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Why is everything made in China?

Why is everything made in China?

Have you ever thought why almost all European and American hi-tech companies offshore the production facilities to China? In doing so, these companies leave severe unemployment in their countries killing entire sectors of economy.

This is traditionally explained by economical considerations, e.g., in China the salaries are low and production is cheaper but think of a small percent of salaries of few conveyor workers required in the cost of a high-tech gadget. The manufacturing of electronic boards is highly automated. Besides, salaries are low not only in China.

According to another explanation, the Chinese are very hard-working and dutiful. However, this is also not right. The Chinese, spoiled by communist propaganda, are very unorganised and love easy pickings, requiring permanent strict control in order to provide the satisfactory result. That is why the quality of products made in China is generally low and can be enhanced only by permanent control.

Indeed, why ever China?
The matter is that rare earth metals are used in the production of any modern high-tech product. In particular, in iPad there are at least 17 of them (the exact figure is unknown because Apple treats such information as highly confidential): lanthanum is used in Li-Ion battery of a tablet computer, neodymium alloy is used in side magnets for attachment of smart cover, ceric oxide is used in polishing of the screen glass cover, etc.

And the most interesting fact is that 95-97% of all rare earth elements in the world are extracted in China! And finally: China does not allow exporting unprocessed rare earth elements; they can be exported only in the ready products manufactured in China.

This is the explanation of Chinese monopoly in the production of high-tech equipment. It passes understanding how the world admitted such an outrageous disproportion in economical relations. It seems that the world has just woken up: an American company Molycorp and Australian Lynas Corp are planning to start their own extraction of rare earth elements only by the end of 2012. And it is just planned!

Even if the companies manage to organise the extraction, they will not meet the production demand as the annual demand for rare earth elements is 136,100 tons (2010 data) and it is satisfied by China exclusively. The West does not have a chance to organise own production of computers, smartphones, tablet computers, media players, GPS-navigators, and other high-tech devices in the foreseeable future either domestically or outside China at all.

You must admit that this information helps to see the real correlation of forces in the global economy in a new light. China makes the whole world dance to its tune.

  • 24.07.2013
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