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(Thanh Nien News)   Want to know how Chinese industry moves into a country and busts out all the local merchants before raising prices on the stuff locals used to make? What, you really do? Well, here's how the Chinese are taking over the Vietnamese toothpick industry   (thanhniennews.com ) divider line
    More: Interesting, Chinese Industry, Chinese, Vietnamese, East Europe, Lunar New Year, dried fish, key chain, red envelopes  
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1151 clicks; posted to Business » on 14 Jan 2014 at 8:06 AM (2 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



14 Comments     (+0 »)
 
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2014-01-14 09:21:31 AM  
Is this another Walmart thread?
 
2014-01-14 09:23:57 AM  
China can drive companies out of business in poorer countries? That is scary.
 
2014-01-14 09:53:22 AM  
But my micro economics professor told me that this would NEVER HAPPEN when I brought it up in the intro econ class. It was *IMPOSSIBLE* for a large company with big cash reserves to intentionally undercut competition and operate at a loss until all local competition was driven under, then jack their prices up to higher than before, "Because Game Theory".

/Or maybe it was macro economics?
// It filled a graduation requirement and was so divorced from reality that I admit I stopped caring.
 
2014-01-14 09:57:39 AM  

Arkanaut: China can drive companies out of business in poorer countries? That is scary.


The way China is structured, it's more helpful to think of the country as one giant corporation.  It doesn't have a global monopoly per se, but due to pervasive state ownership it can throw the full weight of a large country behind any single economic endeavor.  So yeah, they can topple smaller countries with impunity without firing a single shot.  Almost as effective as America's use of the military to benefit corporations in the earliest 20th century, without bad press in the age of the Internet.

They're hardly an exception.  If you live in Mexico or Brazil, whether or not your business is successful largely depends on whether or not you're on the government's good side.  America itself passes bills of attainder whenever they can get away with phrasing one loosely enough that it doesn't get ruled unconstitutional -- and they're very, very good at it.

The moral of the story here isn't "ooh, China bad".  It's that as far as social cooperation goes, for all the complexity of various economic and infrastructural systems, humans have yet to advance beyond the sophistication of ants.
 
2014-01-14 11:19:46 AM  
Freaking communists.
 
2014-01-14 11:40:25 AM  

This just in: Vietnam discovers that China sells cheap crap to folks unwilling to care! News at 11!

 
2014-01-14 12:07:59 PM  
What China is proving is you don't have to be physically IN it to dominate it. Look at computer parts. I can get a laptop charger, say, from China off ebay for $8, no shipping and it's here in four days. Same part here is $80 -$100 or more. In some cases it's even faster because you can get the part faster than the store can. There's really no difference in quality or durability. As a result, peripherals have become throwaways and they used to be a huge profit center for stores and manufacturers.

China treats their export industry like an army of the military. That store can undercut everyone on price, have China Post take care of free delivery and the government will reimburse them for any actual loss incurred making and selling the chargers, with a nice profit added. Slave labor is also available to contain personnel cost centers. Try and compete with that.
 
2014-01-14 01:39:02 PM  

Snowrise: What China is proving is you don't have to be physically IN it to dominate it. Look at computer parts. I can get a laptop charger, say, from China off ebay for $8, no shipping and it's here in four days. Same part here is $80 -$100 or more. In some cases it's even faster because you can get the part faster than the store can. There's really no difference in quality or durability. As a result, peripherals have become throwaways and they used to be a huge profit center for stores and manufacturers.

China treats their export industry like an army of the military. That store can undercut everyone on price, have China Post take care of free delivery and the government will reimburse them for any actual loss incurred making and selling the chargers, with a nice profit added. Slave labor is also available to contain personnel cost centers. Try and compete with that.


We won't have to in 20 years when half of their workforce is too old to work.
 
2014-01-14 01:49:50 PM  

edmo: Is this another Walmart thread?


I've been hitting this tab less recently because every thread is a Walmart thread.

/we get it; you hate how they treat visible employees so you order from Amazon instead. Way to solve the problem!
 
2014-01-14 02:25:09 PM  

Felgraf: But my micro economics professor told me that this would NEVER HAPPEN when I brought it up in the intro econ class. It was *IMPOSSIBLE* for a large company with big cash reserves to intentionally undercut competition and operate at a loss until all local competition was driven under, then jack their prices up to higher than before, "Because Game Theory".

/Or maybe it was macro economics?
// It filled a graduation requirement and was so divorced from reality that I admit I stopped caring.


So, your professors sucked, and you can't tell the difference between micro and macro.

Uh...

You know, telling the difference between micro and macro, is like, there's books.

Wtf. is your point?
 
2014-01-14 02:30:20 PM  
I almost bought some bamboo toothpicks the other day at Truong Son Asian Market. I'll have to check the next time I go there to see if they're genuine Vietnamese or cheap Chinese knock-offs.
 
2014-01-14 02:38:27 PM  

Felgraf: But my micro economics professor told me that this would NEVER HAPPEN when I brought it up in the intro econ class. It was *IMPOSSIBLE* for a large company with big cash reserves to intentionally undercut competition and operate at a loss until all local competition was driven under, then jack their prices up to higher than before, "Because Game Theory".

/Or maybe it was macro economics?
// It filled a graduation requirement and was so divorced from reality that I admit I stopped caring.


Did you factor in the Chinese government floating the company while they hold their prices low? Because thats what is going on a lot of the time.
 
2014-01-14 03:16:53 PM  

Felgraf: But my micro economics professor told me that this would NEVER HAPPEN when I brought it up in the intro econ class. It was *IMPOSSIBLE* for a large company with big cash reserves to intentionally undercut competition and operate at a loss until all local competition was driven under, then jack their prices up to higher than before, "Because Game Theory".

/Or maybe it was macro economics?
// It filled a graduation requirement and was so divorced from reality that I admit I stopped caring.



I'm guessing your professor's "game theory" hypothesis is that consumers will purchase from the small company, knowing they'll be better off in the long run.  The problem with that is it assumes consumers have perfect information, and that they plan farther ahead than a goldfish.

And yeah, it was probably micro.
 
2014-01-14 05:05:05 PM  

Szech: Felgraf: But my micro economics professor told me that this would NEVER HAPPEN when I brought it up in the intro econ class. It was *IMPOSSIBLE* for a large company with big cash reserves to intentionally undercut competition and operate at a loss until all local competition was driven under, then jack their prices up to higher than before, "Because Game Theory".

/Or maybe it was macro economics?
// It filled a graduation requirement and was so divorced from reality that I admit I stopped caring.


I'm guessing your professor's "game theory" hypothesis is that consumers will purchase from the small company, knowing they'll be better off in the long run.  The problem with that is it assumes consumers have perfect information, and that they plan farther ahead than a goldfish.

And yeah, it was probably micro.


relevant
http://www.youtube.com/watch?v=YlVDGmjz7eM
 
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