What Are Automakers Going To Do When The Chinese Auto Bubble Bursts?

Or better yet when the Chinese seize all of there plants and assets!

hmm... jeeze that is a good question... oh wait!... I got it!... they will pack up and leave just like any other bubble bursts!

They will continue to sell in china?

lol It's too early for them to worry about that just yet.

They will run back with their tail between their legs. That will be just one bubble from them (China) that the world will have to worry about. What grows with hype will fall with hype.

The sky is falling! The sky is falling! What should we do?

I'm more concerned about abother domestic financial crisis than the Chinese consumer bubble bursting any time soon. Just like the UK handed over the SuperPower Torch to the US in previous centuries, the transition is now in progress to Asia. The only consistent thing is change.

So if the bubble burst and GM, Chrysler and Ford all hit major financial issues to massive losses overseas, you are ok with that?

"It's like the dumb kid at school that copies off the smart kid"

Remember, Germans at the begining of industalization also copied smart British kid.

"Do you remember in the eighties how Japan was going to take over the world economically?"

Japan doesn't have enough geographical and demographical resources to be a leader , this is obvious, all that hysteria in the eighties was enormous fantasy of some people and propaganda warfare.

"by about 1870 and the Germans won."

Pfff... Don't be funny, in 1870's Germany was still a backward nation, compared to Britain, Germany in 1870's was at the begining of industrialization.

[Quote]
In his report Professor Reulleaux, who represented Germany at the Philadelphia Centennial hi 1876, said:

" Li the industrial field we have met a defeat equal to a second
Sedan. A united and regenerated Germany ought to occupy the
first place in production and to surpass other nations. The
contrary has happened; German industry produces only cheap
and nasty articles. She has made no progress either in taste or
invention."
[/Quote]

"Cause and extent of the recent industrial progress of Germany" book from 1907

http://www.archive.org/stream/causeandextentof025159mbp/causeandextentof025159mbp_djvu.txt

"1885 - Karl Benz invented the first automobile"

It wasn't the first automobile in absolute terms, there were other prototypes before it, Benz car was first successful production automobile, just like Nissan Leaf is the first successful production electric car.

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I propose to reach the compromise - by 1870s Germany started quickly closing the technological/innovation/science gap and some undetermined time later it reached parity with Britain.

"just like Nissan Leaf is the first successful production electric car"

Or like Toyota Prius first successful production hybrid.

"They closed the technological gap and then opened it up big time."

That's only your subjective point of view.

If you're so stubborn, than lets look at some OBJECTIVE measure, for example GDP per capita, this is very good indicator in this case becouse Germany and UK very probably had similar natural resources then, so what's left is productivity of the people.
Tell me, when did GDP per capita of Germany significantly(or even at all) exceed that of Britain?

"German exports: $1.337 trillion (2010 est.)
United Kingdom exports: $405.6 billion (2010 est.)"

So what that Germany have higher exports? Germany has also a lot higher imports, $1.120 trillion versus $0.546 trillion. If you're exporting manufactured goods you need to import a lot of raw materials, and then you reexport these raw materials together with value added. The figure of exports doesn't tell you how much is value added and how much is reexport of raw materials. If you're exporting mostly services, like the UK, you don't import as much raw materials, you have lower imports and exports, but VALUE ADDED may as high as in Germany. So what's left in pocket of British exporter may be the same as in pocket of German exporter.
Another hipotetical example, Germany exports 10 dollars in finished good and Britain exports 5 dollars in finished good, but germany import 8 dollars in raw materials to make it and britain imports 3 dollars in raw materials to make it, Germany in this hypothetical case higher value of exports but it doesn't matter becouse in both cases value added is 2 dollars.
So, the conclusion is that the value of exports isn't showing the VALUE ADDED and isn't a good indicator.

"abcd, do these aircraft designs look familiar to you?"

Yes, but I don't want to go into individual cases, becouse this will never end. Do you think that others didn't have advanced designs? Ultimately Germans lost the war. Doesn't matter why. Their calculations were bad.

There isn't any absurd. And this time you're right, trade balance (current account balance) matters much more than the total export figure, I've always maintained this stance.

In few recent decades, after WWII, Germany may indead overtook UK, today GDP per capita between two is similar but Germany has advantage in current account balance, but Germany definitely didn't overtake Britain in 1870 or anytime soon after 1870 - look for GDP per capita or some other indicators (but not total value of exports) for proof.

On the other hand there are other countries that also overtook UK after WWII and have similar GDP per capita and cur.acc. balance to Germany, like Japan or Singapure.

So, the overall conclusion, and for what all the arguments were about, is that Germany didn't open up the technological gap a big time compared to other countries.

Qatar GDP doesn't come from productivity of it's people but from exception natural resources. Countries like Germany, Britain or Japan are pretty comparable.


Here's a good link for you since you look purely at numbers and not at what's the truth behind these numbers:
China - the biggest high tech exporter in the whole world:
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-09-025/EN/KS-SF-09-025-EN.PDF


Here's an additional link for you - GDP per capita by country in 1900:
http://bear.warrington.ufl.edu/ritter/PBFJ2005.pdf
-->look at table 2

On hind site they will treat it much the same way when the US market hit it's peak in 06', they will make the necessary tweaks to output and lay some workers off it's the nature of the business and we autoworkers know it.

There is a lot of $$ to made by this!

There is a lot of $$ to made by this!

Just thought I would point out that the pic in this article is from India, not China. Not a big deal but this is unacceptable from a site which calls itself class-leading. I notice more and more follies everyday.

"just like Nissan Leaf is the first successful production electric car"

Or like Toyota Prius first successful production hybrid.