How to cope with decreasing of export/demand for chinese goods.

Roger604 said:

That's too simplistic, it's like a "first year economics" kind of view.

The real world is much more complex. From real world experience, developing countries CANNOT compete to create a brand unless they have some government help to give it a foothold in the domestic market.

All the name brands from Japan (and Korea) went down this road. They didn't just compete themselves into a market player from scratch. They had help along the way. Not only that, all the major corporations of Europe have shall we say strong government connections (Ahem Airbus Ahem).

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The structure of companies in Japan, Europe and now even in Korea is that these conglomerates (I hesitate calling them mere companies) are much bigger than the government in terms of financial power and influence. So as a result, its the government making to work for them because its the companies pulling the strings.

The reason why the free market model fails is because of imperfect information. Consumers do not have the time or inclination to try all possible choices before making the decision about the "best one". They just buy whatever they see on TV or other advertisements.

To build a developed economy you need people to BELIEVE in your country. Just like you can't start a small business unless you convince a loan officer that you can pay back a loan. You need government to encourage this TRUST in the economy.... otherwise slick foreign corporations will make sure they corner the market and not any domestic players.

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Frankly, I don't think propaganda helps encourage this trust on the economy. That's why the Chinese companies and the economy has to learn to earn the trust the hard way, and the only valid way. "Cheating" on that trust will hurt Chinese companies---and the government even more.

Let's say the PRC government helps advertise for Product A. Down the road, turns out that Product A is a dud or has serious defects. Who do you think whose image is going to hurt in that fiasco? If the PRC government's image got hurt from Product A fiasco, it will steam roller on the image of the other products, e.g. Product B, C, etc,. even if these products don't have issues.

The way the government helps the industry is by creating and mandating standards for the industry. It will hit the industry bottom line but it will force the industry to work harder to reach standards. Hence why standards that say "USDA approved", or "UL Approved" or "DOT approved" goes a long way in assuring consumer acceptance on products like meat, lighting and tires respectively.

The only role govt should take in regards to advertising is a regulatory role; leveling out the playing field for everybody and clamping down on false and/or misleading advertising.
Govt could also encourage their citizens to "buy local", but that's about as far as they should go in terms of trying to support their own country's companies. Domestic brands need to learn to stand on their own two feet, the sooner the better. Being exposed to competition is what sharpens their edge so that they not only can compete in domestic market, but in international market as well.

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Antimater let me get this straight you want Chinese to buy Chinese made goods regardless of quality cause of patriotism.government of china should help out the local business.


yet at the same time you want export to increase cause all other countries should buy Chinese goods only.cause that will benefit china only.

but at the same time you question why American government moved in to help out to local banks that hold almost 90% of the mortgage's in USA. :roll:

I want the chinese government actively support the strategic industries.
I don't care for toys , foods, clothes, and shoes.

I want the government to mandate all academics and government institutions to buy Loogson, godson based system running on Linux, getting rid of windows. So, all the chinese students will know more about linux.

Government would mandate loogson makers with SMIC to manufacturing the chips using 90nm or below. RIght now, Loogson farm it out to STsemiconductor for manufacturing.

The form another JV with Applied Material to make equipments available to universities for R&D research.

If all schools and government using Loogson based processors can you imagine the volume, quite a bit .. This would definitely boost CHina's processor making ability and semiconductor in general.

Also, let's face it, it's not just quality and excellence issue. Even if China can make equal in quality in products, they will never fully accepted in the western world. Why, too long history of China Bashing has created China as a PC incorrect term as producer of high valued items. For example, I just don't see CHina made cars as mainstream luxury cars in the future in the western world.

Therefore Chinese government has to promote the locally made high valued items even if they are only for in the domestic market or the developing world.

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kliu0 said:

Thats true, for example: I've read so many articles on Lenovo, which is trying to change its image of a cheap low-end pc manufacturer to a more diverse and quality pc manufacturer. However it is still struggling as the government has failed to promote the new generation of Chinese products as more higher quality. I think the government is still trying to promote itself as a low-medium economy so it can attract more investment, but times have changed. The government should still promote the use of a large labour intensive economy, but additionally change some policies to promote improvements into a more mainstream economy that produces more middle ranged items, eventually leading to higher luxury goods and services. But as you said, the media and worldwide governments still China bash here and there. Right now the present problem is quality control, if they can get past that, they should be on the road to producing more higher value goods and services.

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What do you mean low end pc manufactuer? All the units acquired from IBM still there. The former Workers in US former IBM R&D divison still working for Lenovo. Lenovo has alot more American workers and is more international standard type of companies than say Acer.

Also don't think taiwan is doing real innovation and creation. It's just high tech manufacturing, like UMC, TSMC, fab house for someone else's logic chips. Nanya, PSC, manufacturing memory chips but getting technology elsewhere. Acer and system house for PC and notebook.

Taiwan is paying arms and legs for those expensive fab equipments.

I am suggesting , unlike taiwan, China going the other route, forming JV with Applied material and therfore capable of making their own equipments. For expensive fab, 90% cost is due expensive equipments.

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I still think a big portion of that is not quality issue,but a political issue.
Even if chinese quality is good enough, they will still get bashed around.