Greg,
I enjoyed this piece, however in the long term our future is looking rosy.

From March this year we will see labour costs begin to fall, thus over a 10 year period, we should have the comtetitive edge over the Chinese. If we cannot get our labour costs down to 1/2 a bowl of rice by 2016, Workchoices [no choice] will have been a failure.

Provided the rich continue to become richer, and the poor continue to welcome more and more to their situation, our economic outlook long term will stand us in good stead. We need a good ecomony to continue to provide jobs with starvation wages for the employees of this great country, not to mention the bank balances of the wealthy.

I have overwhelming confidence in our country and it's Government, to provide these things, and I would go so far as to predict that by 2016 we will see that Kraft factory returned to our shore by it's American owners. Prosperity for all [except the low wage earners, pensioners, and their depedents]and to all a good afternoon.

'Australia’s manufacturing sector...received about $6 billion in Federal Government assistance ' that sounds like welfare !

Having said that, given that the wages in places like China, Fiji, Vietnam etc are less that Aust then of course manufacturing will go offshore.

What can we do? Like me, we need to reskill and look for another job.

Shonga, did I notice a touch of sarcasm? I like your style.
I do like my vegemite every morning, I guess I will just have to make my own !

I don't blame alot of manufacturers if they go offshore. Wages are an issue only in some industries. Consumers are the first to benefit from cheaper clothing, powertools etc, which is what China is good at.

The Govt might dish out subsidies to some, but various State, local and Federal Departments overwhelm most businesses, with massive red tape, unlimited rules and regulations, and a whole lot of Hitler like bureaucrats who want to throw their weight around.

As the previous owner of an award winning Export business, I eventually got so sick of all these guys that I sold the business
and if the Aussie $ should ever crash in value, let the bureaucrats figure out what to do about it. It wasn't wages that were the problem, but the attitude of a whole host of Govt depts.

at LAST Greg Barns writes something which makes sense !

"gradual global shift of manufacturing production to low-cost countries, including China", will continue to place competitive pressures on parts of Australian manufacturing"

Err... no, it will just KILL IT.

"China is Australia's second largest export market and the revaluation of the renminbi (yuan) will make Australian exports cheaper, having a positive impact especially on resources and agriculture products".

AND THIS... is why there is little sympathy from Mark (the Cocky and Miners mate) Vaile and company for small and medium manufacturers !
Politics is about POWER.. and you just have to ask 'Who Benefits' from the current power status quo.. "Resources" and "Agriculture"

Manufacturing? nope...

I hear a mild bleat of encouragement in the possible revaluation of the chinese currency. HAH ! as IF the Chinese will commit economic suicide (as we are)

The scary part in all this, is that you can just add the following to our already overburdened social welfare bill....

Aging Population+Unemployed(and unreskillable) ex manufacturing workforce + Artificial Labor rates in China = BIG and unlikely survivable problem.

If manufacturing was just 1% of our economy it would not matter but its more like 28 % !

The French might be wierd in some ways but boy oh boy, their tenacity and activism in retaining small farm holdings is admirable (even though they rely on big subsidies)

The day we allow all our manufacturing and engineering skills to die as they pass to China is the day we cease to texist as a nation. We will just be a farming and mining backwater with an elite and prosperous few, dwelling in high security compounds to keep the rest of us hungry ferals OUT.

With some planning and foresight and a global approach coupled with automation and innovation, we can compete. But who is going to drive that agenda when its easier to just dig stuff out of the ground and shear a few sheep and pack a few moo cows off in ships.. don't even need abbotoirs. (or their workers)

Coyote -re-skilling in tourism? :)

China has just overtaken the UK to become the world's fourth largest economy at around 2.14 trillion dollars, and has an estimated population of 1,307,728,458 (http://www.cpirc.org.cn/en/eindex.htm). According to my ancient Casio, this represents a GDP per capita of $1,636.

We on the other hand share a GDP of $860bn or so between 20,460,603 people, a GDP per head some 25 times higher.

This is bound to create some interesting situations. We know from the examples of the post-war economies of Germany and Japan that the path is to first use people to create cheap articles for world consumption, move up the "food chain" to the efficient production of quality high-value/high-tech goods, before maturing into a balance of services and high-capital-investment products.

China has already exported significant financial stability to us and to European countries in the form of cheap goods - textiles, white goods, electrical appliances - which we happily absorb into our shopping baskets in the form of low price-inflation. It is a perfectly natural act, to choose goods that meet your budget without more than a cursory glance at the label. Without them, we would be paying higher prices, our wages wouldn't stretch so far, and we'd re-introduce the sort of wage and price inflation that terrorized previous decades.

The next phases will create both demand, in the form of skills as well as raw materials, and massive supply of every conceivable manufactured item.

There is an inexorability about this process that takes a little patience to understand. But the question cannot be "how do we avoid exporting the vast majority of our manufacturing capability?", but "how should we adapt ourselves to it?" Regrettably, our normal response is to pretend it isn't happening, and then blame the government when it does.

We should work out what it might be that the Chinese market is going to need, and then gear ourselves up to provide it. That is the normal reaction of a mature an intelligent economy that doesn't believe the world owes it a living.

Pericles,

For once I agree with every word you said.

As Mark Vaille said "China is Australia's second largest export market and the revaluation of the renminbi (yuan) will make Australian exports cheaper, having a positive impact especially on resources and agriculture products".

Lets face it Australia is a resources and agriculture super power, why do you think the Govt. is trying to reduce subsidies to inefficient EU farmers. (I am an ex member of the Labor Party and a vehement critic of the Howard Govt. but on this they are really pushing a very difficult issue).

Lets stick to what we are good at, digging up stuff, and growing stuff. To pretend otherwise is silly.

A friend of mine (hey Trixie) works in the manufacturing industry. He loves this song. The drop Kick Murphy's version though.

Worker's Song (Handful Of Earth)
by Ed Pickford
© MCPS

Come all you workers who toil night and day
By hand and by brain to earn your pay
Who for centuries long past for no more than your bread
Have bled for your country and counted your dead

Aye, the factories and mills
The shipyards and mines
We've oft been told to keep up with the times
But our skills are not needed now for they've streamlined the job
With lawyers and computers our lives they'll rob

Ah but when the sky darkens and the prospect is war
They'll give us a gun and push us to the fore
And expect us to die for the land of our birth
Although we never owned one handful of earth

We're the first ones to starve, the first ones to die
The first ones in line for that pie in the sky
And we're always the last when the cream is shared out
For the workers working when the fat cat's about

Now for all these things that the worker has done
From tilling the fields to carrying the gun
He's been yoked to the plow since time first begun
And I'm afraid I'm afraid the race is not run

For when the sky darkens and the prospect is war
They'll give him a gun and push him to the fore
And expect him to die for the land of his birth
Although he never owned one handful of earth
Although he never owned one handful of earth
Although he never owned one handful of earth
Although he never owned one handful of earth

Wonder why? (A future)

I say to you - what about our Australian workers' culture? What about Auustralia's small business culture? We do what ever other importers want to cater to their cultural needs. But what about ours?

Unionists, workers and sensible bossses have fought hard to ensure our culture of a fair go in relation to working conditons and pay is sustained.

So lets be proud of our culture. Lets do unto them as they do to us in relation to culure and insist that they pay their workers decent wages and insist on proper working conditions - otherwise no import (stick it up your jumper with all your ill-gotten gains China boss and "Aussie" importer) or stick a heavy tarriff on the imported product that equates to that that is ripped off the Chinese worker.

While you're at it, let's make all these big share bludgers get off their bums and earn their own wage instead of dipping into the hard-earned pay packets of honest men and women.

I want to see a future written on the faces of my friends - on the face of my country. (Dreadlocks)

Well finally Greg has written something with substance.Within ten yrs nothing of consequence will be made here.

China is smart ,hungry,and keen to learn.They are not shackled with taxes for social security,fear of litigation or stupid Govt bureaucracy.If we think we are the servants of the US now,China will totally enslave us with their cheap labour and guile.China's social security is the strength of their family unit.Our strength is the taxing the incentive out of life to pay people not to work.

China's will and intent to achieve is unrelenting and we are consumed with a hedonistic lifestyle that is both decadent in work ethic and national solidarity.

Already custom made items are being made there and as their knowledge of quality improves,so will or industry diminish.

The Balance of Payments will continue to soar and our Govts just tinker with the edges in the hope of, "She'll be right mate."

So if China goes to war with us in the future,can we sheepishly ask for bullets to defend ourselves?

Pericles- well written and informed post! BD- your post was a bit like religion, lots of dreamer stuff, but not very logical :)

Fact is even right now, abbatoirs in WA simply can't find staff, so export orders are being lost. Aussies can choose to not take jobs like that, which are not the most pleasant. So your theory of all these Aussies wanting to work on Aussie production lines are wrong.

Hey leave farming and mining alone, they are two industries which have shown that they can be internationally competitive. Doing a France economically speaking, is bound to fail. For all those costs to do that, are then burdend on the efficient, making them less efficient and less likely to be competitive. Its already the case.
State Govts are free to cut payroll tax on export industries if they wish, none have done so. So Govts tax exports, rather then assist them.

The sensible thing to do is what Pericles suggests, also concentrate
on innovation and leave the large scale mass manufacture to the Chinese. After all the biggest beneficiaries of cheaper shoes,
cheaper clothes, cheaper all sorts of things, are in fact the poor.

Yup the world is changing, get used to it. The most permanent thing in life is change.

The Chinese move into Australian markets is more of a cancer than a tsunami.
In the Electrical Appliance industry all the major manufactures Sunbeam, Philips, Breville, Electrolux have gone off shore. They are under pressure from consumers for a cheaper product and from shareholders to maintain a profit.
The double edge of the going off shore is that all the support industries are disappearing as well. With Off Shore product cheaper than cost of Australian Wages many service companies are closing because it is no longer viable to repair Off Shore Product. Who wants to pay $150- to repair a VCR that you can buy a brand name VCR ex-China for $98-.
In Adelaide our local economy relies heavily on manufactures such as Electrolux. I can see a time in the not distant future with the bosses at Electrolux in Sweden start to wonder if its worth keeping the factories open in Adelaide to produce product to complete against $200- Washing Machines from China. Already we are seeing traditional small and medium furniture manufacturing businesses winding up because they cant get their product into the big stores because the National Chain Buyers only want the high profit bulk Asian Product.
The question is when all the factories are closed and all the tech schools who support the factories close who will buy the goods? And will we be passing on to our grandchildren a massive balance of payment debt that sucks up our GDP trying to service it?

Dear Yabby
the only kind of person who would write like that is one who can (Like King Hezekiah when told by Isaiah the prophet that he had screwed up big time, but that the disaster won't happen in HIS lifetime) say "I'm alright Jack, won't effect me".

In fact do I recall correctly you sold your award winning export company ? and are probably sitting quite pretty at the moment.

The point you missed is this... The chinese will not stop with 'large scale low cost consumer' manufacturing, they are continually upping their quality and the tech level of all they do. So, contrary to the government mantra of "We have to go 'value added'" THEY are going 'value added' and in time, (Just like the frog in the beaker of slowly warmed water) it will kill us.

Do you REALLY believe we can continually dig stuff out of the ground ? (it does have finite limits) or alternatively, how many FARMERS can we have in this country ?
Then,WHAT will become of the large numbers of unskilled manufacturing workers who are now out of a job and at a loose end. ?

Now Pericles is always berating me for being a 'would be follower of a Tryant' but I suggest, the TYRANT of whom he speaks (Who I have no interest in following) is the one who will take advantage of the widespread social disconent of THOSE very unemployed workers, and it could conceivably lead to very ugly social disruption. (soft speak for revolution)

Your comment "The world is changing, get used to it" is a bit lame :) sounds like you are one of the group who just look around 'wondering' what happened rather than MAKING it happen.

To be honest, I have about zero faith in our 'political nobility' to do something, Nobles have never looked after anyone but themselves. We will be sold out no matter what. -me ? My citizenship is not of this world :)
But I would rather at least SPEAK on behalf of those who probably have little hope.

From Australia's point of view things look reasonably rosy at the moment as the demand for our resources could continue growing at least in the medium term as the 'BRIC' economies expand. However, I don't know if this can sustain us all in the manner to which we have become accustomed, and what happens when the cycle turns down? Theory tells us that we will enter more high productivity activities to replace the less skilled jobs being lost to the Chinese etc. The trouble is education has gone global too and we are already seeing IT jobs migrating to Asia. The main way of addressing this will be investing in people but whether we have the ability and desire to do this well enough is probably outside the scope of this debate.

Judging by the poor quality of all this mass produced product from China there will always be jobs in waste processing. As Trev said it is no longer worth repairing anything. Perhaps there should be a requirement for longer warranty periods and for manufacturers to be responsible for recycling their products. This would improve Australian competitiveness and do something about the vast amounts of waste and environmental damage we are producing.

"My citizenship is not of this world :)"
All ways thought you were off the planet DB....

If Aussies wish to stop this trend it is easy just don't buy stuff that is made else were. Lets turn back the clock and make out it's 1950. Globalization is the future and the key to world peace to boot.

Greg, in 1985 I assisted the Ministerial Committee on Longer-term Economic Growth, chaired by Senator Button. On border protection, the economists advising the committee strongly advocated a “tops-down” approach, whereby reductions in tariffs, quotas and other trade barriers would focus initally on the most highly protected sectors such as passenger motor vehicles and textiles, clothing and footwear. The rationale was not only that these sectors had the greatest distortions, with higher returns than unprotected industries helping them to attract an excessive share of investment to fundamentally non-viable actitivities. It was also that the benefits from that reform would be large and widespread across the community, helping to ensure support for other necessary reforms. Also, concentrating the pain would make it possible to have highly-focussed assistance packages for those workers adversely affected.

In practice, the reverse approach was pursued, with continued protection and subsidies for PMV and TCF which mean that 20 years on the industries are still operating at non-viable levels and subject to further rationalisation. By contrast, non-assisted industries exposed to competition at home and abroad have lifted their game, as witnessed by those increased exports to China.

The PMV industry has never been big enough to support more than two viable manufacturers. Anyone “licking their collective lips at the prospect of exporting cars and auto parts to China” must be completely unaware of the rapid erosion of domestic market share for PMVs and parts, the vast expansion of production in China and elsewhere, exacerbating existing over-supply of capacity, and the dire straits of GM and Ford in their home market.

If PMV support had been withdrawn, it is likely that we would now have two viable manufacturers rather than four small players focussed on the slowest-growing segment of the market. The advent of China as a major manufacturer has greatly boosted our standard of living, but it won’t provide an escape roue for Australian firms which can’t compete on a non-assisted basis.

What is it about this that is difficult to understand? In a free economy, consumers will choose the products that best meet their needs for price and quality. Over the next fifty years, China will become the world's factory. It started in T-shirts, but has already spread. Read the words of ANZ's guru again.

“...for all the public attention devoted this year to China’s exports of textiles, ... their share of total exports has fallen from nearly 24 per cent in 1997 to 15 per cent in 2004 and to less than 14 per cent in the first four months of 2005.”

Trev opined that "The Chinese move into Australian markets is more of a cancer than a tsunami."

It is neither, simply a fact of business life that goods are made more cheaply in China than in Adelaide.

Boaz, to accuse Yabby of being "one of the group who just look around 'wondering' what happened rather than MAKING it happen.." is just plain silly. We are talking inevitability here, not personal choice. We may simply "love" to go on building expensive stuff, but the fact is, in a free economy, no-one will buy it.

(By the way, BD, raising the spectre of "the TYRANT .. who will take advantage of the widespread social disconent ... and it could conceivably lead to very ugly social disruption" is exactly the kind of inflammatory interjection that annoys.)

Sajo, don't kid yourself. "Judging by the poor quality of all this mass produced product from China there will always be jobs in waste processing" is a head-in-the-sand comment.

Immediately after WWII, the two countries most renowned for producing crap product for European markets were West Germany and Japan. Within a couple of decades they were teaching the rest of the world about quality, including the Americans (whose national car industry collapsed under the weight of competition, and hasn't recovered).

Manufacturing isn't everything. There will be other opportunities to make a living, but they are just not staring us in the face right now. But as one door closes, another will surely open.

David, sheesh you really should put down that bible and perhaps subscribe to the Economist, for all emotion and lack of reason is downright dangerous :)

As a matter of interest, I am one of those who makes it happen, by innovation. I used to compete with the Chinese and we won on quality.
Do you realise that the fastest growing market for Hermes 5000$ handbags and Rolex 10k$ watches is actually China!

Back to economics in 350 words. In West Australia, hardly a day goes past where some other resource project worth billions, is not announced. They are screaming for staff. Your workers might just have to think about relocating to where all the action is, not expect a job 5 minutes from home.

Iron ore reserves are said to last 500 years, so its a bit early to panic just yet. The world is in fact changing so fast, that 10 years ago, when as the first around here I went on the internet, nobody else could see the potential of it. Telecom charged 5$ an hour for access, later increased to 9$ an hour. When I protested to my local MP, he first had to find out what the internet was. Look at the jobs created by the internet now, just a few years later.

David you admit to not being part of this world. Put your feet back on this world and see reality, for it won't go away if you shut your eyes and wish it would.

The good news is that a lot of manufacturers are having second thoughts about setting up manufacturing plants in China. The reason is, well, the Chinese.

We in the West kid ourselves thate verybody is equal and that deep down, everybody has more or less the same ethics. That is a very dangerous propostion to pin on Chinese. To put it simply, Chinese business ethics do not exist.

Manufacturers who relish the thought of their product being produced in Chinese factories where low paid workers work two eight hour shifts, have come to the realisation that after their representatives go home, the Chinese get up to a little hanky panky. Unknown to their owners, these factories often work a third shift using sub standard materials. This was the reason why the batteries in NOKIA phones started blowing up all over the world.

The Chinese will counterfeit anything. What's more, they don't see anything wrong with doing it. Manufacturers who find out what is going on and who make legal representation to the Chinese government or legal system, may get sympathetic hearings. But that is all they will get. The Chinese government has no intention of killing the golden goose.

So be careful readers. When it comes to Seiko watches, Ray Ban sunglasses, Nissan car parts, Prada handbags, Billabong clothes, North Face sportswear (called "North Fakes" in China), or just about anything, nobody knows who is making what anymore or what the guarantee of authenticity or quality is.

One manufacterer of luxury goods was rung up from Peking by a friend on holiday, who complemeted his friend on their fabulous new store in Peking. His friend said "We don't have a store in Peking."

That's classic, redneck. What a time to choose to lecture us about the lack of ethics in Chinese business!

Tell me how ethical we appear to the Chinese, given that we have a bureaucracy - if not a government - that supports an Australian company delivering bribes to the leader of a country with whom we are eager to wage war. And I don't believe we have heard the last of this either - I strongly expect the dirt to spread widely, probably onto BHP, possibly to other representatives of our gallant raw material exporters.

The Chinese do business differently, it is true. They prefer to work with relatives and friends than with foreigners and strangers. There are bad apples in the barrel too, but we are not without a few of those ourselves, are we? Skase, Bond, Williams, Rivkin, Adler - just to name the ones who have been caught.

Your view of their shortcomings is rapidly becoming out of date. It is not in their longterm interests to allow unfettered copyright abuse, if only because with a little capital and effort, the same factory can be used to produce higher value goods that are not fakes.

Blinkers off. Talk to some people who are working there right now, and find out for yourself how much progress is being made. If you insist on hearsay as your main source of information, so be it. But be aware that you may not be as well informed as you might imagine.

Gregs capacity to look to the future seems to be able to take him as far as the end of his nose at best: We all know he is disheartened about the state of Australia but it shouldnt be effecting his judgement to the point he writes several hundred words on the bleeding obvious.

China has not sprung up like a mushroom over night; it has been looming as an economic freight train for decades. Greg's warning is some what of a waste of time - and in this instance a waste of space.

Pericles,
your diligence in exercising restraint on criticising my 'rants' is praiseworthy, as are your alternate trysts into actually criticising.. all is welcome.
Same to you Yabby.. appreciated (while not agreed)

Pericles said:

"It is neither, simply a fact of business life that goods are made more cheaply in China than in Adelaide."

Yes.. but 'why' ? Pericles your usual incisive analaysis is sadly lacking here. Lets dig 'behind' the why....

1/ Union pressure over the years to 'improve working conditions'
2/ Chinese dictatorial imposition of artificially LOW labor rates.
3/ Economies of Scale

Now 1 and 2 are both feeding the situation. In terms of Australian national interest, they are mutually incompatable and exclusive. 3 is just a matter of willpower,capital and global marketing.

How can they be addressed ?

a) Increased automation of labor intensive processes (using low cost CHINESE machines :)

b) Global marketing perspective.
c) Identifying specific target industries which lend themselves to our resource supply and focusing on the value adding.

It doesn't really matter which way we go, labor will lose out.
The only thing 'inevitable' is that labor rates in Australia are unsustainable for anything that we wish to compete on in the world.
So it is either 'automation' or cut labor rates and costly working conditions. Or, set up special economic zones where labor rates for Indonesian guest workers can be applied and transport costs reduced (shock horror :)

There has been a FLOOD of Chinese made Furniture and even sink tops and taps coming into Australia. Canterbury road Kilsyth is full of them. HUGE 'boss' desks in fine timber..for like $600 ! but we CAN make such, with automation and efficient business practices, with a GLOBAL marketing. We could even set up 'finishing' mini factories in target countries to reduce that cost.

Yabbs... I love my Bible :) it has a future 0_-

For a few thousand years, my dear Pericles, the cost of doing business in uncivilised countries in the Middle East was by greasing a few palms with baksheesh. If the AWB is greasing a few Iraqi’s palms like everybody else, then I am impressed. I didn’t think that Australians were sophisticated enough to deal realistically with Muslims. Whatever virtues the Islamic faith bestows upon it’s adherents, honesty has never been the most prominent.

But if China wishes to remain within the WTO, then it has to live with a few ground rules. Two very important ones are respect for copyright and a perception by your business partners that you can be trusted to keep agreements. On both of these points the Chinese are failing badly. It appears that the Chinese attitude to foreigners building factories in their country is.

1. Thank you for building a factory in our country to produce your goods.

2. Thank you for teaching us how to manufacture your goods.

3. We recognise how important your trademark is for marketing quality goods.

4. We will use your trademark whether you like it or not.

5. Now, go away. We do not need you anymore.

This is why western firms are having second thoughts about doing business with the Chinese. As for where I get my information, that is simple. I am a war buff and I was absolutely fascinated with the Chinese attitude to their war with Japan. To most Chinese, it was simply a means to make money. This appears to be the favourite pastime of all Chinese.

Other books that I recommend are “Lords of the Rim”, which gives a historical perspective of Chinese merchant “kongsi’s”. This book also displayed how Chinese Communism was a continuation of the traditional hostility which the ruling class in Peking had always had for middle class merchants.

The second book I read was “Knockoff, The Deadly Trade in Counterfeit Goods.” This book dealt with world counterfeiting, but most of it deals with the Chinese and their incredible lack of business ethics.

"The only thing 'inevitable' is that labor rates in Australia are unsustainable for anything that we wish to compete on in the world".

David its far more complex that that, but it comes down to comparative advantages. Switzerland for instance got wealthy, without resources, with extremely high wages, just by being smart.
Go to your local Coles store, Lindt chocolates are on the shelf, made is Switzerland. People buy them. Price is only one reason to buy something, there are many others. Australia has plenty of areas where we have comparative advantage, so we have to focus on those things and get rid of some of the things that hold us back.
Taxing exports for instance. An expensive and increasingly litigious society, which in the end is passed on in insurance premiums etc.

Pericles, I have to disagree with you on AWB. Most of the time, Aussie companies are like babes in the woods of the international jungle out there and are taken to the cleaners. AWB plays the game against heavily Govt subsidised Govt products from Europe and America and they play it pretty well.

The reality is that they have to perform and move wheat, unlike their competitors. Farmers are directly affected by their results.
Before the politicians mouth off, they should first of all compensate farmers for decisions that they took for political reasons and farmers got shafted and are still owed money from even before the Gulf war, by Iraq. Australia might have gone to war to keep George happy and Johnny in his good books, but trade is trade and Iraqi people need to eat, farmers here need to sell their wheat. I doubt if too many Aussie politicians really understand the real world of trade out there. Its dirty and nasty and its about survival of the fittest. The UN were free to scrutinise those deals. If they didn't do their job, oh well, thats there problem.

you don't have to look too far into the future to see that the end of cheap oil is another factor in all this business. if the cost of fuel goes up, then the cost of digging everything out of the ground goes up, the cost of transporting those materials to china goes up, after making a million widgets for export to australia, it has to travel again and be distributed from the ports.
it seems to me that the increasing cost of oil (and therefore increasing raw material and transportation costs)will progressively make it more cost effective to manufacture locally. in fact, if oil jumped really high, it would favour manufacture of serviceable good quality goods as disposable $10 electric sanders from bunnings would become a thing of the past.
you'd probably need oil to be sustained at greater than $200 per barrel to have much affect though. transportation by ship is pretty efficient -although if you had to BUILD a ship in a $200/L oil economy, rail distribution of locally produced goods may have a useful advantage economically.

Redneck,we used to bag the Japs about their quality and now they are taking over in the US in car sales.The Chinese are fast learners and we need to face that reality and make the necessary adaptations.Even if we put 50% tarrifs on their products,we still can't compete.

We have to be more creative in our thinking and use the manufacturing might of of China to sell the US market about which the Chinese have very little knowledge.How many Aussie inventions have gone to the US because of the lack of courage and expertise of our so called experts?

We need to back our own creativity and inventiveness instead of buckling to the weakness of investing in the foreign sure thing.

We did indeed sneer at the quality of Japanese goods Arjay, but you are missing the point. The Japanese built their industries up from the rubble of WW2, and their evolution from selling cheap goods to manufacturing high quality goods has been noted. Yamaha’s first large capacity (650cc) motorbike was a direct (although much improved) copy of a British BSA, but the Japanese put “Yamaha” on the side of the machine, they did not put “BSA” on it and try to pass it off as an original.

But the Chinese are being given the means to create high quality goods by manufacturing firms who already have reputations for manufacturing high quality goods. These firms are now realizing that giving the Chinese the means to clone their goods, usually with the brand name firm’s own machinery using inferior materials, is destroying the carefully crafted image of their own brand names.

The Chinese see no need to be creative and create their own internationally respected brand names, when it is much easier to steal somebody else’s brand name and counterfeit their goods. Japs and Chinese are different people with different culture. The total lack of ethics of the Chinese merchant class is the primary reason why the Chinese ruling class hated their guts for millennia.

If vegemite is ever made in China I will forgo the pleasure.

Australian manufacturing swamped by the Chinese tsunami?

The rise or demise of Australian Manufacturing has been the result of government interference since around the time of the failure of the Sunshine Harvester Company.

Basically Australia has a problem. Comparatively, small domestic population and thus market size.

Hence, where (say) a USA manufacturer had a factory with 5 machines working 24 hours a day to produce one product, Australia will have 1 machine working 10 hours a week for the same product and used for other things (tooling change downtime) the rest of the time.

The rise of Australian Manufacture through the 1950’s and 1960’s was developed with
1 Incentives to manufacturers from overseas to set up local manufacture (eg Hoechst)
2 That was supported by quotas and tariffs for foreign imports to secure local markets for local manufacturers.

Resulting in a protected domestic industry where the consumer paid higher prices for a limited range of products, sometimes of inferior quality.

To quote
Tariffs have been one of the abiding features of the Australian economy since Federation. Tariffs protected Australian industry by making foreign goods more expensive here; and the supposed virtues of this protection became deeply embedded in the psyche of the nation. (Prime Minister Hawke, Economic Statement, 12/3/91).

(http://www.hrnicholls.com.au/nicholls/nichvo13/vol134pr.htm
“Protectionism and Labour Regulation”)

It is much like building levy banks around a river, although a cheaper short term solution, when they burst, there is a greater catastrophe than if the river had been dredged in the first place..

The problem with protectionism is it end up as those levy banks and when a catastrophe occurs the ensuing disaster is greater than had things been left to go their natural course.

Solution, Australia finds what it does best and do that. If uneconomic manufacturing cannot sustain itself, do not pretend or pay subsidies to support it.

Free-Trade, the inventive mind and innovative entrepreneurs will produce real jobs.
Protectionism will only buy some sheltered workshops jobs for a few at the expense of the many.

Excellent points raised in your post Col, and it was a pleasure to read without the usual invective.

I believe that Australia can survive provided its industry is encouraged (research&development) to provide not only what it is good at but that which the world needs.

In technology we have the opportunity to excell at sustainable products such as solar, wind power and develop new products.

In agriculture we can concentrate on supply of low water, chemical free crops. Why compete with the big GM markets such as USA when we can specialise?

Cheers

FRIEDRICH, Vegemite is made by Kraft foods, owed by Altria, which is a Phillip Morris cooperative. On the 12th of Dec 2005 The China National Tobacco Corporation and Philip Morris International Announced the Establishment of a Long-Term Strategic Cooperative Partnership. So by association Vegemite is made in China.
So you'll have to settle for just butter (locally made) on your toast it seems.

See: http://www.altria.com/investors/02_00_NewsDetail.asp?reqid=798160

And see Dick Smith's Media Release - 27 October 2004 about Vegemite:http://www.dicksmithfoods.com.au/dsf/index.php?d=media&p=27oct04

Wrigley's chewing gum is also manufactued in China under licence. Unfortunately for Wrigleys, their manufacturer saw no need to use food grade gum when manufacturing a few shipments on the sly. Wrigley's found that it's product was being counterfeited by it's own machinery, by employees who even counterfeited a Wrigleys delivery vehicle, with delivery men dressed in counterfeit Wrigley's uniforms, who were making deliveries to shops who sold Wrigley's Chewing gum.

The significance of this can be appreciated in the spate of poisonings which have occured in Europe, whereby counterfeiters have been responsible for hundreds of deaths due to selling counterfeit food products. Hundreds died in Spain after being poisoned by counterfeit cooking oil in the 1970's and only recently dozens died in Turkey after drinking counterfeit uzo.

If the Chinese are now manufacturing vegemite, then sniff the product that you buy first before you bravely stick it in your mouth. Vegemite looks like axle grease and the Chinese might consider that nobody will notice if they use real axle grease.

I wouldn't use any axle grease that looked like Vegemite..

Scout “Excellent points raised in your post Col, and it was a pleasure to read without the usual invective.”

Check my posts, the “invective “ is used in response and not initiated.

However, Pleased you liked the post.

My experience , being from UK and born in the 1950’s was to observe the nature of government interference in industry and the consequences.

A lot of my views are based on the observation that no business deserves government protection or assistance.

Cases put up as “special cases” or seek exemption (protection) from the natural market conditions are just promoting a “bad case” with the right weasel words.

The collapse of British heavy industry in the 1980s was more widespread and intense because it had been “protected” to too long that the natural attrition to be expected in any changing environment was held back, just like levy banks and rivers.

The collapse of the eastern European economies in the early 1990’s was not the fault of freer market activity but the direct consequence of their heavily protected and regulated “Marxist / socialist economic” processes and planning which could not / would not deal with realities of change.

People should understand several important realities when discussing economics

1 A market (supplier and consumer) does not exist in isolation to other market forces (other suppliers and other consumers)
2 Artificial barriers to trade are only valid in extreme cases (eg matters of national security) or for a short time with defined goals and sunset clauses.
3 Markets are the result of changing demand patterns and influences. Nothing is ever fixed or forever.
New opportunities arise as traditional “markets” falter.
The successful market driven economies will succeed through exploiting their natural advantages and being constantly on the look out for new opportunities to maximise those advantages.

These 3 points are not options.
No one can resist competitive pressure (1 and 2) indefinitely.
Alternatives to “market economies” (3) have failed consistently throughout history. The biggest reason for those failures has been the inability of other systems to deal with the consequences of “change”

Scout, after connecting on Baldur’s Gate, depression, viral illnesses and suffering at the hands of a state government employer, I’m a bit hesitant to challenge you on this topic! You wrote “I believe that Australia can survive provided its industry is encouraged (research&development) to provide not only what it is good at but that which the world needs. In technology we have the opportunity to excell at sustainable products such as solar, wind power and develop new products.”

Unfortunately, R&D is only a minor part of innovation. The major parts are the entrepreneurial skills, resources and market access needed to compete on global markets. Australia is strong on development of ideas, very weak on turning them into commercially viable products. In general, firms carry out R&D to the point where the risk-adjusted rate of return is equal to that on alternative investments. The reason that business R&D is low in Australia compared to other OECD countries is in part because businesses based here can not, by and large, generate sufficient return from it. This is why many Australian ideas are taken up within large markets overseas, close to users/consumers, where they can be profitably developed.

Where you do find innovation in Australia (not always based on R&D), it’s generally in industries which are not competing globally, such as retail, distribution and construction.

[In passing, it’s often claimed that the problem in Australia is a lack of venture capital. This is rarely the case – it’s a lack of ideas which are commercially viable with an Australian base. Bureaucrats in Queensland’s so-called Department of State Development often claim to have identified sure-fire winners which the business sector, which lives or dies by its ability to identify profitable opportunities, cannot recognise. My first question is “So you’ve mortgaged your house to invest in this great idea , have you?” Alas, the answer is always negative.]

Dear Col
I think on the whole your reasoning is quite good.. but I still maintain that it does not address some important issues which I've alluded to at times.

You say British Heavy industry died as a result of removing government protection. Ok.. lets go a bit deeper.
Why... was it not competitive without government protection ? and 'what' kind of protection did they receive ?

3 major factors cannot be ignored in seeing how protection or its absence is a good or bad thing.

1/ UNION actions in continually raising the wage costs

2/ INDUSTRY LEADERS who were content to wallow in the protection, rather than invest in Innovation (new methods, new equipment)

3/ Artificially low labor rates in competing places.

We also have to ask the question HOW did emerging countries like Korea become so stoked and competitive from the ruins of war ?

Where did the CAPITAL come from which enabled them to set up such heavy industries and utilize a low cost labor force ?

Is it possible that the uncompetitiveness of British Heavy Industry was in part brought about by BRITISH investment and technology directed in these places like Korea ? (I dont know, I'm just raising the question)

Is it possible that the Korean GOVERNMENT took action in the economic interests of their countries and ensured that certain target industries were 'helped' assisted PROTECTED.... etc. to get to the point they are in now ?

P.S. 37% of Switzerlands GDP is in Pharmeceuticals. 7% is Motor Vehicles.

In GDP terms Australia (and Switzerland) has approx 26% in 'industry' and 70% in 'Services'.
26% is one hell of a lot of unemployed people if manufacturing 'dies'.

Surely we can learn from past mistakes and inculcate a better ethic in young Australian entrepreneurs ?

Vegemite made by the chinese. That's gotta be wong.

I believe that there is too much "dumping" going on in these threads.

Surely we can respond to each others posts without having to resort to "dumping."

It's just not good enough really.

I remember back in the old dart we never would even consider "dumping".

Pip pip tally ho.

CHINA can teach us a lot......

They have structured their industry in the following ways..

Small parts for various brands of various products are made in HUGGGGGE quantities... (some lever or cog in a printer)

Then they have other manufacturers making complete assemblies, (using the cog produced above) again in HUGE quantities, and for various brands.

They have separated "Marketing" from "Manufacturing" in many cases where marketing groups focus on obtaining the patents, registrations, etc and approvals for access to large overseas markets like the USA.

MARKETING is always GLOBAL.. whether it is cheap hammers, mattocks or whatever.. they produce with every Bunnings Store in the WORLD in mind. We can also and we have the raw materials. Cost of steel+$0.30 X 5,000,000 is still a lot of money. (freight is no more costly)

TRADE MAGAZINES contain all you could ever wish for, in various quality levels..

Most products are produced and marketed in CONTAINER sizes....

I remember being freaked out of my brain in Singapore once when I saw a large TRUCK driving around on the 5th story of a large warehouse.. looked like it was just the balcony.. good use of space..

Singapore is very much a Government guided economy, as is Malaysia.

We in Australia are too embedded in concepts which we regard as 'untouchable' or 'holy' we need to free up our minds.

SOLAR and RENEWABLE energy IS a sector where we can make progress.. but don't too many do it cos I AM :) You can visit my Maximum Power Point Tracking Solar Pumping demonstration in due course. But even Malaysia is producing very crappy and cheap throw away regulators.

DavidB, Col’s analysis is supported by a wealth of evidence. Two specific British examples which stick in my mind. Britain in the late ‘50s had six shipbuilding yards, two viable, four moribund. So the government poured support into the latter four, leading to the collapse of all six. The Mini (car) was a massive seller, but made no money. Why? As part of a deal for a takeover of the old Rootes group (by Chrysler?), the government demanded that they make a mini-car (the Imp) in Scotland. Result: neither the Mini nor the Imp was viable.

The Asian “tigers” - South Korea, Singapore, Hong Kong and (I think) Thailand had three advantages. 1: a government focus on exports – support was dependent on export success; 2: high domestic savings rates (the main source of capital); and 3: a preparedness to move on, to let go of ailing industries and move into new ones. By contrast, the UK and Oz have generally protected declining industries (and still do in Oz), not had high savings rates (and in Oz have tended to invest in unproductive property). The “tigers” also had a big shift from low-productvivity agriculture into higher value added manufacturing and services, and the capacity to import Western technology.

Someone suggested you read The Economist. You can get an online subscription for about $100 – money well spent if you want to comment on economic issues.

David, your theories won't work, you need a comparative advantage.
Our basic infrastructure costs are simply too high to compete with China in manufacturing of commodity factory products. So we are better to stick to niche, higher value products and things like farming and mining.

I bought a cement mixer recently, made in China. For what I need, it will do the job. Its weight was on the box. I also buy alot of steel from Onesteel and I worked out that the cost per kg of that mixer was no more then Onesteel charge for raw steel products.
Heyyy, quit dreaming :)

Now food is a different story. I would never buy food products from China, no matter what they cost, for very good reasons. I think that all Supermarkets should be forced to be much more specific about where their foodproducts are produced, so that we consumers know exactly about origins etc and can make an imformed choice

Boaz, I think Col has pretty well summed up the situation. You suggest that there are "other" reasons why British industry died, and no-one can argue that militant trade-unioninsm and lazy management were contributing factors.

But the concept of "Artificially low labor rates in competing places" simply won't wash.

You also described them in an earlier post as "Chinese dictatorial imposition of artificially LOW labor rates".

In a business sense, there can be no consideration whether the rates are "artificial" (I presume you mean oppressive to the local community) or not, this is simply a value judgement made by an outsider.

Many governments have imposed from time to time restraints upon wages - in the UK it was called a "Prices and Income Policy" - in an effort to ensure their workforce is internationally competitive, but this is only ever effective for a time. Ultimately, market and social forces take over, and incomes rise. This has happened in every market from Taiwan to Thailand over the past few decades, and is a "good thing".

You ask "Where did the CAPITAL come from which enabled them to set up such heavy industries", and the short answer is ODI, overseas direct investment. Foreign companies invest in the local economy specifically to take advantage of lower labour rates, and in doing so bring in technology and knowhow.

Korea is a slight exception - they used overseas borrowing for many years - but eventually saw the light in 1998 with their Foreign Investment Promotion Act. But in the early stages the chaebol were supported by the Banks as they grew.

Did the British contribute to their own problems by exporting knowhow and technology? Possibly. Even probably. But would you suggest that no-one shares knowledge, in case someone can do it better? After all, one of the side effects of growing someone else's economy is that it provides you with a market... they can now afford to buy your stuff, having sold you some of theirs.

Incidentally, the biggest source of ODI in China is.... Taiwan. So you see, it isn't political. Just business.

Late, I Ran out of postings

David, What China has done is merely addressed the issue of “Market”

Looking at Australian car production, as an example, many components are built by specialist suppliers and reflect the same manufacturing / marketing relationship which you accredit to China.

My original post identified the problem Australia faced with small domestic market size.

Part of the mindset was driven by historic influences. In the 1950s, with every other nation on earth exercising protectionist policies including heavy import tariffs, thinking beyond the domestic market was hampered to the point of ignoring the potential.

For many of its manufactured goods, China has no domestic market.

China was not “limited” in its thinking to in domestic market terms. China perceived its opportunity as a world wide supplier and did that on the back of cheap labour.

Now we come back to the standards of operation. Chinese employment practices, OH&S etc. compared to Australian standards result, in a cheaper labour hour cost than Australia.

I say that as a fact, not good or bad, simply a fact.

Because of lower employment standards, the Chinese can produce labour intensive articles at a significantly cheaper price than Australia. However, having spent many years working in Australian manufacturing environments, I know the dexterity and innovation Australians can deploy enables Australia to produce a range of capital intensive products economically and competitively.

Supporting Pericles post.
Ultimately, we come back to government. The Chinese government have withdrawn from overall economic control, surrendering sections to private entrepreneurs. This is significant. Whilst government control may remain extensive, relative to Australia, you have to ask why surrender any of that central control?

Because the Chinese authorities realised it did not work. Similarly, and ultimately, government “playing” with industry does not work (be it Australian, UK, USA or Chinese industry). Government interventionist policies only produce the levy banks of my previous illustrations.

Governments playing with peoples lives does not work either, individuals know what is best for themselves and by nature, should not want governments to “regulate” their lives. Instead they take risks and are rewarded

Unfortunately the world of manufacturing is changing. If only one could go back to England in the fifties. Now that was maufacturing at its finest.

“Unfortunately the world of manufacturing is changing. If only one could go back to England in the fifties. Now that was maufacturing at its finest.”

That is the same argument the croppers claimed for their efforts regarding carpet finishes (http://www.ehs.org.uk/society/pdfs/Kirby%2025a.pdf) and close to the excuses luddites relied on for smashing textile equipment.

It is the same argument which the inefficient demand that governments indulge in to protect “vested interests”.

Reality is if English Manufacturing was so tip-top and fabulous, it would have prevailed over the efforts of the rest of the world.

Manufacturing itself is one aspect of the product process. Product research, business finance, marketing, distribution, selling all play roles in the commercial cycle. Manufacture as much as you want but if you have no market to sell it in or no marketing skills with which to promote it or sales skills with which to sell it or if you just cannot or will not compete with competitors, why bother?

Case in point, Rolls Royce. Major UK public engineering (figure head) company. Went bankrupt in 1971 largely due to poor financial controls and a corporate board made up of engineers who threw all the resources into research for carbon fibre applications in jet engine blades etc. It was spared the ignominy of being broken up by being nationalised. They had to sell the cars off but to no avail (even BMW do not want them nowadays).
http://en.wikipedia.org/wiki/Rolls-Royce.

Conversely, Pilkingtons jealously private UK company Have been consistently independent and private up until the mid 1970’s . Went partially public to fund new float glass product development and have been consistently successful. Not all UK manufacturers are “basket cases”, just the ones which were “saved” and nationalised and turned into sheltered workshops for incompetents.

As for “manufacturing at its finest” some would say the pottery work of Josiah wedgewood has never been matched since he invented his processes.

“Manufacturing” embraces such a broad range of activity, which effects a massive range of articles we all use. To suggest any particular time represents the zenith of “manufacturing achievement” is naïve.

I've never been to England nor do I know a thing about their manufacturing in the fifties.

Pip Pip tally ho.

Col, I am in total agreement with most of your conclusions and arguments, but I fear you may have gone a little overboard with the statement "The Chinese government have withdrawn from overall economic control"

The Chinese government is - still - a massive state bureaucracy, that intervenes in the market in many different ways. Not least of these, of course, is their careful, and extremely clever, management of the exchange rate.

Nor will you find the equivalent of anti-trust laws, that in Western economies attempt to maintain a level of market freedom by preventing the accumulation of market monopolies. As Peter Morici of the Baltimore Sun pointed out in an interesting recent article (unfortunately timed-out from their web site, though Google has archived it), "If Archer Daniels Midland and Cargill [US commodity processing giants] conspired to manipulate commodities prices, Western enforcers would impose steep fines and perhaps jail time. In China, though, the cops and robbers are one and the same."

He also uses a phrase "autocratic capitalism", which quite nicely conveys the iron hand that remains their weapon to ensure that the state does not lose control of the economy as it grows through the efforts of its entrepreneurs.

One additional point, which I might cross-pollinate to another forum.

In November last year the UK's Guardian, not widely known for its conservative bent, remarked upon "[China's] extraordinary economic growth, titanic industrial expansion and pell-mell sprint towards capitalism which have lifted 400 million Chinese out of poverty in a generation"

Pericles..

I would agree with your sentiment re appearances and practice of Chinese bureaucracies.
My point with control was, the idea of the Chinese communist model giving up even the smallest amount of control was astounding but it has happened.

Your comment re anti-trust is absolutely correct. Note, anti-trust really matters when servicing domestic markets and much of the new production is not for domestic consumption.

To be honest, I would find one of the biggest competitive advantages for investment of new industries in Australia remains our history. That history is one which says, invest in Australia and the investment is safe from nationalisation or state seizure. I would not trust many places in Africa, China, the Middle East or the old Eastern European states to be free of that risk.

Some here sneer at our British heritage. They forget that heritage includes language. I think, in terms of competitive advantages, better to be speaking English than koori or some other minority ethnic tongue (like French or German).

Attitude also matters. Practises which I think were prevalent in Malaysia, of legally requiring a senior director to be of a particular ethnicity seriuosly detract from “competitive performance” (the dangers of “affirmative action”) and developing effective management structures.

I believe inspiration and innovation tend to be the most important aspects to developing new industries. The USA are famous for it and it rates high, for developing employment growth along with “reward for risk and effort” instead of the “wage capping” and other dumb-arsed micro-management and undue interference strategies inflicted by the UK socialist governments of Wilson and Callaghan upon the UK industry in their vain attempts at levy building in late 1960’s and 1970’s. The same levies which Dear MArgaret then had to tear down in the 1980's.

Friedrich – your posts re English manufacturing are completely nonsensical. If you have nothing to say, as seems the case, protect your dignity and say nothing, rather than write nonsense and diminish in everyone else’s assessment of you.

Lay off Friedrich, Col. He was probably just using up his fifth post in an attempt to break the intensity of ongoing heated discussions. I, for one, welcome the occasional "nonsensical" contribution.

Tubley “Lay off Friedrich, Col.”

Who are you to tell me to lay off anyone?

When were you appointed “classroom monitor?”

If Freidrich wants to post nonsensical rubbish he is allowed to.

And I am allowed to comment on the nonsensical rubbish which he posts.

That is why this is called an “opinion forum”. However, for good or bad, the notion of a sheltered workshop area for feeble minded posters is not included among its features.

“....the intensity of ongoing heated discussions.”

Actually most of the later posts, Friedrich’s asinine interjections apart, were a series between Pericles and myself, largely agreeing to aspects of each others individual assessment of circumstances.

You might find that all “intense”, probably absolutely bewildering too but it must be obvious, even to you by now,
You are playing in a league well above your “weight class” (cognitively speaking).

“I, for one, welcome the occasional "nonsensical" contribution.”

We all knew that, you post most of them.

In summation, I do not need you to tell me when to “lay off” anyone. I consider you a pretentious fool for even suggesting it.

Further, I notice from a recent post of yours to me on the "Greenpeace rejects violent tactics" Thread

"You are a woman-hating chauvinist.

And after all of this, you have the audacity to say that I am somehow trying to restrict people’s rights. The hypocrisy is almost beyond comment.

This is my final word to you, Rouge."

Posted by tubley, Friday, 20 January 2006 9:56:24 AM

My response was

"Excellent!
However, somehow I doubt you will keep your promise. "

Posted by Col Rouge, Friday, 20 January 2006 12:43:57 PM

Looks like I was right again, I knew I should have put $10 on it.

And look - you complain about me for pointing out, you want to restrict peoples rights.

Well, what have you demanded here? My right of reply to Friedrich be "restricted" (Lay off)!

I was right with that too!

You are an A grade Hypocrite

Col,

Just finished my breakfast which is sitting quite well despite the gut-full of venomous comments I just received from you. Immunity – a wonderful thing.

Nonetheless I was awaiting your daily bombardment of random insults – I welcome comments from friends and foe alike but obviously prefer the non-hostile ones.

I’ve noticed you have a long history of insulting people though. To give support to my claim I compiled a list of the top 10 insults the great Col Rouge has posted:

1. “It should have been your father who should have been sterilised, at least 10 months before you were born.” (18/01/2006)
2. “I guess the “left” has still some way to go before it can come to terms with being intellectually barren and politically “impotent”.” (07/12/2005)
3. “Beyond your own defective judgement you have nothing to contribute.” (13/12/2005)
4. “Doubtless I will now be vilified by the limp-wristed pansy patrol.” (16/12/2005)
5. “Your writing style resembles that of an arrogant but lowly educated ponce.” (20/01/2006)
6. “Your collected rhetoric has the wounding effect similar to that delivered by a small bucket of earthworms.” (21/01/2006)
7. “…piffling on like a bandicoot on steroids.” (18/01/2006)
8. “...logic, accuracy and reasoning skills have never rated highly in any of your posts.” (22/01/2006)
9. “…say nothing, rather than write nonsense and diminish in everyone else’s assessment of you.” (25/01/2006)
10.“…as a "teacher" he is both a failure and a fraud.” (15/02/2005)

Quote number 10 on this list was particularly interesting coming from a man who consistently lets people know they are “unqualified” to contribute their opinion to many given topics on this forum. How long have you been teaching for again?

Ironically, all of the insulting quotes I listed above come from the same man who favours the following quote from Margaret Thatcher (and has used it at least twice on this forum):

“I always cheer up immensely if an attack is particularly wounding because I think, well, if they attack one personally, it means they have not a single political argument left.”

What were you saying to me about hypocrisy?

Tubley

Your post is hilarious.

Col Rouge

You project as being rather thin skinned - instead of writing defensive diatribe I would rather read your opinions - I don't always agree but you do appear intelligent, sometimes. Besides, perhaps some courtesy could be extended to those who wish to read opinions rather than vitriol.

Back to thread - I agree with Greg Barns that Australian manufacturing will change; we have new industrial laws, shrinking fuel resources, emerging development from Asia and the possibility of civil unrest if people continue lacking respect for and acceptance of each other.

At the very least we live in interesting times.

tubley,

Thanks.

"using up his fifth post in an attempt to break up the Intensity".

That's exactly what I was doing. You apparently were the only one to notice that.

"pip pip tally ho"? More like come in spinner. Hook line and sinker.

Do the pompous lose their "dignity" by being thin skinned?

Tubley, Col - I don't go for abuse myself, but I found T's list of Col's Top Ten very entertaining! If we're going to have invective, it's nice for it to be varied and amusing.

Tubley – sneer all you want. I am sure you could produce a far superior list of insults if you used the ones made at you, rather than just the ones made by me.

BTW your hypocrisy was to declare our withdraw from your attacks on me and then a few days later you could not help yourself, you were emotionally compelled to buy in with your unilateral demands.

As for the list – obviously you made only a cursory scan through the 500+ post because I am sure there must be better ones than those, probably subtler (ah but that explains why you would have missed them).



Freidrish
1 “Unfortunately the world of manufacturing is changing. If only one could go back to England in the fifties. Now that was maufacturing at its finest. “
2 ” I've never been to England nor do I know a thing about their manufacturing in the fifties.”

Based on your unilateral declaration of ignorance (2) why did you post (1) ?

As I suggested - If you have nothing to say, as seems the case, protect your dignity and say nothing, rather than write nonsense and diminish in everyone else’s assessment of you.

There is nothing less dignified than the admission that you were talking through your fundamental orifice in the first place by declaring a complete lack of substance in the second place.

If you choose to talk through your arse I suggest you do so in private. Because you can guarantee comment when you do so in public.



Scout – the gauge of the dermis is of no concern. The invective is reserved for response to the vitriolic.

In this instance, tubley bought in with his mother-hen commands which he knows he has no authority or capacity to impose. A fact I was reminding him of.



Faustino “it's nice for it to be varied and amusing.”

Thanks F, repetition is the output of the sterile mind.

Col - ya caint have it both ways, claiming unconcern at the depth of your skin, yet responding like a salt infused slug at the merest suggestion of insult.

I ask of you, as a courtesy, to ignore the perceived slights and continue to pour forth with your POV - thus establishing credibility and respect from your peers on this forum.

BTW the dermis is the layer beneath the epidermis - and is the highly sensitive connective tissue for glands and blood vessels. This leads me to conclude that you are indeed a sensitive little petal.

Scout, If only Col "could" ignore the posts critical of his. Col has two things going against him sadly, which I think you should be aware of when trying to communicate reason;

1. He is a snob, from england, who thinks of us as convicts, and the english as our masters, as shown by his pompus, arrogant, know it all, posts. And when anyone questions his posts, or comments adversely on them, comes the tirade of abuse, which stems from his superiority complex, and of course point 2.

2. The Mental Illness, diagnosed or not of paroinia, is very difficult to treat, especially if the person afflicted does not admit it. Rationaility goes out the window, e.g. he has refered to tubley as both "mother hen" and "bully" one of course oppisite to the other, the ironary lost on the "paronoid personallity"

The sad part is sometimes he does know what he is talking about, however he does not know the difference, and see's any critisicm, whether constructive or otherwise as an attack on his credability, not on his opinion, I have seen the odd paronoid personality, they are to be pitied, not abused, good luck Col, there are specialists who can help if you let them, however they are Australian specialists, not english, look forward to your posts, Regards,Shaun

Shonga,

Mate, please ignore any rude individuals and respond only to those who have respect, regardless of their view. I sometimes find the presence of certain individuals on this forum very belittling and depressing. It has a draining effect that makes people not want to use this site which should not be the case.

Last time I checked this was an online opinion site - operative word being 'opinion'. So in that way we are all qualified to state our view and noone is superior to the next.

I am an Australian citizen no higher or lower than the next. There are no rocket scientists on this site that I know of, nor is there anyone who holds the cure for cancer. I welcome anyone's view as long as it's not hostile, degrading, insulting and demeaning. I received a phonecall the other day from a man who does not explicitly share my views but we had a respectful, meaningful conversation which was much appreciated.

I usually find the 350 word limit, 5 posts in 24 hours etc too short. Therefore, anyone else who would like to discuss any matter with me at length, may use the following contact details:

Email: tubley@yahoo.com
Phone: 0439 451 397
MSN messenger chat: tubley@hotmail.com

Col Rouge,

Sneer all you want but I will always like you.

You say in fifty words what most people say in five. That's why I like you. You remind me of Castro giving his four hour speech at the UN. Four hours Col. What a talker. Good stuff.

Don't worry about the other posts you have the right to ramble on. And on. And on. And on. And on.

Col Rouge I salute you and your dictionary!!

Hey hey guess whos back,
Mr Rouge, you didn't think I would ACTUALLY leave for good did you? JT_dontmesswitme recieved a cry for help. I recieved word that mr Rouge was spreading the contegous desiese known as [deleted for swearing, poster suspended] across many a forum. I urge you to stop this. If this desiese spreads any further, people like you could end up running Australia.... again. (God Forbid)

Friedrich, thank you, it is something for you to aspire to,

However, comparison to Castro, oh, cutting, and me, a clean shaven non-smoking soul with greater aspirations for everyone, including Cubans, than the misery inflicted on their wasted lives in one of the last remaining Stalinist labour camps.

JT_dontmesswitme “Mr Rouge, you didn't think I would ACTUALLY leave for good did you? “

Who ever you think you are, your opinion is inflated.

I do not have a clue who you are.

My memory does, however, recall, the individual receiving a significant period of suspension for trying to circumvent Mr Young’s suspension notices.

So you might be that same wizened one. Alternatively, you might be Shonga trying the same trick, in which case I am sure Mr Young will identify and suspend you for longer again.

AS for “I urge you to stop this”

Urge all you want, I only have interest in promoting my views. This is, after all, a public opinion forum and we do not live in the sort of cesspool socialist state where you can restrain my freedom of expression.
If you cannot deal with the implications of those facts, then run home to mother and don’t bother to post. I assure you I for one will not cry for your return but nor will I wring my hands over your continued attendance.

Either way – your contribution, be you Shonga or Gollum’s twin, will, I am sure, be equally puerile and irrelevant. So, who cares what you are.
Doubtless, you will soon exercise the same irreverence toward your betters as you have done in the past, then assuring us of the peace associated with a fresh period of your suspension.

I will not "mess with you" but please, exercise control, I would hate for you to mess yourself.

dude, what are you talkin about? I heard about this forum just a couple of weeks ago and your accusing me of bein shonga or sumthin like that. Just chill out bro. Stop acting like you've got something to prove. I know you have an opinion but it's not, no matter what you might think, the ONLY opinion. [Deleted for swearing. Poster suspended for a week.]

Jt,

Bye Bye.

"Is it possible that the Korean GOVERNMENT took action in the economic interests of their countries and ensured that certain target industries were 'helped' assisted PROTECTED.... etc. to get to the point they are in now ?" - BOAZ_David

Just over 20 years ago, Finland was an agricultural backwater dependent on trade with the Soviet Union. Today, the country's key economic sector is manufacturing - principally engineering, telecommunications, and electronics industries. Finland's development into a manufacturing hub is a result of government guidance. The Finnish government's national innovation system has rapidly transformed this small nation into the most competitive country in the world. I see no reason why Australia can't emulate such policies to prevent the complete collapse of our manufacturing sector.

I also believe that Australia needs to understand that it is very possible to develop a competitive advantage in areas where there is no history of comparative advantage. If anything, our comparative advantage in primary goods has made us too complacent. An interesting example - the car industries of Japan and the United States. Japan had the world's most expensive raw materials and fuel, while the U.S. had among the cheapest - a clear comparative advantage to the US. But who won? The Japanese. They broke the rules by turning to competitive advantage, creating the world's most fuel efficient vehicles, faster and lighter per unit of cost. The manufacturing processes were far more fuel efficient too. Today, Toyota is booming while GM and Ford face worrying long-term prospects.

Oligarch, you delude yourself if you think that government has a beneficial effect on industry.

"Just over 20 years ago, Finland was an agricultural backwater dependent on trade with the Soviet Union. Today, the country's key economic sector is manufacturing - principally engineering, telecommunications, and electronics industries. Finland's development into a manufacturing hub is a result of government guidance."

Nokia - the company - has been the driving force behind the transformation of Finnish industry. It was not the result of a government innovation programme, nor did it benefit from either government intervention or protection.

"The Finnish government's national innovation system has rapidly transformed this small nation into the most competitive country in the world."

Pure imagination. Nokia came first, government "strategy" (i.e. massive departments of public servants who believe they know better ways of doing things, despite all the evidence) followed.

It is unfortunately a habit of governments throughout the world to claim credit for the success of business, even when they have had nothing to do with it.

(Fascinatingly, they are always very quick to distance themselves from failure, blaming management and drawing attention away from the multiplicity of disincentives and roadblocks they create that contributed to the failure.)

Governments such as ours cannot nurture innovation with policy, only stifle it with regulation and taxation. The reason is simple: no-one in government has any experience at all in running a company. Even Turnbull was only ever a lawyer and an investment banker, not a real businessman.

Rest assured, Australian business will survive, but be just as certain it will be as the result of individual vision, not a government programme.

I would agree with you Pericles.

Governments are like surfers, they ride the waves.

They claim the honours but the strength of their performance is entirely dependent upon the swell of innovation and entreprenuerial expertise on which they ride just like the behaviour of the ocean makes the surfer (or not, on a flat day).

Oh oligarch, whilst I would agree with the sentiment of much of your post I suggest go read www.nokia.com. They have been around since 1865 and have had a developing background in electronics since the l960s and in radio-telephones in particular.

The role of government should be that of "umpire", crafting the rules of conduct and ensuring those rules are obeyed (compliance).

Government does not innovate, individuals do

Government are not elected or authorised to take commercial risks, individuals, through joint stock companies do.
The reward for risk is profit, that too is the sole preserve of private entities. When Government gets into business, the first thing which disappears are the profits as the politicians protect their election base by ensuring their electorates are feather bedded.
The long term result of feather bedding, skilled workers are not available for innovative real work, the entrenchment of the feather beds produces only a massive social cost by taqx payer subsidy to be borne by those not in feather bedded jobs.

In order to reinvigorate Australia's moribund manufacturing sector, the Federal government needs to play a pro-active role. In addition to support for export industries, the government needs to introduce policies across the areas of education and skills development, support for industrial research and development, protection of intellectual property, access to venture capital, innovative management, government purchasing policies, and social assessment of new technology.

However, it seems such an approach is still being opposed by economic neoliberalists who vehemently assert that governments should instead trust the "magic of the market". However, the decline of Australian manufacturing demonstrates that this approach has failed. If Australia continues down this misguided path, we will become an economic backwater, struggling to carve out a poor living from our declining resources. By this stage, the only asset left to strip will be the land itself.