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.