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Buy Chinese Technology: Is it a Good or Bad Idea?

chinese technologyBuy Chinese technology: good or bad idea?

The Chinese economic boom of the last twenty five years or so has seen manufacturers beating a path to the Asian Tiger.

With huge tax breaks, cheap (most of the time) raw materials and commodities due to the Yuan being pegged to the US dollar, and an inexpensive, on tap labor force, the Chinese economy has ballooned at a virtual year on year rate of since 1994 to 2004 of an average above ten percent.

Due to the dollar issues and the subsequent near meltdown of the world banking system, the Chinese economy has cooled; certainly a year on year growth rate of above nine percent is unsustainable, as Japan will now verify, its economy in the doldrums with inflation issues just around the corner.

To buy Chinese technology, whether it is ancient or modern technology has certainly been good for the companies that invested there, but whether it has been good for China in the long term, it is difficult to tell.

Consumer goods such as TVs, personal MP3 players, DVD players, cameras and personal computers have been manufactured in such high volume, and sold at very low cost (comparatively) to the consumer all around the world, that one has to say that it has been, and still is, a good idea.

Looking at it from the perspective of western and eastern consumers, they have got what they wanted, cheap, easily obtainable products, as well as millions of Chinese workers having been hauled out of poverty, and into a modern twenty first century.

From the Chinese point of view, with economic downturn, many manufacturers are leaving China in their droves, as costs rise and returns fall.

Add to that the millions of Chinese workers that are now unemployed, with little state intervention to help, and corruption rife, and falling tax revenues (where it is collected) combined with social strife from very rapid upheaval of an ancient feudal system, and serious pollution issues, rapid growth and modern industrialization may, in hindsight, not have been the best idea.

Buying Chinese technology, is probably neither a good or bad idea. After all, it is not Chinese technology one is buying, it is technology, which for the most part has been imported and improved on over time, and re-packaged and sold on.

Whether it is industrial wind turbines, solar energy electricity generating plants, personal computers or smaller consumer goods, it is much like water. It will find the lowest level, accumulate there and remain, until it dries up, is used up, or the landscape changes.

Just as the economic situation across the world is fluid, so to is manufacturing. With industrial and commercial consumers, there will always be a market. Wherever there is a path lined with mass, cheap production facilities, the manufacturers travel it.

There is an old saying, “never keep your eggs in one basket”. Sadly, China and the world, now, more than ever is going to learn that lesson again.

Posted by on Aug 26 2010. Filed under Featured, Gadgets. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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