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To: RealMuLan who wrote (53302)	9/13/2004 12:53:05 PM
From: elmatador	Read Replies (1) \| Respond to of 74559

Ford China eyes new Brazilian-designed Ford Fiesta sedan 10 Sep 2004 Source: just-auto.com editorial team Article Summary: Officials from Ford’s Chinese joint venture are said to be interested in selling Ford do Brasil's newly launched second generation Fiesta sedan line, the third model from its Amazon Project, a locally-developed range of models based on the European-designed Fiesta hatchback. just-auto.com As you can see Yiwu, once you graduate you become a platfomr to export. China should avoid Latin America's imports' substitutioon model. That was what sunk LATAM. fact-index.com Import substitution Import substitution is a trade and economic policy based on the premise that a developing country should attempt to substitute products which it imports (mostly finished goods) with locally produced substitutes. This usually involves high tariff barriers to protect local industries and hence import substitution policies run contrary to the concept of free trade. In addition import substitution typically advocates an overvalued currency to allow more easier purchase of foreign goods and capital controls. Import substitution policies were adopted by most nations in Latin America in the 1950s and 1960s. They were rejected by most nations in East Asia in the 1960s, and many economists attribute the superior performance of East Asia in the 1970s and 1980s to this difference in policies. Typically, import substitution policies would result in inefficient industries which created a drag on the economy. In addition the focus of import substitution in promoting industralization typically resulted in policies which benefited industrial workers at the expense of farmers which made up most of the population of the nations involved. For example to reduce the cost of industrialization, the cost of food was often fixed at an artificially low level. In addition the licensing schemes required for an import substitution strategy led also to rent seeking behaviors which increased economic inefficiency. As a result of the East Asian experience, import substitution policies generally became unpopular by the mid-1980s and was largely rejected by the Washington consensus. However many economists have pointed out that the failure of import substitution should not necessarily be taken as an endorsement of free trade. They note that most East Asian countries while rejecting import substitution also maintained high tariff barriers. The strategy followed by those countries was to focus industrialization on industries which would make goods for export. The focus on export markets allowed them to create competitive industries. By the end of the 1990's, the Washington consensus was being severely questioned. Nevertheless, there has not been a return to import substitution as a developmental strategy.

To: RealMuLan who wrote (53302)	9/13/2004 4:00:31 PM
From: energyplay	Read Replies (2) \| Respond to of 74559

If you look at the development of auto making in Korea, it took 20+ years. Are you asuming that China will develope every industry at the same rate ? No technology transfer to China - really ? Are you serious ? I'm sure many companies would like to reduce the rate of transfer, but many others are pretty happy to transfer. One of the bigger problems is knowledge walking out the door so next year you have 8 new Chinese competitors, 3 in Taiwan, and two in Malaysia. Tends to hurt profitablity for local and overwseas investors.... Are you talking about the hollowing out of the older state run industries ? Some of them were hollow to begin with...