USAF-PLAAF engagement

PrOeLiTeZ said:

US knows that if they stop trade with China....US would hurt way more then China, China rich population is on the rise in record numbers so their own people can cover some of the trade loss, but US cannot as much.

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I know this isn't a trade forum, but aside from my flying for the USN my degrees are in economics with an emphasis on trade. In brief, the US economy is mostly insular, we buy what we make. Imports and exports, aside from oil, are a minor proportion of the US GDP, under 20%. The US will not suffer greatly from a trade disruption. Aside from this, everyone wants to sell to the US. Loosing one seller, even one like China is nothing, there are dozens of nations waiting for one of their competitors to trip up and hand them a market opening here. Despite the great size of the Chinese population, they do not command the purchasing power of the US economy, particularly if you examine individual purchasing power. At best a Chinese city dweller commands around $7000 per year in actual purchasing power measured in PPP's. Per-capita GDP is far less. This means the Chinese city dweller has command of purchasing power equal someone in the US with $7000 per year to spend. That is still a very low income that will not support a great deal of consumer spending. Actual per capital income is just over one grand. Not much money to buy things with.
Most Asian nations by comparison live and die by their ability to sell their manufactured goods abroad. Most do not have the sort of lavish consumer society seen in the US ( for better or worse and in my opinion mostly the latter ) so the claim that loosing the US market would hurt the US more than the exporter is simply not backed by any econometric study I have seen. In fact quite the opposite is true and it has been carefully modeled. Sorry for the economics digression but this is actually my first love aside from the military.

Cheers

The problem is that this great consumer society, about 60% is in debt and the rest has a very low savings rate. This is not to mention that for spending its dependent on that one Asian import---recycled US dollars as credit. As for US manufacturing, are you counting food and beer into that? You walk into a store, and just about everything that isn't a food product seems to be made somewhere else.

Lose one seller? It takes a great deal of time and investment to make the factories and plants to produce the certain items in that country, and you cannot transport those overnight. This is not to mention circumstances in many countries, corruption, political stability, cronyism, lack of domestic supplies, inefficient infrastructure, lack of trained population in manufacturing, for examples, conspire to make what they are producing uncompetitive to Producer A. One reason why China is so competitive is that much of the components you need to build something, lets say, a PC, can be obtained from domestic suppliers without the need for overseas freight. Another is that China has a superb infrastructure---communications, internet, road, air, shipping. Business is extremely selective on the environment it chooses to do business with. If you have an inefficient customs and port loading, and imported containers with materials and components are taking several days or even weeks of delays, that's going to impact the cost of doing business that will domino all the way to the final cost of the product.

Another factor is that multinationals already have massive plant and RD investments in China. You think Intel would just choose to build a plant anywhere?

And still another factor is that the Chinese PPP is still growing. A slowdown would be a mere 8 to 9%, which is at least 4x that of other countries growth rate. There is already a broad swath of the population---as big as the entire Japanese population---that is already reaching middle class levels.

The truth is China has many wealth individuals, the reason why its PPP is low is cause of its large population dragging the high income down. US has poor-mid-wealthy, China has very poor-poor-extremely wealthy. They're is a massive class difference with small mid class, the wealthy aren't just wealthy theyre extremely wealthy.

Fact is if US closes trade with China, China has lots of production lines within mainland from other countries. US looses its profits big time, and still owes China heaps of money if the trade closes or not. US economics had debated this for ages and China has too...China knows it'll loose some money but it will be able to sustain itself. China is growing double digits everyyear and it isnt neccesarly related to increase of US-Sino trade its from other countries growing interest with trading with China.

Overseas Engineer going to China get payed LOADS, something like US$85,000, what my uncle was payed. Also the China rich list in billionare and millionare grow dramatic everyyear, US has a stable rich list with the same people they're all the time. China had think was one year it had 1 billionare and the next year it had 20, lots not mention the millionares.

Looking at it China has becoming less and less Soviet era communism driven, so if world pushes China to hard they'll go back to Soviet era style, give time for China to grow since it only started decade ago.

One more economic digression. The interesting thing is the US produces just over 20% of all the world's manufactured goods. By that I mean things like airliners, oil drilling equipment, oil field support equipment, oil storagea and distribution equipment ( such as the loading equipment for tank trucks or railcars ), stationary gas turbine "peaker" generators ( check out Solar Turbines sometime, the global leader ), heavy machinery, conveyor belt and sortation equipment for distribution warehouses, medical equipment out the kazoo, lazer scanners as used for scanning barcodes in stores but more importantly for inventory purposes in big distribution systems ( Symbol Technologies in Moon Township Pennsylvania ), big transformers and switches used by electrical utilities, portable generators, farm machinery. These are all made in the US and most dominate their respective markets or are at least major competitors. No one builds more railroad locomotives than the US, and the big locos from General Electric are the most powerful ever made ( AC-6000CW at over 6200 hp ). They are used everywhere including China. This is big ticket stuff. You have to build thousands of computers to chalk up the same value on a nation's GDP as is earned by building one big locomotive or one complete peaker unit installed from Solar Turbines. How many cars does China have to make to match the value of a single Boeing 787? How many computers or big screen TV's? How many shirts in a textile factory. The stuff we import are the low value items who's manufacture does not support a high wage. The stuff we build here pays bank, and this is part of why the US GDP is so huge ( fully 30% of the global GDP folks ) and why the US is still the largest producer of manufactured goods by a very large margin. Our stuff doesn't show up in a computer or a TV, but is on the world's runways, oil drilling rigs and in the world power generating plants and bulk petroleum distribution facilties.
By the way, US is the low cost steel producer today ( yes, it is ) because US steel manufactures, after the shake out of the 1970's rebuilt with very efficient electric mills. Land in the US is a quarter the price of China, and electricity is also a fraction of the cost in China. A ton of rolled steel sells for $1000. Maybe $10 of that is labor. It's inisgnificant. Where US steel manufacturers have their advantage is in energy costs and their long standing agreements with their suppliers. Everything necessary to make steel is available in abundance in the Us. There is no shortage of iron ore or coal. US steel makers have long term fixed price contracts for these commodities. The US is not paying the sky high prices Chinese and Brazilian steel makers are for their ore or their coal. Right now, old line industries like mining and steel are outgrowing the US GDP by 2% annually. Are you amazed? The US economy is large and resilient.
Don't look now, but a recent LA Times article from last week reveals Chinese firms relocating to the US due to the lower land and energy costs. This isn't a big trend by any means, but it is a huge surprise to a Chinese businessman to discover how cheap it can be to make things here. Those factories can leave China for Indonesia or Vietnam ( and some companies are hedging their bets on China by moving a proportion of their production to other places ) just as quickly as they shut their US, European or Japanese plants to seek cheap wages and land in China.
The US still has a lot to offer the world economically, but you have to work in certain industries to see our wares.

A lot of the equipment you say are not 100% built in the US. More often you are seeing what is a global product, where the parts come from everywhere around the world. Boeing for example, now has engineers in Russia while getting parts from China and Japan. Everything from locomotives to cars to planes now require parts from all over the world, especially the electronics.

Big transformers and electrical infrastructure stuff made in the US are used in the US, but guess what not so much around the world where the Japanese, Korean, European and now increasingly Chinese stuff getting hold.

As for locomotives, that's a phase out industry and the Japanese and Europeans are holding the cards for fast monorail and bullet trains. China's Maglev is from Germany. I also don't see that strong a world market presence for US farm and heavy equipment where the Japanese and the Germans are pretty strong here, e.g. Komatsu. Another thing is, a lot of the US branded materials are US brands made in China.

GDP doesn't tell anything. You need to look at trade balances, surpluses, deficits, as well as savings rates. You can still have a high GDP but you're gradually being bled bone dry if you have deficits and debts.

I have not seen steel exported from the US for a while to Asian countries especially during the Asian building boom. The steel is coming from Taiwan, Korea, China and even Russia. Even steel from China is being imported into the US.

In Asia, prices of land are high but that's the consequence of having a high population and less land. That's not a sign of economic resilience or mismanagement but rather the basic situation that was given. Which is less land but got way too much money.

If Chinese firms are relocating to the US, they're buying US land, US factories and hiring US workers. That's good, but its also symbolic of the turnaround where China (and other countries) aer becoming the employers and Americans the employees. In other words, becoming more and more like the Third World.

Here is what you can do. Take a trip abroad. Go visit a massive construction site in Asia, be it in China, Taiwan, Korea, Malaysia, Philippines or Indonesia. Ask where they are getting the materials from. Look where the equipment and tools are coming from. Ask yourself what is the share the US is getting here.

Now we are all getting off track here even myself. We should concentrate nothing more than the original topic at hand.

"As for locomotives, that's a phase out industry "

How wrong you are. You are only talking about passenger trains, which are net well patronized in the US. I am talking about powerful freight locomotives. If you have not worked in the North American transportation industry or in the ports ( I have done both ) you might not be aware of the heavy lifting US and Canadian freight railroads do. A huge proportion of China's exports to Europe are unloaded at LA/Long Beach and Alameda and placed on double stack container trains for ports on the east and gulf costs where this freight is re-loaded on smaller container ships for European destinations. These railroads are the driving force behind the technological revolution in the diesel electric locomotive industry. US built locomotives dominate the market for these locomotives, and are the backbone of rail lines in Europe and Asia. China's new rail line is powered by GE locomotives that are the same basic power unit as powers Amtrack trains all over the US with a carbody designed for China. Rail roads in places like Mexico, Pakistan, Brazil, Australia and the UK rely on US locomotives for their power. These companies build specialized equipment for their overseas markets, example, locomotives for many Euorpean markets need to be rounded on top to clear European tunnels, and the hitches are different than those found in North America. They also have to be shorter for the tighter curves in Europe, restricting the power that can be sold there. A big AC6000CW is 85 feet long. Th
The technological revolution I referred to was the switch from DC to AC. First came AC alternators replacing the DC generators driven by the diesel engines that power the electric motors on each drive axle. Next came AC drive motors, which allowed the use of traction control coupled to electronic engine management of the engine ( incidentally this use of electronic controls preceded it's use in automobiles, the car industry in this case borrowed locomotive technology from the 1980's ). Switching from DC to AC gave existing locomotive engines 30% more tractive power. Finer engine control along with traction control allows the engine to be powered closer to destructive wheel spin than could be safely achieved with any form of DC control, plus AC is more efficient.
The next steps were individually steerable axles on the big three axle trucks, allowing longer locomotives to negotiate existing curves, and new engine technologies that allowed for 6000 hp class engines in a chassis no longer than the existing 4500 hp class diesels. All of this was paid for by US railroads who buy these new locomotives by the hundreds each year to replace older less efficient locomotives. These locomotives are highly regarded overseas and sustain a nice export industry for General Electric and GM Electromotive Division. No other nation makes comparable products.



Scroll through all the advanced electronics developed mainly by GE control the engine and other systems used on the latest locomotives. Most of the trick electronics we are seeing in new cars was developed by GE and GM for their big freight locomotives. Scroll through the choices.



Here is the site for GM/EMD Global



And GM?EMD China. Oh my, China has to rely on building US designs for their locomotives, and we make a nice profit off of this. Here is an example of US technology dominating a Chinese market simply because no one else does this better



The exact same locomotives you see on US freight lines every day.

Much the same is true of oil drilling and oil field support equipment. Mexico wishes it had US deep drilling technology, and the experience, to exploit it last reserves of oil. If it doesn't alter it's laws Mexico will run out of drillable oil in a decade. Both Iran and Venezuela have declining production in fields that could be revived by US water injection techniques. This technology is unavailable from other countries today. No, you are incorrect to assert that all of these products are simply US badged foreign products. Our actual industrial output statistics put the lie to that notion.

And you think China will continue to rely on importing locomotives?

Try linking with news events not company ads.



So although China is behind, its catching up.

China railway locomotive & rolling stock part manufacturing industry is currently in the period of technology upgrading. In case to improve the speed, the transition from DC drive to AC drive is required to complete in ten years ever since 2000. Two trains named Pioneer and China Star each set a record of 292km/h and 321.5km/h. Meanwhile, China is setting to develop the power scattered multiple unit with a speed of 330km/h.

China railway transportation will boost the demand for locomotive & rolling stock equipments. Now the manufacturing capacity of bogies on locomotive & rolling stock in China is 1300 units/year, which can basically satisfy the demand in domestic market with very limited export amount. With regard to the technical performance, manufacturing skill, quality control and product variety, China is still lagged behind the developed countries.

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And want to see where the Asian high speed rail market is going?

Si Fang builds license copies of Kawasaki and Bombardier products. Datong ABC is the Chinese arm of ABC Rail Products of Chicago Ill, a leading manufacturer of railroad products in the US but not a locomotive manufacturer. CSR Zhuzhou Electric Locomotive Research Institute is a joint venture with Siemens designing electric urban railroad stock, not heavy freight locomotives. Naturally the Europeans are at the forefront of this technology. Hangzhou Propulsion Center relies on German technology from Siemens, ThyssenKrupp and the German government to build Maglev trains. Again, absolutely zero about heavy diesel electric freight locomotives. From their website KTK Group builds German, Japanese and American designed electric trains, seats, interior fittings and controls, nothing related to freight railway equipment. CNR Tianjin Locomotive and Rolling Stock also makes bullet trains for passengers, not freight. Qiqihaer Locomotive Industry Co., Ltd is a subsidiary of China Northern locomotive & rolling stock industry (Group) Corporation (CNR) that does not even build locomotives but rather specialty rolling stock such as flat cars and certain hopper cars. I could not find a website for Zhuzhou Siwei Railway Products Co., Ltd. So far you haven't defended your assertion about Chinese railways. Yes they make lots of passenger stock base on foreign designs from companies that are joint ventures with European, Japanese and American makers of these systems but you have yet to show us an original Chinese freight locomotive, or any evidence that US freight locomotives are using large quantities of foreign components. Your argument has no support.

Let's get back to the original discussion, since trains have really nothing to do with the thread.