Is China following the Walmart model?

[unclebilly]

I think we’ve all heard (and possibly observed) the Walmart analogy where Walmart set up shop in a small town, local hardware stores, clothing stores, grocery stores can’t compete and go out of business. Walmart raises prices and town sorta dies...

Is low cost Chinese manufacturing doing this to the world?

With so many inexpensive consumer and commercial grade goods being manufactured in China, many traditional manufacturers can no longer compete and are losing market share or folding up shop.

Is this part of a greater scheme to create dependence on China for all global manufacturing at which point cheap Chinese goods won’t be so cheap anymore? At this point, it will be difficult to spool up local manufacturing again due to lost abilities.

What say the collective brain?

[Gretch]

the (pure) market dynamic is always fluid. political trends lengthen the sine wave

I would say your analogy is better aimed at what china is doing in africa........ china will own the economic reins to that continent, and it was ripe for the picking, since having become available subsequent to the white man's burden having turned to guilt.

Already well under way.

[ossiblue]

What you describe is not the Walmart model, it is the capitalism model. Unrestrained, theoretical capitalism seeks to achieve a monopoly by driving out competition, that is the ultimate goal. Think of the monopolistic empires built by Carnegie, Rockefeller, Vanderbilt, or more modern monopolies like AT&T (before the break up) and Microsoft. These companies didn't start out to be coercive or non-coercive monopolies, but each eventually used the tools of capitalism to achieve that end. It's good business.

China is simply doing the same, on a global scale, unrestrained, to a certain degree, because the checks on monopolistic abuses can only come from other nations' individual or collective trade regulations.

[Chocaholic]

Amazon.

[wdfifteen]

Originally Posted by ossiblue

What you describe is not the Walmart model, it is the capitalism model. Unrestrained, theoretical capitalism seeks to achieve a monopoly by driving out competition, that is the ultimate goal.

It's never stated up front though. We're told "Through competition, capitalism encourages innovation." It does, up to a point. Eventually it devolves into putting the competition out of business.

[Gretch]

Originally Posted by ossiblue

What you describe is not the Walmart model, it is the capitalism model. Unrestrained, theoretical capitalism seeks to achieve a monopoly by driving out competition, that is the ultimate goal. Think of the monopolistic empires built by Carnegie, Rockefeller, Vanderbilt, or more modern monopolies like AT&T (before the break up) and Microsoft. These companies didn't start out to be coercive or non-coercive monopolies, but each eventually used the tools of capitalism to achieve that end. It's good business.

China is simply doing the same, on a global scale, unrestrained, to a certain degree, because the checks on monopolistic abuses can only come from other nations' individual or collective trade regulations.

The difference between the examples you give and china is the chinese government funds its monopolistic ambitions with taxes, where as your examples had to depend on real business profits or ability to attract financing based on the soundness of the business model.

all powerful nation state (with laws, jails and guns) vs a shareholder owned corporation.

[Cajundaddy]

Markets will always change and evolve, they always have. As long as they are kept open and not restricted by government-favored monopolies, competition and innovation will still drive them. Build a better product or find a way to deliver a product faster and cheaper, and you will grow.

In a changing global market where USA union workers want $30/hr and Chinese workers want $3/hr there is a pretty strong tide in favor of Chinese manufacturing. The greater threat to free markets right now is the extensive data gathering by Amazon, Google, and FB which over time will serve to control our choices.

[sugarwood]

When exactly does the Walmart raises prices thing happen?
Haven't seen that in this lifetime.
Shirts are still like 4 bucks last time I went in to buy cheap as hell motor oil.

[LWJ]

When I left manufacturing in 2002, the cheap stuff and the super tech stuff were made in China. In the US? We made low margin, med quality stuff. All the margin was gone on volume or precision parts.

[wdfifteen]

Originally Posted by Gretch

The difference between the examples you give and china is the chinese government funds its monopolistic ambitions with taxes, where as your examples had to depend on real business profits or ability to attract financing based on the soundness of the business model.

all powerful nation state (with laws, jails and guns) vs a shareholder owned corporation.

I don't think the people who get put out of business care where the predator got its money. Getting backing from a government or other wealthy entity only accelerates the process of gaining a monopoly.

[wdfifteen]

Originally Posted by Cajundaddy

In a changing global market where USA union workers want $30/hr and Chinese workers want $3/hr there is a pretty strong tide in favor of Chinese manufacturing.

There is a great movie, “American Factory” that shows the difference in US workers and management and Chinese works and management. It won an Academy award and is available on Netflicks or Amazon.
Competing with China is going to be tough for a long time. Once a substantial middle class develops and people there demand better working conditions, fewer hours, more safety, and more autonomy things will begin to even out. I think people have a natural desire for freedom and autonomy and given the opportunity won’t live under oppression.

[908/930]

Hmmm, are you just noticing this now? Have you walked into a Canadian tire store and noticed anything in there not from China, I call it China tire now.

I was involved in different manufacturing over the years and I think that the lack of people caring about the product they put out is a large part of the problem in North Am, and wanting to get paid top dollar for doing less work, there was a strike in BC recently that lasted 9 months, and I bet the company is already looking for land to set up elsewhere.

[sammyg2]

Originally Posted by ossiblue

What you describe is not the Walmart model, it is the capitalism model. Unrestrained, theoretical capitalism seeks to achieve a monopoly by driving out competition, that is the ultimate goal. Think of the monopolistic empires built by Carnegie, Rockefeller, Vanderbilt, or more modern monopolies like AT&T (before the break up) and Microsoft. These companies didn't start out to be coercive or non-coercive monopolies, but each eventually used the tools of capitalism to achieve that end. It's good business.

China is simply doing the same, on a global scale, unrestrained, to a certain degree, because the checks on monopolistic abuses can only come from other nations' individual or collective trade regulations.

In pure capitalism, as soon as Walmart raises prices the competitors come out of the woodwork to compete, resulting in balance and equilibrium.
Supply and demand.
A monopoly is not possible in true capitalism, it happens when the rules are broken or manipulated.

[wdfifteen]

Originally Posted by sammyg2

A monopoly is not possible in true capitalism, it happens when the rules are broken or manipulated.

Pure capitalism has rules? Who enforces them?

[unclebilly]

American factory is a great Netflix movie and everyone should see it.

A guy who works for me moved to Canada about 15 years ago. Prior to this he worked for CNPC (Chinese National Petroleum Company) in China. He met his wife through a company memo where the single men were sent a list of the single women who also worked for CNPC. The city they worked at was a company town. When they got married, there were several other company weddings at the same time. The company then provided them with a larger apartment to live in. He talks of working 12-14 hours per day for years with no days off. He was / is an engineer.

He has one child (laws at the time) who happens to be a boy...