Addicted to the “Crack” of Chinese Manufacturing?

Have you ever taken drugs, Clark?

Of course not.

Let’s just say I’ve been a little racier than you have. I’ve never actually been addicted to anything, but I could easily have been. You take something because it’s fun, it feels good, it’s easily available, you don’t even realise you’re getting addicted, and before you know it you’re hooked. You’re at a house party at 5 am trying to make toast in the DVD player. Addiction happens easily, ridding yourself of it is hard.

We are all addicts.

Our entire economies are addicted. And this Coronavirus has shown us we need to free ourselves from the addiction.

China.

It happened so easily. 30 or 40 years ago, China appeared on the scene, offering to make stuff cheaply. It made it well too. Transportation was cheap. Manufacturers loved it because it brought costs down. Consumers loved it because it brought prices down.

You don’t get it, Clark. Pretty much every industry has outsourced some if not all of its manufacturing to China. It’s like 99% of goods pass through China at some stage in the supply chain.

OK. An extremely large number. I don’t know the exact percentage. I don’t think anybody does. But we are totally dependent on China. Cars, computers, consumer goods, chemicals, construction.

Electronics, pharmaceuticals, medical equipment, and supplies, shipbuilding, industrial robots, even bitcoin mining. All these industries and more made the same choices – get costs down by outsourcing to China. But now we are addicted, and, as this Coronavirus has shown, we need to rid ourselves of this addiction.

Haha. China was like a crack dealer giving us cheap drugs to get us hooked.

You’re turning a blind eye to what goes on there. China may be cheap, but it is not a good place to do business. Their reporting is fake – look at how they concealed the extent to which Coronavirus had spread.

If our government mis-states statistics, our media will take them to account. Chinese media doesn’t have that freedom. That misreporting led other governments in the world to react differently to the virus than they otherwise might have, and many have lost their lives as a result.

The rule of law is not the same there. You can’t trust them to keep their side of a bargain. Like a fortnight ago several hospitals in New York had contracts with Chinese companies for things like plastic gloves and masks, all of which were on their way, and the Chinese government said: “no, we need this stuff”. China then bans exporting masks and nationalizes an American factory that produces them there. Now America’s short of masks.

But they’re not reversed. Now China is starting to get business back to normal. Meanwhile we in the west have got the virus and our economy’s on the verge of depression.

Doesn’t matter. Their cultural need to save face causes no end of misery and mystery to us. It’s insane to rely on China for strategically important goods, now we know that when the chips are down they will do this kind of thing.

It’s such a shortsighted view. You’re not saving money. You think you are but you’re not. I know of instances where western businesses have had their IP pilfered by the Chinese. If you lose that, you’ve lost everything. If something goes wrong, you can’t sue. The Chinese are obsessed with saving face. It’s part of their culture. But there is no concept of loss of face to foreigners.

This Coronavirus is going to change the way we do business. I’m not saying globalisation is a bad thing. Of course, supply chains are going to be international. But be very wary about doing business in China, or even be dependant on any one nation for so much You won’t be dependant on one customer, nor should you be on one country – particularly where there is such a clash of business practices between ours and theirs. You might save money in the short term, but long term you will lose. There are many good alternatives, so think about them.

Well you could start with picking up a mild addiction to Canzuk

Not exactly, it is the theoretical and political union of Canada, Australia, New Zealand and the UK. The new Europe effectively, representing 7% of the world. Free movement of people and free trade, with countries which have common law, and even share the monarch and all their intelligence (5 eyes) already. In a post Brexit Britain – we think this is a blooming brilliant idea, and whole heartedly support it. Check out www.canzukinternational.com.

Yes, lets hope. Certainly we would say to anyone considering expanding their business who is currently based in any of those territories to think about doing business within countries with common law, and the commonwealth – you will know better where you are.

In city centres?

Yes, but then you might get clusters. Something like Leamington spa – which makes some of the worlds finest video games.

Yup. It’s clustered with video games geeks. That’s another thing!

Driverless cars.

They’re inevitable. And when they come, using the internet of things to communicate with other vehicles, traffic lights and navigation systems, they will deliver quicker, cheaper, crowd-free travel. Journey times will lessen and they’ll make migration away from cities all the more practical.

Even more ridiculous.

Not in city centres, no. There isn’t going to be much buying from overseas. Not much tourism. Things look grim for the theatre district and the entertainment industry. Central London has big problems.

But people moving from London to the regions should be good for the regions. This is another trend that was already in place – property prices in London had been lagging the rest of the UK since 2015, before Corona came.

Well you better enrol in that excel course then Clark – spit spot