Outsourcing Gone Wild...

Is outsourcing getting out of control, or what? This is unbelievable...

New San Francisco bridge built in China to be shipped to US:

First, China made cut-price clothes and knick-knacks. Then it learned how to make mobile phones and iPads. Now it is making a 2,050ft-long bridge spanning the San Francisco bay.

Next month, four enormous steel skeletons, the last of the 12 segments of the bridge, will be shipped 6,500 miles from Shanghai to San Francisco before being assembled on site.

The bridge, which will connect San Francisco to Oakland on the other side of the bay, is a sign of how China has moved on from building roads and ports in Africa and the developing world and is now aggressively bidding for, and winning, major construction and engineering projects in the United States and Europe.

After building forests of skyscrapers in Beijing and Shanghai, showpiece buildings like the Bird's Nest stadium and the Guangzhou Opera House, and a high-speed rail network that is the envy of the world, Chinese construction companies are flush with cash and confidence. This week, Wen Jiabao, the Chinese premier, lobbied David Cameron to give the contract for the UK's new high speed rail link to a Chinese company.

According to Engineering News Record, five of the world's top 10 contractors, in terms of revenue, are now Chinese, with likes of China State Construction Engineering Group (CSCEC) overtaking established American giants like Bechtel.

CSCEC has already built seven schools in the US, apartment blocks in Washington DC and New York and is in the middle of building a 4,000-room casino in Atlantic City. In New York, it has won contracts to renovate the subway system, build a new metro platform near Yankee stadium, and refurbish the Alexander Hamilton Bridge over the Harlem river.

Source

 

You've merely provided an example of trade.

 

Well, NO!

It is an example of a prefab revolution. Never in history have so few built so much for so many but this is of another order of magnitude.

We always assumed that there would be certain location sensitive projects that simply could not be outsourced. Costs would just be too high, local expertise too necessary.

But boy were we wrong!

It won't be long before the USA has no doctors because Chinese firms can give virtual examinations to US patients from across the big pond and ship patients back and forth in shipping containers to get surgical treatment on the cheap, cheap, cheap in mainland China.

It won't be long before we contract out our defense, intelligence and even upper management positions to Chinese firms who can do it better and for less.

It won't be long before the entire globe's GDP is only 3% more than China's GDP. There won't be anything immune from outsourcing.

Or so trends suggest.

 

Standard mercantilist inspired 'the end is nigh' comment designed only to ignore the tremendous gains made available through trade

 

Hey look! A free market!

 

no, I was just blowing some hyperbole around the crazy assed statement that outsourcing our entire economy was good for us because we get cheap baby formula tainted with melamine in return.

 

and the yuan peg to the dollar is part of that free market how?

 

Have a look at imports as of % of GDP. Compare it to the Germans

 

I rest my case with my previous statement.

 

This isn't about America vs China, this is about a Chinese company being able to supply a service of a suitable quality and low enough price point to offset the cost and difficulty of building and shipping a bridge halfway across the world. A better service at a better price, that is as free market as it gets.

 

Except that the yuan peg to the dollar reduces the costs of the Chinese bridge by perhaps 15%.

That isn't a free market.

 

i hope they got a warranty on that.

 

That's what you are supposed to think this is. We don't outsource, we "trade". Unfortunately, it seems to be a one-way street.

 

Triffin Dilemma

 

That's obviously nonsense, with the increase in exports partially mimicking the increase in imports. The US does show a trading imbalance, but that reflects relatively low savings rates

 

I have always considered the "low savings rates" arguments BS.

Trade isn't driven by how much you save or how far into debt you go. Trade is driven by demand, globalization, reduced barriers to trade, international capital allocation imbalances and wage and resource price differentials across borders.

 

You'll have to dismiss the national income identity. Good luck with that!

 

I don't think I will:

 

[Y-T-C] (i.e. private saving) + [T-G] (i.e. public saving) + [M-X] (i.e. foreign saving) = I

That's all you need to refer to how US trade deficits reflect low private saving

i.e. X - M = S - I

 

(i still think it is bs! the trade deficit has nothing to do with that formula)

 

What you think is irrelevant here! That we can use it to demonstrate a trade imbalance is clear-cut. That we'd need to refer to comparative advantage and the intra-trade theories to understand how imports and exports evolve over time is a different aspect.

 

A bridge in the U.S. should be built by U.S. workers.

Countries could trade goods all day long, but infrastructure should stay at home.

 

It seems like a complete fabrication to me. A trade imbalance consists of an imbalance between imports and exports and nothing more. An accounts balance includes foreign investments.

I just can't subscribe to a formula for trade balance that includes a savings rate as a constituent of it's calculation.

 

Then you are indeed attacking the national income identity

 

So you're for regulating the market and for federal policy determining where products are bought.

It's funny how if you shake a free marketeer, you get industrial policy just like progressives have always proposed. Though I doubt this particular policy is a very good one.