The rise of China Inc.
US manufacturers say Asian competitor has grown too big to ignore
By Charles Stein, Globe Staff, 8/19/2003
It is a long way from China to Hyannis, but not far enough for David Bourque.
His 20-person Hyannis company, Abco Tool & Die, has been losing jobs to competitors in China. On some projects, Bourque has submitted bids for $50,000 to make elaborate plastic molds for the optical industry. The bids from his Chinese rivals: as low as $5,000.
"My materials alone can cost me $20,000," said Bourque, the company's president. "You are talking about a huge difference."
In Clinton, about an hour from Boston, Nypro Inc., another plastics company, also has China on its mind. But for Nypro, China represents not a threat but a huge opportunity. Nypro makes plastic products for some of the world's biggest companies, and when one of those companies moves to China, Nypro moves with them. The firm has four factories in mainland China, and business is booming. "China has been our fastest-growing market," said Al Cotton, a Nypro spokesman.
For anyone who makes things for a living, China has become too big to ignore.
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"I'll sometimes quote a job in Philadelphia and lose out to a local company because my freight costs are higher," said Peters. Yet Peters' Chinese competitors are beating his price, even though they have to ship their goods all the way from China. "That doesn't make any sense," he said.
Willard Cutler said the cost differential between the two countries is simply too great to overcome. Cutler is treasurer of C&C Thermoforming, a small maker of plastic packaging in Palmer.
"These [Chinese] companies pay low wages. They don't pay for health insurance, workers' comp, or environmental regulations," said Cutler, whose business is down 60 percent in the past three years. Price competition explains some of the decline. The exodus of key customers explains the rest.
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boston.com
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These guys are ignorant about China. China is a poor country, and the wage is low and the labor has such a big surplus, but the consumption is also much lower than the US. And a lot of factories in China do pay for health insurance, because the health care in China is much much cheaper than here in the US (wonder why the medical doctors all over the world want to come to the US to practice??) |
