Chinese firms bargain hunting in U.S.

[baldguy]

DONGGUAN, CHINA -- Liu Keli couldn't tell you much about South Carolina, not even where it is in the United States. It's as obscure to him as his home region, Shanxi province, is to most Americans.

But Liu is investing $10 million in the Palmetto State, building a printing-plate factory that will open this fall and hire 120 workers. His main aim is to tap the large American market, but when his finance staff penciled out the costs, he was stunned to learn how they compared with those in China.

Liu spent about $500,000 for seven acres in Spartanburg -- less than one-fourth what it would cost to buy the same amount of land in Dongguan, a city in southeast China where he runs three plants. U.S. electricity rates are about 75% lower, and in South Carolina, Liu doesn't have to put up with frequent blackouts.

About the only major thing that's more expensive in Spartanburg is labor. Liu is looking to offer $12 to $13 an hour there, versus about $2 an hour in Dongguan, not including room and board. But Liu expects to offset some of the higher labor costs with a payroll tax credit of $1,500 per employee from South Carolina.

"I was surprised," said the 63-year-old president of Shanxi Yuncheng Plate-Making Group. "The gap's not as large as I thought."

more:
http://www.latimes.com/news/nationworld/world/la-fi-chinainvest5-2008may05,0,2206623.story?page=1

Why can't American companies learn this simple lesson?

[LakeSamish706]

1. The thing I get out of this story is; We the Chinese now own most of the US...

Why the hell not purchase the remainder as it comes available? Just like the Japanese did a number of years ago!

[thunder rising]

2. The only reason we got to the moon was because rockets burn a LOT of fuel.

Otherwise that project would have died with JFK.

This is a answer to: Why can't American companies learn this simple lesson?
Which I answer with a question of my own: Why can't American companies build fuel efficient cars?

Which spawned the title line. (Just to map the connection for you) :evilgrin:

[Nickster]

3. And he'll create more American jobs than Dubya. Sad.

[Juche]

4. Its even worse now

With the Yuan increasing in value and the USD going down, China enacting labor & environmental laws that'll increase costs, the fact that wages are going up like 10-15% a year plus the higher cost of shipping items over the pacific ocean due to higher fuel costs the US is even more competitive with China now.

I don't know if that is good or bad, that the US is now competitive with China. On one hand it'll increase jobs here and is a sign China is becoming wealthy, on the other it just points to how desperate the US is getting that we can compete with an agrarian 3rd world country and China will lose alot of jobs.

I think outsourcing only saves about 10-15% when all the added expenses are added in like worse infrastructure, shipping, management and other expenses. And I think those stats are from 2005-ish when the USD was stronger against the rupee and the yuan. By now with the declining dollar, China's economy & wages growing by about 40% in the last 3 years, more labor & environmental standards in China and higher fuel prices outsourcing is probably something that breaks even at best.

Anyway, no idea what this will signify. Will the US start importing jobs from Europe & Asia instead of outsourcing to these places?