Quote Originally Posted by Bill Moore View Post
Yep, pretty soon it will be a good idea to start investing in American manufacturing companies, maybe China will no longer be able to produce steel and toys at a competitive price?
China has lower production costs and they artificially deflate their currency to support the export sector. Also, they don't tax factories set up only for export, and make it difficult for them to sell domestically. http://www.nytimes.com/2009/01/01/bu....html?emc=eta1

In open market economies, mature countries can't compete with developing ones in cheap, mass-produced goods. Singapore, who made lots of money in cheap electronics realized this and is investing heavily in a transition to biotechnology. With high barriers to entry like the need for expensive precision equipment, they eliminate the competition from low-cost places like Malaysia.

High oil might hurt china some, but with the amount of goods that we import, we would have to foot much of that bill anyway.

There are certain sectors that we have retain for national security reasons, but for the US to compete in exports, we will have to rely more on "soft infrastructure" industries like business processes, consulting, as well as more technology-intensive businesses.

Ironically China is going to have some of these same problems as its standard of living improves, which is why they have to deflate their currency.