fruit" so to speak of labor intensive manufacturing, had a central government that plays a huge role in the economy(Japan's government, at least pre-Koizumi, was democratic in name only pretty much), as well as growth that seems focused soley on exports and constructing stuff to export more. Hell, you even have at first a blatant disregard for the environment at first until some major events really wake you up(in Japan events like the mecury poisining in Kagoshima, in China the Haribin chemical spill). Hell, they even have the same demographic issues, China is just about 20 years later than Japan. However, Japan hit the wall when it turned out they couldn't export any more than they were already exporting. Now Japan is finally posting above 1% growth for the first time in about 15 years, but even then exports to places such as China play a large role. Japan's consumer spending is still depressed compared to places like the richer EU countries(everyone's spending is depressed compared to US consumers) I foresee China hitting such a wall as well. Already there are more factories than there is demand for their products, and signs of speculation are increasing rapidly.
      Of course the big difference is China has 10x the population and nukes....
      • It's just scary to realize how similiar the Chinese economy is to the Japanese economy of 20 years ago, and how China is pretty much guarenteed to hit the wall within the next decade, just like Japan did.

        Japan hit a wall mostly because it has only a limited workforce which is currently aging. That and it has to import all its raw materials.

        China does not have to worry about an aging or limited workforce nor does it have to worry about importing all of its raw materials (except for oil but we have the same r
        • Yes, but Japan has also had a very large influx of Japanese-speaking Koreans and Chinese over the past twenty years; there's a reason that Japan Town in San Fransisco has more signs in Korean than in Japanese.

          The Japanese 'labor shortage' was never a problem; what fucked the Japanese, as the parent poster noted, was that they lost their currency edge, and then the inefficency of Japanese business practices caught up with them. The yuan is currently at an 8:1 ratio with U.S. dollars, much the same as the Ye
      • by greg_barton ( 5551 ) * <greg_barton AT yahoo DOT com> on Monday December 12, 2005 @11:08AM (#14238935) Homepage Journal
        It's just scary to realize how similiar the Chinese economy is to the Japanese economy of 20 years ago, and how China is pretty much guarenteed to hit the wall within the next decade, just like Japan did.

        Yes, and the difference now is that the Chinese economy is propping up the American government, both by financing our massive debt/deficit and providing our consumer based economy with cheap goods, fueling our economy and tax base. What happens when the Chinese economy hits a wall and that support goes away, eh?
    • It's simple. The US economy is much worse now than it was in the 80's. Sure GDP and spending are up, but that's largely due to consumer spending on credit. Now people are stretched thin, and are only interested in buying as much cheap crap as possible, no matter where it came from. , so that they can keep up with the Joneses. I run an independent retail store, and I see this all of the time. People have, thanks to things like Wal-Mart and Froogle, etc. become real price whores, as I call them. They no
      • >>People just want their crap and they want it cheap.

        The internet has weakened the position of the retail store. Its easier to get things from anywhere. You used to be able to make a good living in mid level retail sales. (computers, photography) Customers can now get information from many sources and aren't dependent upon a salesman for buying advice.

        Don't blame your customers. They're only doing what is best for themselves.
    • Aside from conspiracy theories, the difference here is that stuff made in China is half the price of the other thing on the shelf, and Joe Walmart doesn't give a damn about his buddy's job if he can save that kind of money on his new Popeil Chicken Roaster. This isn't about a 10% savings for inferior goods.

      At the end of the day, making the same old computer here in the US shouldn't be interesting to us. There's not much money in it, even if your company does it exceptionally well. Literally anyone can do it
    • Now we have a communist economic powerhouse and noone seems to be raising a stink. Why is that?

      Might be that war we are involved in the middle east.
  • by bobdotorg ( 598873 ) on Monday December 12, 2005 @08:11AM (#14237777)
    I'm typing this on a 12" Apple PowerBook. Made in China. It's currently charging my 'Assembled in China' iPod. These would be tallied into the Chinese total, though they are clearly 'American' products and the bulk of their profits go to the (shareholders of the) American company.

    While the advances in the Chinese IT industry are nothing less than phenomenal, I suspect that it will be at least a few decades before The States is knocked from the #1 position in IT.

    In an oblique way, TFA says the same thing:

    It is foreigners who have driven much of the growth, with heavy investment from global giants like Intel, Nokia, Motorola, Microsoft and Cisco Systems. Figures from the Chinese Ministry of Commerce show that companies that had received overseas investment accounted for almost 90 percent of 2004 exports of high technology products.

    Oh yeah - and this OECD study only measures exports, not production. With Americans also leading the world in resource hoggery, American production may still lead Chinese production.
  • Wait, we were #1? (Score:4, Interesting)

    by Caspian ( 99221 ) on Monday December 12, 2005 @08:19AM (#14237804)
    I'm surprised we were even #1!

    I've NEVER seen ANY piece of computer equipment say "Made in the USA" in the past few years. In fact, I can't even recall any that said "Assembled in the USA". Ditto for Canada (our 51st state, eh?).

    Everything you buy seems to be made somewhere in Asia. Usually China, sometimes (for slightly higher-quality stuff) Taiwan, or (for the GOOD stuff) Japan. Occasionally Korea, Malaysia, etc.
    • by CyricZ ( 887944 ) on Monday December 12, 2005 @08:24AM (#14237829)
      The only reason America was better off the latter half of the 20th century was because it wasn't devastated by severe war during the first half.

      Remember, significant portions (including the populations) of France, Germany, the Netherlands and Belgium was destroyed twice during the first two world wars. The western Soviet Union took quite a beating, too. Of course, Greece, the Balkans, Eastern Europe, North Africa, Japan, China, Korea, and many Pacific islands were also quite devastated by conflict.

      It's no wonder that those who were able to progress, rather than rebuild, took the lead.

      • While it is true, the US was not devastated in WW II, your statement ignores significant other facts. Particularly, the US had a HUGE economic lead before WW II. Take a look at historical GDP/GNP data from around the world. I agree that WW II devastation helped the US maintain its lead, but it started with a big lead, and compared to many (most?) countries grows faster. For example, the US growth rate for the last decade or so has outstripped European growth rates.
    • It's hard to say where a product is "made" in anymore. In the US, it has to come from 70% US sources to be labeled "Made in the USA". There are still plenty of fabs in the US, but the product then goes to Malaysia and whatnot for final packaging(the most labor intensive part) so it will get labeled as "Made in Malaysia" when more accurately it should be labeled, "Made in Malaysia and USA"(and designed by Indians :P)
      • Even rules like that can be skirted around quite a bit. Sweatshops in Guam, the Marianas, or Saipan employ thousands of illegal Chinese immigrants, but they certainly produce garments that have "Made in USA" on it because they're still US territorial possessions.
  • subtle paranoia (Score:5, Insightful)

    by digitaldc ( 879047 ) * on Monday December 12, 2005 @08:26AM (#14237835)
    "China is quickly becoming an innovator and, as we know, it has the money to turn those ideas into weapons," he said.

    Why is it that commentators and news writers are always paranoid about China becoming a dangerous military superpower, yet apparently noone has a problem investing billions of dollars in the country as well as freely using their cheap labor to manufacture goods? Wal-Mart says about 60% of their goods are manufactured in China. Why all the paranoia if we are so willing and able to use them to make a profit?
    • Because China has a huge army of footsoldiers. If they didn't have the problem of transporting them, they could (and I dare say would) begin kicking our asses. Also, if they advance to the point where we are buying our weapons from them, we're screwed.
      • They could easily kick anyone's 'asses' right now. I am not sure who you are referring to. They can send waves and waves of military towards any target and I can't see how anyone could stop them. But I am not worrying too much about that right now.
        • Last I heard, the Chinese navy sucked. It's a little hard to kick ass while you're swimming. But, it's true that they don't have to worry about anyone conquering them.
  • well (Score:2, Interesting)

    by Dr Floppy ( 898439 )
    We still lead the world in developing new technology. And China has some serious growing problems that they wont be able to alleviate for many years. There is a serious inequality in the number of women for men, there are going to be a lot of lonely men in China. The gobi desert is growing rapidly in the western border of the country and the Chinese government is throwing billions to try and stop the spread. The US and our allies still hold the material cards, as China despite its vastness has to import
  • by EmagGeek ( 574360 ) <gterich@ao[ ]om ['l.c' in gap]> on Monday December 12, 2005 @09:00AM (#14238027) Journal
    I've read a lot of posts about how the US is becoming a services-based economy. I have news for you, the services are being offshored as well. I went to my doctor for my annual physical last month, and while there was a nurse in the office performing the physical, the doctor was on an LCD screen from his office in, you guessed it, India.

    Did you also know that there are law schools in India now that teach AMERICAN law and not Indian law? I'm guessing that paralegals and other support functions in Law will shortly be available for cheap offshoring.

    I used to think that Medicine and Law would be the last things to go, but it seems I was wrong about that. As I scramble to find a safer profession than Engineering, I'm not even sure where to go. I thought of teaching, and then realized that there are movements afoot to move this overseas, too, with a cheap security guard in the classroom to maintain order and a cheap teacher overseas in front of a camera.

    So, while it's not so untrue that America is becoming a services based economy, I think it would be more accurate to say that it is becoming an UNSKILLED or lesser-skilled services economy.
    • My 13 year old daughter asked what she should be when she grows up. I'm wondering whether or not I should even recommend that she goes to college. Maybe the thing to do would be to take half a dozen university classes, then drop out and start a business, maybe open a restaurant. A friend of mine has a son entering college now. He's going for engineering. My friend pleaded with him not to go into engineering, but he wouldn't listen. One one hand, I feel like we should be telling them to do what they en

    •   So, while it's not so untrue that America is becoming a services based economy, I think it would be more accurate to say that it is becoming an UNSKILLED or lesser-skilled services economy.
      ... and many of the jobs this lesser-skilled services economy produces seem to be going to Mexicans.
    • by vidarh ( 309115 ) <> on Monday December 12, 2005 @10:49AM (#14238812) Homepage Journal
      All of this is just temporary and here is why: Each time these countries start eating into a new segment of Western economies, they move towards equalising salary levels.

      Engineers in Bangalore for instance have seen their salaries skyrocket over the last 5 years, and as a result they are becoming less competitive and companies are increasingly looking at other parts of India to outsource to, and to cheaper countries.

      But it has also meant that many companies that might have considered offshoring at the prices 5 years ago don't see that high an incentive any more.

      Eventually there will be an equilibrium. These kinds of positions simply aren't comparable to minimum wage manufacturing jobs that require little to no training and can be done by anyone, and so they contribute to massively drive up salary levels in the areas companies outsource to.

      The trickle down effects may even get sufficient to start driving up overall prices in these countries - it certainly has driven up prices for housing for instance in many outsourcing hotspots.

      The net result is that while I can understand that some people are concerned for their jobs, this won't cause an implosion of the job market for engineers in industrialised countries - for that the cost of engineers in the main outsourcing locations is rising too fast, and most alternatives have "problems" such as lack of people with sufficient skills in English.

      Ultimately, for the right people this is also an opportunity: While the Indian software industry is still mostly offshoring based, for instance, the growing IT sector in India also means the opportunities for Indian based software houses are increasing. Ultimately we'll be seeing increasing amounts software exports from companies that will need people to work on site with customers in the west - there's always work that can't be done remotely.

  • by ErichTheRed ( 39327 ) on Monday December 12, 2005 @09:28AM (#14238227)
    The Chinese have a lot of advantages. The first is sheer numbers...a higher number of people can be educated and work in the technology field. All other offshoring destinations (India, etc.) have this same advantage. The second is control; the Chinese government can still crack down and force people to do things that may otherwise be unpopular. The Soviet Union was famous for this when they forced the industrialization of Russia in a very short period of time. The third is an educational advantage. The only way to get ahead in Chinese society is education, and it seems from the numbers that parents drum this into their kids' heads right from the start.

    I think that one of the things we could do to reverse the trend is to find a way to graduate more students in math/science/engineering. They're being scared off because they think that the only jobs left in this country will be in management. I can't say I blame them either.
    • Government control is no guarantee of long-term success. Soviet dictators turned Russia into a great power, but look at it now. China's iron hand can squash just as easy as it pushes. Frankly, I don't think China can maintain its current groth as a totalitarian country.
    • Dont forget that our entire society is setup to mock intelligence, and tries to teach children that intelligence/education are somehow "bad" .. kids hear jokes about school as if to suggest not being there is the desired state of being, and smart people are always portrayed as nerds with thick glasses while football stars are portrayed as heros of virtue (rather than rapists and drug abusers... ahem ...).... I was involved with schoolboard in my local town and while we have a great program for disadvantaged

You mean you didn't *know* she was off making lots of little phone companies?