Where will the next China be?

       Over the last days I have been meeting and talking with different company’s owners and directors about the Asian future. Most of them grew up in Taiwan but currently some are working in China or Japan. I have found they all agree that 20 years ago China was the easiest place to build a company because of the cheap labour; however, today things are changing and they are thinking about different alternatives to survive. Something that impacted me was that they all agree that the quality of manufacturing in China is very bad, so its paradise for manufacturing simple items. I also feel like they are waiting to see the end result of a long and slow process that has been destroying factories.

     So, what is the problem with China if it has the cheapest labour in the world? And a simple answer silenced the room “Now workers know how to enjoy life, they have money to spend”. One of the executive started to give examples, a few years ago workers came to work walking, and today they use motorcycles and some even cars. Now workers have money to spend, so defend their holidays because it is their time to enjoy with their families. One of the company owner in China said, we don’t give them weekends, but the increase of holidays and salaries is step by step killing us. One more time I ask, what do you mean with increasing of salaries? Well, he answered me, China’s government increases from 15% to 20 % the minimum salary each year, and we must comply with it. This year 2012, there will be a 15% increase due to the bad economy and in 2011 it was 22%. Another director said "People are changing, we don’t believe in the Chinese, they are different from heart and soul than the other Asian cultures". He explained to me that he supplied many Asian with electronic components and Chinese companies always pay late, which is very very different from Taiwanese and Japanese companies. The director continued arguing that his company  "only wants to sell regardless of the reputation they may obtain”. 

Chinese manufacturers have a mindset of “produce, produce, produce”; on the other hand, in Taiwan and Japan its “innovate, innovate, innovate so China cannot copy us”. They openly admitted to me. “For us its easy to make plastic toys, car sirens and that stuff, but it is costly to produce outside China, and for them it is difficult to codified our control alarms and systems”. One of the executives who is currently working in China told me, “one of us has to produce a lot to stay in the market and the other one has to create new ideas to be in the market”. Another question arose in my mind, when is the situation in China going to change and which country will be the next China? They said within 2 to 5 years yet the next country is hard to tell. One of them is  constantly checking India and Vietnam but the labor is not going to be as cheap,  so coming back to Taiwan is an option. The owner in Taiwan said “Once the salary in China equals Taiwan I will produce all their stuff while they sell their old factories and machinery”. One of the more quiet executives said “The economy is pretty bad and it’s going to be worsen year by year. China has to pass the ball and I cannot think of any country who could support such a large market, but at the same time the position that China is difficult to achieve, I mean, all the traders, suppliers, factories are already there. It’s simply easy to produce”.

The Chinese New Year will be this January 22^nd 2012, it will be an economically hard year all over the world. These owners came back to Taiwan to pass the celebration with their families. We exchange different points of views and ideas. I still have questions and I’m sure they do as well. “Crisis time is the time to make money”.

The Industrial Asia - Nijao ma?

Ma jen jao ( I'm good), New Tapei City:

Scrolls Industrial Plan

I'm in the middle of the industrial zone of Taipei City, the capital of Taiwan. This is almost my 5th day here and I'm learning a lot about manufacturing processes. Eaglemaster – C.L.Auto Metal Industrial CO (the company I'm interring) is one of the largest companies in the country producing alarms and sirens for cars, motorcycles and others. Regarding the manufacturing process, which is what I'm focusing on, some of the processes they delegate to other sub-companies and others they make on their own. Today Monday 9^th, I visited a plastic injection plant, a PCB plant, two insertion line plants for the PCB one for deep PCB and the other one for soling the PCB, then I visited a scrolls plant and finally at the end of the day I participated in a meeting at the offices for developing new products. Eaglemaster as any other company struggles to develop new products in order to fight against China because they copy their staff. They develop new strategies to make complicated the duplication of any remote control.

Different Directors and Managers of the PCB soling Plant

Taipei in general is a high developing country with less than 3% unemployment. A big difference than Mexicans in the US and Colombians in Venezuela, here philipinians work an average of 13 hours per day for $700 a month. On the other hand, in China employees work more hours for a $300 - $500 salary... that's pretty cheap. There is a lot of technology here and the US has a lot of influence. I mean, I  already found a Costco store, Ikea, and the even a 7 eleven. Of course that Japanese, Korean and Chinese restaurants are all over the place as well. People are very humble and handsome, I actually don't know how many tourists you actually see on the streets because I'm mainly inside the factories. Food is quite good, I like it. I have been learning some words in mandarin like: nijao ma? (how are you) ma jen jao (I'm good) or shenshe (thanks).

http://www.youtube.com/watch?v=9t7AiWfXAkI&feature=youtu.be 

PCB Industrial Plant

PCB deep line plant

PCB soling plant

PCB industrial plant

PCB before soling line

The plastic injection plant

Model for plastic rem`ote control

Various PCB

The scientist and his son

This is a story I heard a few years ago. It’s an excellent story and I think everyone can learn from it. I say this because years later I’m still learning from it.

In the basement of a humble home, a father worked on his new invention, he was a scientist. He was working relentlessly one day, when his youngest son came in to his laboratory with the hopes of helping his father with the new invention. His work was too complicated for the small child, and he didn’t want to be distracted and so he said to they boy “Come back tomorrow and we’ll see” thinking the boy would forget and allow him to work. Yet, they boy did not forget, and he came back the next day asking his father if he could help. The father was upset he was being distracted from his work, and he wanted to find something he could entertain the boy with. He tore off a page from a magazine that had a picture of the world; then he ripped it into hundreds of pieces, and handed them to his son along with some tape, “Now put it back together”. Only a few minutes later, the child came back with a perfect taped up picture of the world, and he handed it back to his father. His father was in awe, how could a small boy who doesn’t even know what the world looks like put together this picture in such a small amount of time? “Son, how did you do this?” he asked, and the boy answered, “Well, I turned all the pieces around and I saw it looked like the picture of a person, and I pieced back the person and when I turned it around I had the picture of the world”. The small boy knew what a person looked like, so by fixing the person first he was then able to fix the world.

We can reflect upon the message of this story, that in order to have a better world we must first become better people.

Foot Print: http://impactmediaworld.com/Clients.html