News Archive - Page 6 of 12

It´s pretty hard to find anyone who hasn´t heard about the virus in China. Although this country is far away, we can feel the destructive influence of Corona already in Europe. In today´s news many merchants declared that soon we may find ourselves in the situation, where there are no goods in our stores anymore. Chinese economy is in a pretty bad shape. Many factories are not working, stock market is falling, whole cities are put in quarantine.

This situation is affecting roughly those European companies that have put all their eggs into Chinese basket, which means that they usually buy most of their goods, components, materials etc. from China. Current situation means that they have to find some kind of alternative from Europe. When doing that, they are faced with a different challenge, that makes them growl – European products are damn expensive compared to Chinese produce. I do encourage you not to ask why is it expensive in Europe, but to ask, why is China cheap?

First of all, China is the second biggest economy in the whole world. Their economy is built on manufacturing . Their strategy is maximum production with minimal cost no matter what. It is a well-known fact that the more you can produce, the cheaper is the unit price. That same cheap price is what attracts Europeans like moths to a flame.

Now I´ve come to my second point. China can manufacture in such huge volumes, because this is a communist country where the government commands, hangs and shoots. The authority is the one who is granting support to factories, so they can maximize their export. The same do´s and don´t, I mean rules, that we live by, do not apply to them. If you wish to manufacture goods here, you are faced with huge amounts of bureaucracy. And if you can´t make it, then nobody cares. Only the strongest will survive in the the free market economy. The government does not rush to help you if you´re in trouble. You will close your doors and that´s it, good bye! That´s where Chinese factories have competitive advantage – state aid! The overall costs to production are in general much higher in Europe and that´s why the products cost more as well. To be able to meet the environmental requirements only, our companies have to spend more resources. We can´t just pollute the air with greenhouse gas and send our wastewater straight to the sea. No! We have to produce in a sustainable way. Or do you want us to walk around with face masks not to breathe in extremely polluted air?? Let´s leave a little green grass, blue sky and fresh air to our children, please!

And now one of the most obvious reasons. Our labor costs are much higher than in China where the use of slave-or children workforce is not uncommon. We all want to earn a fair wage and to provide for our families, but we can´t, if there is no money. Just think about it! Where should the money come from if we keep buying from outside and sending our resources to China?

If we keep doing it, what will the future be like? There are already many factories in Europe that have to close down because of aggressive and cheap overload of Chinese produce. How can we think about developing our economy and expect growth if we ourselves don´t invest in it? We literally support a communist country with our money.

The current dangerous situation is a red flag that shows us what we have done already. If we keep pouring money to China there won´t be any alternatives left. If they fall, you fall. When we don´t have factories here that can offer you an alternative, then you have to close your doors too! What will you do when there´s a next virus outbreak or a disaster? Who will you turn to? What is your long-term stragegy? This is a clear warning that we should act on now. We need long-term partnerships between European manufacturers.

Don´t be naive thinking it´s just overreacting and there are factories and companies who do it differently, sustainably. Is there? Are you sure? The current situation shows us well how Chinese government works. Instead of helping their own people , they literally tried to cover up the outbreak of the Corona virus, not to lose face and position in the international arena. It makes you wonder – What else have they been covering up? A simple google search gives you many stories about how companies who have done business with China, have been cheated and lied to.

Think about it! Do we want to continue on this course where we support others instead of our own?
Do we want to support a country that is one of the biggest polluters in the world, a country that uses child workforce in inhuman conditions? I encourage you to really take time and think about where you are investing your money. If we want Europe to be the future, we have to invest here, produce here and encourage our economy. You vote with your money, vote for Europe!