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