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[return to "China's manufacturers are going broke"]
1. lenerd+O7[view] [source] 2024-08-17 15:34:38
>>campus+(OP)
Well, if they want to learn from the US, they should ship their manufacturing capacity and intellectual property off to their geopolitical rival for short-term monetary gain.
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2. derefr+o9[view] [source] 2024-08-17 15:47:18
>>lenerd+O7
China was actually trying to heavily establish offshoring in the Philippines—but that has seemingly dried up with the increasing South China Sea tensions.
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3. fspeec+KX[view] [source] 2024-08-17 22:20:34
>>derefr+o9
I've never sensed any real desire for China to offshore to the Philippines, given its military alliance with the US. Maybe they dangle the prospect from time to time to try to pry the Philippines away. They have much friendlier targets in Southeast Asia, with Thailand and Malaysia at the top of the list.
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4. aragon+Sl1[view] [source] 2024-08-18 03:39:12
>>fspeec+KX
Not only that, but the Philippines has a tiny manufacturing sector compared to other major SEA economies. [1][2] I wonder if grandparent was thinking of a different country.

[1]

> In 2021, the economic mix of the Philippine economy was approximately 61% services, 17.6% manufacturing, and 10.1% agriculture. (https://www.trade.gov/country-commercial-guides/philippines-...)

[2] https://en.m.wikipedia.org/wiki/Call_center_industry_in_the_...

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5. derefr+Om2[view] [source] 2024-08-18 17:43:14
>>aragon+Sl1
> I wonder if grandparent was thinking of a different country

Nope! I was speaking of offshoring mostly in the services industry, not the manufacturing industry[1]. Things like call centers (as you linked.) Chinese companies like BBK use Philippines call centres to serve customers in English-language markets. Which isn't at-all uncommon—the US does the same thing—but China hadn't been doing much offshoring of any kind until the last decade, and the little they have done has focused almost solely onto the Philippines.

There's also something that you might not exactly call "offshoring", but it's a related idea. It's a combination of "exclave-building" and "foreign investment": Chinese companies responding to increasing levels of Chinese tourism in the Philippines by buying up Filipino companies (most visibly in the hospitality industry, but also everywhere from construction to finance) and modifying those companies to cater more to Chinese-audience interests; then, within China, promoting tourism to the Philippines — and specifically to those cities they've built up a presence within — to increase ROI on those investments. From a Filipino perspective, this was kind of a virtuous cycle, as it resulted in a lot of money being pumped into their economy. But this too has now sharply declined.

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[1] But why hasn't China begun to outsource manufacturing yet?

AFAIK, it's because the Chinese manufacturing sector has so much inertia — so much built up talent, so much invested CapEx, so many local partner relationships, so many achieved efficiencies of scale — that even if domestic labor prices seriously rise within China, it'll take a long time before companies are willing to bite the bullet and invest in moving any of that.

And it's also a bit of a chicken-and-egg problem: if you first offshore some middle step of manufacturing, the rest of the manufacturing process would still be cheapest for you [with your existing China-based processes] to continue to do in China; so now you'll have to ship raw goods out to the offshoring country, and then bring processed goods back into China for finishing. And during that, you'll be in competition with "full-pipeline Chinese" companies that aren't bothering to do that.

IMHO I'd mostly only expect China to offshore steps that either exist at the beginning or end of a manufacturing process. Especially origination of raw goods, e.g. mining. Which would seemingly be the long-term goal of China's infrastructure investments in various African countries.

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6. fspeec+iC3[view] [source] 2024-08-19 07:32:07
>>derefr+Om2
The English speaking call centers are probably better described as service imports than offshoring. There are no English speaking call centers based on the mainland to begin with. English speakers on the mainland would likely find much more lucrative opportunities than working in a call center.
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