CHINA’s NEW GREAT WALL OF …..

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CHINA’s NEW GREAT WALL OF …..

 user 2006-07-27 at 11:51:00 am Views: 57
  • #16106

    Chinese Growth Hurdles toward a New Great Wall
    China’s
    unique capitalist/marxist hybrid manufacturing-based economy has grown
    at an eye-watering rate for the last three decades. While economists
    have predicted a leveling off in its awesome rate of growth for a
    multitude of reasons, viz, infrastructure, rising labor costs and the
    like the Chinese miracle has continued completely oblivious to such
    warnings. Serious trouble for China is on the way, though, from a
    completely unexpected direction created by hacker technologists who had
    no intention of causing it.
    The “capitalization” of Chinese industry
    during the last quarter of the 20th century is strikingly similar to
    what occurred in the American agricultural sector a century before.In
    the last quarter of the 19th century America’s rapidly expanding
    railroad network put vast areas of new farmland in cost-effective range
    of both expanding metropolitan areas in the US and its export harbors
    serving European markets. This was very fortuitous for Europeans in
    that their farmland was largely exhausted and it would be some time
    before German chemistry invented inexpensive, ammonia-based
    fertilizers.It was at that time that corporate farming in the sense
    that we know it today first appeared in the US. These large-scale
    farming operations were predominately found in the new lands of the
    Dakotas and Iowa which were possessed of rich topsoil hundreds of feet
    thick deposited there by the glaciers of the last ice age. These
    corporate farms were vast in extent, heavily mechanized and employed
    hundreds and sometimes thousands of laborers. The Dakotas and Iowa were
    that era’s Saudi Arabia of food production. They could put grain and
    meat on European tables for pennies on the dollar of what it cost
    European farmers to produce. Exported American foods let Europe avoid
    famine and poverty and might have staved off Europe’s collapse as a
    civilization.Rich, hitherto untilled soils were not the only reason for
    American corporate farming’s economic success. Its emergence and market
    domination was also made possible by the invention of steam-powered
    farm machinery. These machines were huge for that time and capable of
    efficiently farming very large tracts of land. This machinery was also
    expensive and its sassy steam technology required skilled personnel to
    be operated safely. Its very nature demanded large, well-organized
    operations, the antithesis of small family farming enterprises.It is
    shocking, therefore, to discover that within thirty years these large,
    highly profitable corporate farms had almost completely disappeared.
    Why? The answer lay in the development of practical, internal
    combustion engines coupled with the opening of American oil fields that
    provided their liquid fuels. Their horsepower/lb ratios were immensely
    better than equivalent steam engines. Internal combustion was much
    cheaper, safer and less technically demanding of farmers than steam had
    been.The most important advantage, however, lay in their scalability.
    The technology of soils preparation, tilling and harvesting had been
    developed around the horse and a power supply. These technologies had
    been scaled up for steam and readily scaled down when smaller internal
    combustion engines came on the market. Internal combustion engines
    largely eliminated the economic advantages that large farming
    corporations over family operations. They disappeared for many decades
    thereafterChinese manufacturing will be facing in the next decade or so
    much the same problem that late 19th century American corporate farms
    faced. Its success thus far has been a result of having access to a
    large, disciplined and relatively inexpensive labor force and access to
    international capital to invest in large, expensive manufacturing
    production lines. That is about to change in a rather dramatic
    fashion.When you look at a typical “high tech” consumer item coming out
    of a Chinese factory dispassionately you quickly discover that it is
    mostly air and enclosure. Take a laser jet printer, for example. Over
    90 percent of it is plastic and air. The actual “high tech” parts of it
    will fit nicely in a small, zip-lock bag. The cost of those “high tech”
    parts will typically be less than 20-25% of the cost of the printer.
    What you are buying is mostly volume and appearance.The Chinese
    economic miracle would have been impossible without the transportation
    revolution made possible by containerized cargo carriers. This
    technology made it cost-effective to move such low-density cargo as
    consumer appliances.When you visit a factory that makes such consumer
    items what strikes you most forcefully is the sheer size and power of
    the injection molding machines that make the housing for those
    appliances. An injection molding machine capable of producing an ink
    jet printer’s plastic housing will fill the better part of your home.
    It draws hundreds of kilowatts of electrical power and requires skilled
    personnel to operate and maintain. It can product many thousands of
    such housings per day. They can cost millions of dollars. Is this
    beginning to sound familiar?What are known as 3D prototyping machines
    are rapidly becoming a David to large injection molding
    machines’Goliath. 3D prototyping machines began to be seen some thirty
    years ago. At that time you typically saw them in the aerospace
    industry making models of complex parts in critical parts of aircraft
    such as turbines. The machines were expensive as was using them. Since
    then, however, the technology has leveraged CNC (computer numerical
    control) technology and gradually come down the market pyramid to the
    point that you can now buy a full-blown system for about $30,000 that
    can produce prototypes for under US$2.00/cubic centimeter (US$30/cubic
    inch). While this sounds rather expensive, it is worth noting that the
    famous Lockheed “Skunk Works” that produced such aircraft as the U-2
    and the SR-71 spy planes and the F-117 stealth fighter has recently
    adopted 3D prototyping in a manufacturing mode to produce their newest
    unmanned spy plane, the Polecat at a fraction of the cost that it could
    be built on a conventional production line.All this would be a bit too
    up market for such everyday items as your ink jet printer save for one
    thing. When someone mentions “open source” thoughts inevitably go to
    software like Linux. While products like Linux get the press thousands
    of hackers have quietly been building quite a respectable open source
    hardware presence. One such team of hackers are busily producing an
    ultra cheap, open source 3D prototyping machine. The RepRap (Rapid
    Replicator) project directed out of the University of Bath in the UK.
    RepRappers are currently in an advanced stage of working the bugs out
    of their first open source prototyping machine in New Zealand. Their
    machine is on target for a build price of about US$400 and will be
    capable of making objects for about US$0.02/cubic centimeter. That
    represents a considerable slide down the market pyramid from their
    current commercial competition. Their development systems will easily
    fit on the top of your kitchen table.The truly revolutionary aspect to
    the RepRap 3D protyping machine is that it can more or less make copies
    of itself save for that small Ziplock bag of “high tech” items like
    small motors and cheap integrated circuits all of which have long been
    commoditized. This means that you do not need a conventional factory to
    make it. It can make itself. It can diffuse over a society in a viral
    manner like peer to peer file sharing rather than a serial manner like
    conventional consumer appliances. It also means that anybody can start
    a manufacturing company for US$400 and scale it up and down to match
    their production levels.While a RepRap protyping machine can not reach
    production levels of a conventional production line such as those that
    China has invested so heavily in during the past few decades it can,
    for example, make the parts for five very different appliances one
    after the other with no retooling or setup time whatsoever. Short
    production runs now means one-of-a-kind rather than several thousand.
    The concept of the RepRap machine is not known as the “Santa Claus
    Machine” for nothing.Open source consumer technology can be expected to
    share the same characteristics as its software cousins such as Linux.
    Can you, for example, imagine an open source ink jet printer that
    requires ink cartridges that cost nearly as much to replace as it would
    cost to buy a new printer? More than a few industrial business models
    are in for some very hard times.China, with its heavy emphasis on low
    cost manufacturing is headed for big trouble economically. So are
    consumer appliance manufacturing industries elsewhere.