[Shawn Miller] “how is it that an immature, unsophisticated country like China can maintain a 228 billion dollar trade deficit with the US?”
Interesting thread. All I know is what I read in the papers, but I would answer your question this way:
Pretend for a minute that you’re a young mechanical engineer with a cool new idea for manufacturing a product or a part for a product. If you’re in China, it’s easy: pay the right official, rent a building, hire the key employees, buy the machine tool, and hang a sign offering semi-skilled jobs. Within weeks, you’ll be manufacturing.
In the U.S.A., you’ll start by hiring a lawyer, an accountant, perhaps a consultant in compliance for your particular manufacturing process, and a bookkeeper. You’ll apply for permits, consulting regularly with the above experts to make sure you don’t violate some regulation.
And, some months later, just as you’re about to start manufacturing your product, you’ll see that somebody in China is offering it for half of your COST.
Distance a worry? No problem. It is probably about the same cost to send something (via container) from China to LA as from LA to Las Vegas.