It is time to write off China….once again

A lot of talk about China these days because of the drag the Chinese stock market is exerting on the global economy.  And there was a story last week on the front page of the NY Times about the waning fortunes of China’s low cost industrial sector in Dongguan, everything from furniture factories to a US automotive parts supplier who relocated from Alabama to Donguan several years ago. There is a nicely done video to accompany the piece.  It features a  group of disgruntled factory workers sitting around a streetside restaurant discussing labor conditions in Dongguan, and it also profiles a shoe factory worker who is returning to his home in Sichuan Province follow the closure of his factory in Dongguan.  I do not draw conclusions about the Chinese economy based on the grumblings of a few Chinese workers with a grievance against their boss, but having ridden my share of trains in China over the years,  I really enjoyed watching the video. Here is the link   China NY Times video

If you read this article or watch the video, it paints a pretty bleak picture of manufacturing in China nowadays, especially in the low cost south.  But when I think back to my first blog post six  years ago, on the industrial slump in Dongguan, which at that time looked very real as the entire world was reeling from the effects of the Global Economic Crisis, I realize that this is just another one of those periods where people are writing off China because Chinese GDP is down and/or there is a stock market crisis in China. There is a small element of China bashing in all of this.  In fact, I have talked with probably 200-300 small companies over the past 6 years, in a myriad of industries, and a great many of them currently have production in Dongguan or adjacent areas.   In other words, although many factories have shuttered, there are still many more to take their place.  Just for some perspective, here is that first blog post.  First blog post

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