commonwealth

it seems china only manufactures cheap clothes and plastic toys. and strangely the iphone as well.

slapphead_otool

That's a complex and confusing post Turban. Let me dissect it:

R&D: did you cover the japanese patent wars, or speed to market problems in your MBA, because I sure as hell did. Developing a product these days amounts to bugger all. It's reverse engineered and put on the market before the inventor has even sold the first sample. Look at the speed with which iPad clones arrived. As for pharmaceutical products, go take a look at Australian generic drugs. A close friend worked for a major player here in Sydney. It's all to easy to replicate pharmaceuticals......


Google Alphapharm and patent, and see how many court cases of patent infringement they have been involved in.

Chinese domestic demand. - aghhhh like the UK at the height of its industrial power? When shipyard workers were building the Titanic but couldn't afford to sail on it. Like the British car factories when the workers went to work on the bus because they couldn't afford a car? Don't fool yourself kid, the UK built its industrial empire on cheap labour and didn't give a flying fig about domestic demand. After the war, you could only get some metals for export. Export or die was the catch cry. Cars like the MK10 jaguar were designed and built for the american market. The guys building one had no chance of driving it.

Chinese revolt: to be honest I can't understand this bit at all. You seem to be saying the Chinese will revolt, but the reasoning seems hidden in undifferiented product pricing theory. Or something.

slapphead_otool

Hush your mouth for saying they make the iPhone. Everyone knows it is made by Pye in Cambridge...

Now hop on your bicycle, and ride off to the factory and do another 12 hour shift. Nelly will take your snap over around midnight. We need those ford Anglias churned out, and no sitting in one and dreaming of owning it. That's for the toffs and we can't afford petrol at 3s 6p a a gallon can we?

But if you are good we can walk down to the chip shop, and maybe this year we can go to Blackpool on the bus. Like we did last year. And the year before.

Welcome to the UK in 1963......

Turban Explorer

I really can't be bothered to even read that. You make unfounded assertion after assertion and it's late and I'm tired. The argument that the UK can only have a manufacturing sector by paying wages commensurate with China is obviously nuts - on that basis no one other than China would be producing a thing. Whilst it currently produces the mass of non differentiated products due to its communist economic policy that isn't a sustainable comparative advantage.

slapphead_otool

British wages fell by 3.5% last year.

http://www.guardian.co.uk/money/2011...-earnings-fall

Unfounded assertion, or fact?

Turban Explorer

Neither - a complete tangent.

slapphead_otool

http://news.bbc.co.uk/2/hi/7824291.stm

Britain competing against china:

12 hours a day.
7 days a week.
UKP3.5/hour

Dim sims anyone?

carling black label

slapphead_otool and Turban Explorer...........

You both make very good points......and neither are completely wrong.....But first, we the UK will never compete with Chindia et al, never, well not on a wage cost. So we will always import cheap tat, unless we can fully automate, but then high cost UK rents and taxes are killing business in the UK. So the UK is finding it very difficult to compete. Lets not forget, we can automate to a large extent, labour only plays a part in design and the fiddly assembly bits, which become to cumbersum to automate on assembly, like wings on a plane....But until the UK government reduce the high taxes (burden) on business, and commercial rents start to reflect value, then we the UK will never compete....not on small end cheap tat.....

The high end value stuff, has quite a political value, just look at JLR, Mr TaTa, very friendly with Cameron, influential even. This is where the UK's future is, the present government need to push this. Just look at Germany, a solid manufacturing/Engineering base of high end products. The UK should be on par, we have excellent engineers, its just governments are not interested in manufacturing, the last lot just pushed on services/finances etc, look where we are. We do not need to be able to afford a Bentley or a Airbus A380 or a Aston Martin, but we do need to export these high value products and steer the UK away from the huge burden of public sector employment, and the financial whizzkid sector.......It can be done....

From what i can see, as i have worked for a few of these companies, things are picking up, weak Sterling is helping, but also demand from overseas, the wealthy Asians and Americans.....But can it be sustained?

slapphead_otool

Carling,

I agree with you, and perhaps should restate my points in the interests of clarity.

I think the pound to AUD ( the subject of the thread) will remain low for the foreseeable future because the UK government need a weak pound to encourage exports. I also don't see anything on the horizon that is going to give markets the confidence to lift the rates.

Note - we are talking exports, not domestic consumption. Domestic consumption is only influenced by exchange rates to the extent that buyers have access to cheaper overseas made products when the pound is strong.

So a weak pound, which I am predicting will be around for some time, provides cheap exports and expensive imports. Which is good for the country, but not so good for the workers, who are stuck with local products, or high prices where there is no alternative.

In Manila the average worker earns about $20/week, and yet an apple laptop costs the same as here. What we regard as consumables are expensive luxuries.

This is back to the 1960's, with british workers producing goods for overseas purchasers, that they could not afford to buy themselves. This Is exactly want China is doing now. I doubt if many of the favcom workers can afford to buy apple products. So turban with all of her comments about china should really consider the impact of the UK going the same way. And indeed we DID have social unrest when the inequality of low paid workers producing expensive goods for overseas buyers became too offensive. We ended up with a three day week and massive strikes.

I don't mind a return to the 1960s, and some posters here are happy with the idea. But - they need to realize that a return to such concepts will mean that overseas holidays and imported goods will be prohibitively expensive. Indeed this is exactly what is happening now, with potential migrants giving up on the idea because they simply don't get a good exchange rate for the pound.

The other issue Is that manufacturing serves two purposes. It provides income for the nation, and it provides employment for its people. The automation suggestion doesn't help the latter. Automated hi tech pharmaceutical plants as suggested by Turban will be handicapped by the need to support large numbers of unemployed, or those in pseudo employment. This is achieved via taxation, which gets back to your point about UK businesses being over taxed to the point of making them uncompetitive.

Either way, to get back to the topic, the pound will almost certainly remain weak for a long time to come.

isgraham

Yes take Germany as an example of a high salary export manufacturing nation. If they can do it then so can we just need to find the products that will sell and make them better than anyone else.

quoll

Thank goodness, I just spent over £800 on my Aussie credit card for stuff to do our house here so the lower the better for me!

commonwealth

Good luck competing with Germany.

And don't forget the world's most innovative country (I dare say) - USA. compete with them as well. they invent the tech specs and put up plants in China.

Also Japan and Korea. they have similar level of GDPs per capita as UK's but they sell Toyotas, Sonys, Lexuses, Hyundais, LGs, Samsungs, Boeing plane parts, Kias, Mazdas.

Don't tell me they have low wages!

UK on the other hand is built upon the very strong foundations of HSBC, RBS, Lloyds, Barclays, Standard Chartered.

commonwealth

really??? what's your credit card number and expiry date, and the last 4 digits on the back?

Bermudashorts

Eh?

Dreamy

I don't have an MBA or even a degree... but at least I know how many 0s go after the comma in a number. So, did it cost you $30,000 or $300,000?

Is there a smug/pedantic smiley?

(At least it proves I read your posts!)