Good morning Chris;

Six years ago I was asked to attend a party in Silicon Valley, along with politicians and executives of many hardware companies (Intel, HP, etc). The purpose of the party was to acquaint key persons in the Bay Area with the Chinese officials who were interested in opening manufacturing plants in China. I guess the event turned out well from what I observed and continue to read and hear about this topic.

We are told that Chinese workers receive pennies a day for wages. I do not think that is true in all cases. Capitalism seems to be doing well in China as I observe through other sources. There is much we do not know.

Each week we receive a newsletter about the automobile industry and it is interesting to note how many cars are being purchased in China. Also manufacturing plants are being set up in China by automakers.

I can see China as the largest Capitalist country in the world some day. As such it will also be the worlds largest consumer of raw materials. If only 300 million Chinese are involved in Capitalism there are plenty of people left to be engaged in other economic models such as agriculture, and Communism.

I believe China will have an effect on the use and demand on the world’s oil supply and will be a tough competitor in all respects. Years ago I remember hearing the term, “Do not wake the sleeping giant”! I think we have woken that giant and will regret our actions.

Tom




>While the link between the price of gas and it's relation to the booming Chinese economy and U.S. outsourcing there is interesting and one I had not thought of before, I don't see how you can think that the Chinese can afford to pay more based on vastly lower wages.
>
>>CNN recently has been harping about the record pricing for gas in the U.S. It's the same here too.
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>>In enumerating the causes, one that is mentioned is the hugely increased demand for oil by CHINA. And of course supply/demand is the name of the game.
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>>So here we have an indirect consequence of outsourcing - the increased cost of commodities like oil on our own soil.
>>With all of the U.S., Canadian, Japanese and European manufacturing moving to China they naturally need more oil. While we should need less as a consequence is true, that doesn't really matter. This is because the price is NOT based on how much you need. Rather, it is based on 'bidding' by those who do need it.
>>Now China, of course, with its VASTLY LOW WAGES can afford to bid more. Thus we all have to pay more to get what we need, whatever the amount.
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>>Globalization is such a fine thing... corporations get richer and richer while people lose their jobs and get poorer and poorer whether with job or not.
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>>By the way, it would be interesting to see how the government tallies the "inflation rate". In Canada at least it is always quoted in the 1%-2% range annualized yet most everything I buy costs 5%-50% more from purchase to purchase (except for cumputer-related stuff).
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>>Doomer