Thursday, October 13, 2011

Well, that's a different take.

From this week's Chemical and Engineering News, an interesting letter: 
Up to this point I have, over the past three-plus years, silently read the numerous letters written to the editor of C&EN bellyaching about the “outsourcing” of U.S. jobs overseas. The authors of these letters stand behind a common misconception that the jobs are merely going to locations with cheaper labor. This gross oversimplification is, at best, only partially true. 
China is the recipient of the majority of these “outsourced” chemistry jobs, and the true motivations for this far eclipse just the economics of employee compensation. First, China is an enormous emerging market, far larger in potential than the West. Second, it is virtually impossible to import finished products into China. Companies are moving chemical research and manufacturing into China to better position themselves to fully develop and capture sizable portions of the huge and emerging Chinese market. It will be far easier and far cheaper for these companies to export products from China into the West than it would be to attempt the reverse.
In order for the lost jobs to return to U.S. soil, a number of things must come into alignment: U.S. corporate tax structure must change; U.S. import/export laws must change; China’s market must become fully developed; China must change its import/export laws for the benefit of foreign nations; and, as has been pointed out previously, employee compensation must become more competitive. If you are one of the people writing letters to editors and waiting for these changes to occur, I sincerely wish you the best of luck. Personally, I’ll be taking a different path. 
Michael C. Matelich
San Diego
I can't quite tell what Dr. Matelich's different path might be. I suspect that 1) he's going to China or 2) he's picketing Congress or writing letters to the President or I dunno. (I suppose that, for now, blogging is my path.)


  1. "it is virtually impossible to import finished products into China"

    Is this still true? I thought that fixing this was a condition of WTO entry. They are the worlds second largest importer, that can't all be ore and oil.

  2. Well, there was a China trade bill that just got passed in the Senate (of course it will go to the House to die, they're busy talking about abortion again).

    Why is China the one who has to change their trade policy. Isn't there something we could do domestically?

  3. Probably. "U.S. import/export laws must change" is how Matelich puts it.

  4. You're PfizeredOctober 13, 2011 at 12:06 PM

    Several of the Republican candidates have been spouting a hard-line on Chinese trade, saying that things need to change, and would be willing to 'go to war' with China over it. I'm assuming they mean a trade war, not a land one...

    Either way, stock up on your t-shirts and tube socks....

  5. I have a friend in Vietnam who's willing to smuggle out a few diagrams and blueprints for making tube socks -- know anyone in the US who's interested in making a few thousand?


  6. More reasons for going to China: the lack of hazardous material transportation regulation, employee disability compensation, procedures for handling/disposing hazardous waste and the like. As long as you grease up the local party officials and their friends and avoid blatant screw-ups, you won't have to worry about safety and enviro inspections from government, and they will lock up for you any trouble making-employee free of charge.

  7. Matelich's Path:

  8. Yeah, I heard a story recently about a "cancer village" in China, where almost everyone still living in the village had cancer (I think from Cr(VI) but I'm not sure). This is forbidden to cover in the Chinese media.

  9. His point about using facilities in the PRC as a entry point to a potentially big market is, unfortunately corect, and it's a shame US politicians don't have the balls to stand up the the Chinese. Maybe if we just didn't owe them so much money.

    I guess his path is to take money from US taxpayers and then complain about corporate tax policy?

    Re "employee compensation must become more competitive" I assume he does not refer to his own compensation becoming "more competitive"?

    reminds me of morons I see on Fox News stating telling the camera they want the government out of their Medicare.....

  10. Hmmmm...manufacturing is one thing but isn't R&D another?

    I've liked some of the things Buddy Roemer has had to say about this and other things. Anyone have an opinion about this guy. I'm not sure why he hasn't gotten more exposure.

  11. "reminds me of morons I see on Fox News stating telling the camera they want the government out of their Medicare..... "

    Several chemotherapies are not currently available in hospitals in the US (at any price).

    If there are ridiculous price controls to the point medicine is no longer profitable, pharmaceutical companies have NO incentive to continue making them.

    This is similar to the waiting cues for care in the European nations. Need surgery? Get in line. Socialism in the hosptials limit the amount of care that is available, no matter how good your insurance is (or was).

    Most are now paying MORE for WORSE care under Obama's regime. Thanks Obama.

  12. But Obama will continue to fuel the myth that his plan is useful.

    Many 99% protestors are paid. They are destroying cities. Handing bags of poop to business owners in NY and vandalizing property. Many of those paid to protest are not US citizens. Almost all are discussing health care as their main 'demand'. Feels fishy, just like when Acorn fixed many local presidental races in 2008. Many DEAD or NON-CITIZENS people voted Obama in IL.

  13. ...looks like someone is drinking the Faux News koolaid...

  14. @Anonymous:

    "Many DEAD or NON-CITIZENS people voted Obama in IL."

    That's Obama's fault? C'mon, we all know the Chicago voting mantra, vote early, vote often. Maybe we need Lisa Simpson on the case to prove this?

    Speaking of "paid" protestors, looks like you may have a "paid" blogger with their nutjob conpiracy theory.

  15. Looks like the election season heats up surprisingly early on Chemjobber. :(

    Not sure how so many motives have been ascribed to this letter. Dr Matelich's statement seems pretty straightforward to me: he lists the multiple factors that are contributing to the ongoing problems, and implies that simply complaining about one or even two of them is unlikely to have much impact on the global flow of goods and capital in today's world. His closing line indicates that he doesn't see the current situation as stoppable and will change his own career direction to go with the flow, as it were. Who can blame him for that?

  16. Oooh, I can't wait until we start talking about Obama's birth certificate.

  17. You guys are slipping. If you're going to disparage President Obama on the Internet, you need a term like Fartbongo Hussein Soetero. That's how you bring the derp.

  18. The derp came without the silly nicknames.