Author: dannycool

Why are Chinese products so cheap?   [Copy link] 中文

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Post time 2008-6-4 22:58:33 |Display all floors
Originally posted by moskito at 2008-6-4 23:55

Why are Chinese products so cheap?

Because of cheap labor !

Because of that, some Chinese can drive Ferraris.

Whats wrong?

Nothing is wrong. This is market economy, whether you like it or not.

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Post time 2008-6-4 23:07:24 |Display all floors

Hey, I like it very much ....

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Post time 2008-6-9 13:26:48 |Display all floors

moskiti comes

moskito goes, got ZAPPED by M..
What's on your mind now........ooooooooooooooo la la....Kind Regards

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Post time 2010-12-28 16:33:44 |Display all floors

labor cost and other raw material is low

Originally posted by dannycool at 2007-4-7 17:57
I wonder why are Chinese products so cheap, why no other country in the world is able to compete with     China when it comes to cheap prices.

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Post time 2010-12-28 17:20:23 |Display all floors
Cheap labour force is the main reason for this , you know , many people are competing ,so the factory can employ a worker in a really low price...

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Post time 2010-12-28 21:36:05 |Display all floors
@previous poster:
I agree - the vast and easy availability of unskilled workforce is making uneducated Chinese workers very cheap (and educated doesn't mean having visited college - it means being able to actually produce something of value). However, well educated workers are paid higher in China than in the west, as they are really, really scarce there. The unskilled workers in the west merely profit from their nationality - which is of course rather inefficient.

So the only thing for Chinese workers to do would be to get skilled - therefore specialize and offer their services. Of course, they can't do that as a single person - it needs a team. And of course to build up and interconnect a team, you'll need capital. And THAT is actually scarce in China (not because the PBOC is supplying to few, but because it is distributed ineffeciently and thus use ineffecitvely). Economists often use the Cobb-Douglas function to estimate the influence of capital and workforce on each other: income = Technology * (Capital)^0.5 * (work force) ^0.5
As the internet made technology available everyhwere at any time, you can set it as 1.

What can China do about it?
Make capital markets more efficient, thus allow more intstruments, allow more international capital exchange and therefore enable knowledge to float freely.

Where's the catch?
If China does that, first of all the country will find itself in a deep recession, the housing market bubble will burst, salary will decrease (but prices will fall, so people will be still able to buy more or less the same amount of things as before), there will be unemployment and the government might lose some power.
But out of this, China would emerge like a phoenix from its ashes, much stronger than ever before. However, the government can't explain that to the Chinese people and, like every government, they want the system to be stable, rather than efficient - so salaries will stay much lower than in the west during the next 30 years.

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Post time 2010-12-30 10:55:49 |Display all floors
should ask the question, why are western products so expensive, especially since they are quite inferior. ive had family members who have bought german cars and they all seem to fall apart in 3 yrs. american cars probably last 1 yr. the western quality thing is largely a myth, and if you do enough advertising to brain wash people, theyll believe anything. kind of like the whole ripped jeans phenomenon. even if Chinese products were more expensive, i'm still tempted to go with the Chinese one.

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