In the wake of Ebola, NVD-68, and Zika, we should have all learned our lesson by now. We haven’t. This is 2020—Iowans took a week to count the votes of 5% of their population, and an elderly white Northeastern president is principally opposed by a gaggle of downright ancient white Northeasterners. There aren’t any quick fixes for emergent idiocies like those, but a few simple heuristics will go a long way toward avoiding panic over coronavirus.
To greatly condense something I wrote a while back, it’s not like the movies. Obliteration, as it turns out, is not to be expected, and isolation is strikingly maladaptive.
This epidemic is massively multifactorial and substantially driven by local Chinese conditions, including population density a full order of magnitude higher than that of the US; far poorer sanitation; a massive travel season of (ordinarily) 15 days, like Thanksgiving Day weekend multiplied by 4; a possible genetic susceptibility in the form of more RNA receptors in the lungs of Chinese males; and scary-looking hospitals. The global pandemic risk, if any, is to other countries with similar elements. The US is about as dissimilar as it is possible to be.
Ignore specific news stories. The news media are riddled with structural biases, the most relevant of which are temporal bias, bad news bias, and narrative bias. In any case, most journalists (and their editors) are effectively innumerate.
Instead, track airline and travel stocks, and compare the broader Chinese and US indexes.
Jay’s Stuff-Hits-The-Fan Index is comprised of AAL, DAL, LUV, UAL, BKNG/10, EXPE, and TRIP, as measured at market close each Friday afternoon in the US. It nosedived in early November, partially recovered, dropped again (but not as steeply) in late January, and is now recovering again.
The Wilshire 5000 has gained nearly 20% relative to the SSE Composite since early October.
From these comparisons, it is easy to see that China will be hit much harder than the US, to the extent that the US is affected at all.
Your concern should be over anyone you know in China, especially in Hubei but also elsewhere, if only for the economic impact to their livelihoods. In that connection, this interview of Francis Collins by Andy Serwer is worth reading—or even watching in full to grasp just how effective a communicator Collins is.
More broadly, we should all give some thought to what happens if this stresses the regime sufficiently to plunge China into a crisis comparable to the huge rebellions of the mid-19th century or the warlords and Japanese invasion of the early-to-mid-20th. Adherents to Strauss-Howe generational theory, myself among them, are wondering if the Chinese aren’t just about due.
But remember, anyone trying to badly frighten you over what might happen in the US from 2019-nCov does not have your best interests at heart. Treat them the way you would someone who is, say, attempting a carjacking. —Although, to be sure, most of them will be the sort of carjacker who turns out to be unable to drive a stick-shift.
As I wrote here back when they had just locked down Wuhan, China’s words and deeds are completely irreconcilable.
I hear and agree with every point that panic is completely uncalled for.
And yet China is panicking, and has been from day one.
I have no idea how to guess about what can explain that. This is not a regime that cares about a couple hundred–or orders of magnitude more than that–of its peoples lives.
PS. You can’t blame the media in this instance. If they wanted to they could be plastering videos everywhere of not just Chinese authorities in biohazard suits, but American soldiers wearing full pressure suits on flights of Americans out of the country. The media performance is sort of a dog that didn’t bark in this, another data pount to make you wonder what the heck is going on below the surface.
I agree that the health panic seems to be overblown outside of China and it’s hard to even tell how the actual conditions in China compare with a bad flu year. The population seems very prone to fads and hysteria and the government to over reaction.
The biggest problem will be a large number of Westerners that are economically dependent on either supplying commodities to China or timely delivery of components from China. I expect we are about to badly surprised to find out just how dependent various sectors are on Chinese components.
As an example: Relatively few integrated circuits are actually made in China and they tend to be simpler commodity chips. But, a large portion of the circuits produced elsewhere are packaged there and virtually all are packaged in S.E. Asia and even the packagers outside of China use packaging components from China. The ones that don’t celebrate the Lunar New Year will have laid in extra supplies to cover the holiday that will be running out soon.
On the “20’s” thread it was brought up that China is a major supplier of chemicals that are used to make drugs in the rest of the world. I’m sure the list of vulnerabilities is far longer than I know.
At least for now it doesn’t look like this virus will kill you but it may very well make you poorer.
There is something distinctly odd about the Chinese response to this whole thing, compared to their relatively lackadaisical response to SARS and the swine fever problems. I don’t trust a single damn thing coming out of China, with regards to numbers or sourcing for this outbreak.
I’ve no idea what is going on, but the signs of an authoritarian government responding to something it knows more about than it is letting on are quite clear. China has never before locked down and quarantined to the extent that they are now, and you have to wonder what the hell the elite in Beijing know that they’re not telling us about all this.
Wuhan is where they chose to locate their newest virology labs, and where Canadian researchers were sending disease samples from the universities up there. It’s also where US researchers had established satellite operations. The latest FBI busts at Harvard are tied to Wuhan, as well.
Throw those data points up on a wall, make some connections, and I cannot help but reach the conclusion that there is something going on here that we’re not being told the truth about.
I have to also wonder if someone didn’t screw up, doing bioweapons research. If that’s the case, then there’s going to be hell to pay, and it’s even possible that the disease is designed to do what it’s doing right now, which is get around containment. The Chinese went awfully hard, awfully early. Given past performance, and their demonstrated inability to learn from experience, I find it… Interesting, that they went so hard and so early on attempting to contain this. It’s almost like they had an idea of what they were dealing with. I could easily see a scenario that had the virus escaping containment, early denial by the researchers, then once it broke out into the general population, someone started asking questions and got some answers. The early days of the epidemic, it seemed like Chinese SOP denial was in effect, and then something changed. You have to wonder what, at this point.
I’m just looking at the things the Chinese government has been doing, and asking “Why this, why now?”. I have no idea about the biology of it all, or the disease process, but the political response to all this has some features we can analyze and ask questions from. It may be that the virus will have limited effect outside China, but I would not count on that, particularly if the damn thing was designed as a bioweapon–Which is not entirely outside the realm of possibility. Unlikely? I would hope so, but you can never tell.
Of course, with the characteristics of it being almost tailored to have the most effect under uniquely Chinese conditions/environmental factors…? Who the hell knows? Random chance has a way of working for Nemesis.
“I agree that the health panic seems to be overblown outside of China”
I don’t see any sign of any panic in the West. Which I do kind of find odd.
“it’s hard to even tell how the actual conditions in China compare with a bad flu year.”
The flu kills ~100k in China every year. And yet for ~20 deaths from coronavirus they “quarantined” 50 million people. Does that make any sense to anyone?
Either the outbreak was at that time much, much worse than they were saying, or they knew it was going to be. The latter possibility is scarier than the former.
I have to agree that the Chinese government’s reaction is out of proportion to the published magnitude of the outbreak. One idea that crossed my mind was that this was a test to see if this sort of response could contain a viral disease. It’s hard to reconcile that with the initial jailing of the doctors that noticed something was going on.
Researching bio-weapons in the middle of a densely populated city seems insane, they have a large selection of uninhabited space. Certainly, some sort of accident isn’t ruled out. The human genetic engineering fiasco indicates that there are more cowboy scientists willing to take insane risks for the promise notoriety with equally shoddy technique.
If it is a bio-weapon, it seems targeted directly at China. I doubt there is any place in the world that the population spends more time literally rubbing shoulders with thousands of others or where such a large proportion of the people will scatter in unison to the far corners of the country in jam-packed trains and planes for a single holiday. The timing couldn’t have been worse.
If you are trying to develop a bio-weapon, you don’t need, or probably even want, a novel pathogen. What you need is a way to direct the weapon and protect your own personnel. Without that, you don’t have a weapon.
Given the incompetence and corruption of all levels of the Chinese government, rational analysis has very limited if any usefulness. I’m afraid that we will all just have to wait and see.
Back of the envelope, just based on population and lifespan, about 45,000 people die on any normal day in China. How would one even notice a couple of hundred extra from this virus? The response in China does seem unnecessarily vigorous.
One hypothesis is that the virus is really, really infectious. But the limited number of cases involving onward infection from people who left China before the shut-down does not seem to support that. And the limited information from China suggests the virus is not particularly deadly anyway.
Another hypothesis is based on the Democrat idea of “Never let a crisis go to waste”. The Chinese government could simply be taking advantage of this situation to test their own crisis response protocols — and perhaps to learn about potential vulnerabilities in other countries’ responses.
Yet another hypothesis is that this could be a way of getting some real world data about the potential efficacy of a future bloodless economic war. If shipments from China (the Workshop of the World) dry up, how long will it be before the lack of Chinese components cripples the Just-In-Time West? Already, we have seen Korean car production halted, and Airbus jet manufacturing reduced. And we are learning that many of the advanced medications in the West require chemical precursors from China. We also know that China has long had a wise policy of building massive stockpiles of essential imports like oil, which could protect it from Western counter-measures.
And if we really want to get into tinfoil hat territory, what if this is not a trial run for that last hypothesis? Someone could write a wonderful novel about that! Over to you, Sgt. Mom.
Gavin, I can’t see the logic of China doing this intentionally. Between the economic vise they’re finding themselves in, and everything else? I’m just not seeing it as a planned thing. Now, if it had broken out solely in Hong Kong…? Maybe.
I think that this is only going to accelerate the decoupling of China from the rest of the world’s economies. Sure, they’ve been the “workshop of the world” for the last several decades, but this is going to serve as an exclamation mark on what Trump and his trade advisers have been saying for these last few years, and I think it’s only going to get worse for the Chinese. They’re about to find out what happens when the rest of the world decides that they’re untrustworthy, the result of which is that they are going to be routed around.
Frankly, I think this is just the beginning of the hard times for the Chinese oligarchy. If you think those videos of people being rounded up to go into quarantine camps aren’t changing some minds in China, wait until it turns out that more people wind up dying because of them. Hell, the rumors alone are going to be impossible to stamp out–I can’t see any of this ending well for the CCP.
Basically, it’s “Buh-bye, Mandate of Heaven…”. Their credibility with all this went out the window with the death of that doctor, after having put him under arrest for “spreading rumors”. Analyzed from a strictly informational point of view, they’re going to have a hard time turning this around. Who knows where it ends?
Thought just occurred to me about all this: Let us suppose that the best-case scenario happens with regards to transmission and effect of this disease outside China: What happens when the Chinese public notices that fact?
“Uh, hey… This crap that killed X number of we Chinese didn’t really do all that much harm in the rest of the world… I wonder why?”.
Two things flow from that: Instability in the Chinese political system, and a need for the CCP to do something about it all.
This will mean that if they want to retain power, they’re going to have to either come up with a huge distraction, or they’re going to have blame someone else, and make it stick.
The US needs to stay on its toes, and do everything it can to make any blame-shifting information operations as ineffective as possible. This could turn very ugly, very quickly. The CCP is going to be desperate to retain power, and will probably do some very unexpected and extreme things, should they think they’re about to lose that power.
Years ago while entering a restaurant in Xi’an, I saw animal cages lining the 20′ sidewalk leading to the door. The cages held live wild animals: snakes, possums, others I don’t remember. Apparently the inland Chinese like their meat really fresh. It was bizarre and unsanitary.
Kirk: “I can’t see the logic of China doing this intentionally.”
Agreed. But maybe we should not look for logic from human beings, and especially not from the politically-inclined subset of the human race. Just think about the supposedly intelligent educated superior people in the West who have signed up for the obvious scam of Climate Change. Think about the $Hundreds of Billions wasted in so many countries on subsidized unsustainable intermittent bird-killing windmills. Or think about the German poster child for hypocrisy, claiming they are fighting CO2 by shutting down nuclear power plants and replacing them with power plants burning dirty brown coal. The most likely explanation for what is happening in China is that the rulers are simply reacting to events.
Even though the current situation ought to be a giant wake-up call to the US to bring back a lot of job-creating tax-generating industry from China, can any of us have any confidence that our Political Class will pay attention and behave logically? Even if our politicians were cut from better cloth, it would take a decade or more to re-establish capabilities, rebuild factories, and retrain workers in lost skills.
Putting back on my tinfoil hat, one possible logical reason for China’s rulers not letting the crisis go to waste and deliberately over-reacting would be that the lock-downs and deaths provide an excellent opportunity to remove actual & potential dissidents without triggering any response internally or externally.
My father had a crack he’d make when the food was slow out of the kitchen at a restaurant: “If I knew they were going to have to kill and butcher a cow just for me, I’d have offered to Help.” I don’t think he was ever in a place like CapitalistRoader describes. Kind of gives locavore a new meaning.
I think a convincing case can be made for an inadvertantly released man-modified virus.
The main Q to me has always been what we’ll see in the west. It seems to be pretty contained at this point, which is great, but does raise questions about what the heck is making China react like this–if it’s just “a kind of bad flu” then what explains their actions? It would probably overwhelm our own system if everyone with “flu like symptoms” required testing, treatment, quarantine, etc.
a friend pointed out that professor spence, at yale, had a generational theory about china, about where revolutions and invasions came from, the north, and politics ran on a cycle of about three generations between rise and fall,
the info about how the virus originated is very spotty, some time at the beginning of December, add the two week incubation period,
Trump seems more vigorous then persons his age, or even a few other years,
Whatever is going on around Wuhan, there’s a spike in sulfer dioxide emissions:
https://twitter.com/jenniferatntd/status/1226379297507680256
Could be from crematories, could be from the disinfectants they’re pumping out–Either way, if it’s that noticeable? How many bodies are they burning? Or, if it’s the disinfectants, how much are they using, and what does that tell us about how serious they’re taking this?
China seems to be treating this about the way you’d deal with something like the Black Death, which seems to be either an overreaction to what this appears to actually be, or they know something we don’t about the virus.
On the other hand, it could be cover for removing a bunch of trouble-makers? Maybe? What better way to suppress a developing resistance movement than through something like what they’re doing with the quarantine?
What’s going to cause more problems for the CCP in the long run, with regards to their viability as the “workshop for the world” is the opacity in the information–Outsiders have no idea what the hell is really going on, so they’re going to start pulling back from investments and production in China. Which could well be disastrous for their economy, which could further trigger unrest across China as a third-order effect.
Interesting times, folks, interesting times. Buy your cheap Chinese-made goods while you can, ‘cos this is probably the period where the ocean withdraws right before the tidal wave comes screaming back in.
With regards to China’s continuing viability as the “workshop of the world” — much as I would like to see the US regain the industrial pre-eminence we had in the days of the Space Race and the computer revolution, it might not be wise to count on China losing its status anytime soon.
China has clearly been pursuing a long-term strategy. The initial attraction for Western businesses to relocate production to China was low wages. China has taken advantage of that to absorb and appropriate the best of Western technology, Borg-like. China’s rulers have deliberately invested the proceeds of its people’s hard work in what is now arguably some of the best infrastructure in the world — ports, roads, railways, airports, factories. In key areas, their technology is now equal to the best in the world — for example, no other country has successfully landed a rover on the far side of the Moon. Today, China has the modern plant & machinery, and (perhaps more importantly) the skilled well-educated workforce.
It is also clear that China’s rulers have bought the support, or at least the acquiescence, of Western Establishments. We see snippets of this from time to time, from Nancy Pelosi’s Chinese driver to Ivy League slush funds. China can be expected to use the Western influence they have bought to thwart attempts to contain them.
It took over 3 decades for China’s rulers to achieve their current position, even with the foolish assistance of Western politicians who had drunk the “Free Trade” Kool-Aid. It would take years of focused efforts for Western countries to replace Chinese imports. Unfortunately, our Political Class does not seem to be up to the task.
It is also clear that China’s rulers have bought the support, or at least the acquiescence, of Western Establishments. We see snippets of this from time to time, from Nancy Pelosi’s Chinese driver to Ivy League slush funds. China can be expected to use the Western influence they have bought to thwart attempts to contain them.
That’s why I have thought for some time that Russia and Ukraine have been diversions. What Burisma gave Hunter Biden is peanuts compared to what China has given him and Kerry’s stepson. It began with Bill Clinton and , I suspect, the Clintons still have a deep connection to China.
The workshop of the world is already over, at least if you listen to these guys:
https://www.chinalawblog.com/
They say that a major exodus has been going on for some time and that Chinese factories are stealing all they can as former customers leave.
If this is some sort of bio-weapon, it almost has to be directed at China rather than either directed by or escaped from the Chinese government. I just doesn’t make sense to me that they would develop something that they were so, almost uniquely, vulnerable to. This vulnerability should lead them to considerable effort to develop defenses. While their crowded cites and transport make them more vulnerable than we are, the yearly flu toll shows that it is only a mater of degree. I don’t believe that any government would use such a promiscuous weapon since they would be at the same risk.
There are non-government actors that aren’t bound by the same considerations. The CCP has a lot of enemies, both internal and external. One of them might have graduated from fertilizer bombs to bio-weapons.
From MCS link above:
“About once a week now we are getting emails or phone calls from foreign companies that moved their manufacturing from China and have just learned that their former manufacturer in China is selling their products directly to the foreign companies’ own customers or to the world or have just realized that this is what their former manufacturer will soon be doing.”
Sounds like China’s role as the low cost Workshop of the World is continuing, even as foreign companies leave. One issue we should never forget — a foreign company can leave, and it may even be able to take its machinery in some cases (although that can be difficult since usually the foreign company is in a joint venture with a Chinese company), but it cannot remove the knowledge & skills of the workers. In many industries, the capabilities of the trained workers are a vital part of the manufacturing process — one which may take time & expense to replace.
Our smart leaders got so excited about the short-term benefits to some of low-cost imports; they completely forgot about the long-term costs to all. “Free Trade” is not always the best policy.
I must say that keeping all those people stuck on that cruise ship in Japan seems pretty outrageous unless they’re running an experiment to see just how transmissible this thing is..
It’s hard to see what else they should do. Can you imagine what being in one of those new “hospitals” in China is like? Beds lined up rail to rail with barely enough space to edge between. Now fill it with lots of sick people because anyone that isn’t sick when they come will be soon, including the staff. And it won’t just be the corona virus, it will be every other airborne pathogen known to man including TB.
As far as I know, no one has actually died of boredom. Imagine how much fun the ship’s crew must be having. I think it’s just another example of how the cruise ship industry hasn’t really thought through having thousands of people for weeks in a small ship. If one had to be abandoned in some remote place, who is supposed to supply the ships to go pick them up?
Um, how about separate out the first few infected people into more secure hospital units? And do everything you can to make sure the non-infected are getting fresh, non-contaminated air, something which seems to be impossible while on the ship?
Those “hospitals” they’ve been building in China are death wards. A desperate attempt to try a more severe containment strategy, since apparently ordering people to stay inside, and even barricading them inside, apparently must not be working well enough. Forcibly arresting people to stick them in these holding centers is another piece of evidence that the stats they’re putting out about infection and mortality are complete garbage.
One thing I’ve been wondering re: non-China spread is what if the 14 day incubation period is wrong…
https://www.medrxiv.org/content/10.1101/2020.02.06.20020974v1
“The median incubation period was 3.0 days (range, 0 to 24.0 days).”
If it is as long as 24 days, then the time to know more about what’s going on will be longer than we thought…
take bohai investments that Rosemont Seneca was involved with, that in turn were involved with cgn whose principal allen ho, served 2 years? for 20 years of trafficking in nuclear secrets, or Huawei, which the uk insists on allowing in their networks, downer, having been a Huawei director before he joined haklyut,
I must say that keeping all those people stuck on that cruise ship in Japan seems pretty outrageous unless they’re running an experiment to see just how transmissible this thing is..
I have read that additional cases are appearing still.
An additional 65 people on board the Diamond Princess have tested positive for the new coronavirus, Japan’s Health Ministry says, bringing to 135 the number of people who are known to have been infected. Pressure is mounting to test everyone on the ship.?
re China as the “workshop of the world”…it strikes me that previous “workshops of the world” have gained that position in good part due to innovations that they have created. With Britain, it was steam power and textile machinery. With the US, it was mass-production technology and broad-based electrification. With Germany (circa 1900), it was chemicals (and also electrical equipment.)
With Japan post-WWII, it was innovative manufacturing processes and quality methodologies (borrowed in part by the American Edward Deming, but applied creatively.)
Has China during this period of great growth created any similarly-important innnovations? Not saying they haven’t, just that I can’t think of any right off.
David F: “previous “workshops of the world” have gained that position in good part due to innovations that they have created.”
That is an interesting perspective. In China’s case, there clearly was no great innovation. Rather, what China offered to the short-sighted Western holders of technology was that ‘China can do it cheaper’. And of course China can still do it cheaper today (well, after the virus has died down). But now the foreign holders of advanced technology have surrendered that advantage. The ability of the foreigners to continue innovating and accelerate away from China has also been compromised because of the old observation that “Design Follows Manufacturing”. In a number of cases, Western countries have even lost the ability to produce items that are now Made in China.
While there are different ways for a country to become the Workshop of the World, the test of whether a country has earned that status is the number of “Made In XXX” labels that we see.
As a side thought, the consequences of Western outsourcing to China could be seen as a good example of the “Tragedy of the Commons”. It made sense for each individual Western business to outsource, but the collective impact on the community as a whole of all those individual decisions has been quite damaging. And we are not at the end of the road yet.
}}} With regards to China’s continuing viability as the “workshop of the world” — much as I would like to see the US regain the industrial pre-eminence we had in the days of the Space Race and the computer revolution, it might not be wise to count on China losing its status anytime soon.
And
}}} but it cannot remove the knowledge & skills of the workers. In many industries, the capabilities of the trained workers are a vital part of the manufacturing process — one which may take time & expense to replace.
1) The march of industry back home to the USA (“reshoring”) has been going on for a decade or so. While some stuff moves there, and others pull back, as Chinese labor rates go up to a notable fraction of US minwages, it becomes more profitable to build a largely automated factory with a very small number of workers, mainly engineers/mechanics who know how to fix the robots, and floor managers who know how to operate and revise the control systems to deal with production line changes.
2) I have long been arguing for the future not being in China but being long term in even more complex 3d printers (akin to ST’s “replicators” in capabilities, but still decades away — first on-site at factories, but eventually in the home) and short term in factories such as the one from Minority Report:
https://www.youtube.com/watch?v=7omoVzuynmE
I cite this because the cost of an electric clothes dryer is not less than US$200 bucks for a minimal model. Which needs to contain no technology not readily available in 1910 — a steel box, a perforated steel drum, two sealed bearings able to handle heat, a heating element, a fan motor, a drum motor, and a few resistors, along with some other possible trivial parts (a belt connecting the drum to the drum motor, for example).
All sold, that’s… what, 5 to 10 bucks of actual factory parts? The delivery cost of the larger parts to the factory site and the finished product to the end-user are most likely greater than the parts cost.
But I can get an ink-jet printer for fifty bucks, a quarter of the cost. Yes, that’s sold as a loss-leader to get cartridge sales, but still — that’s one hell of a lot of inkjet cartridges @15-20 bucks apiece, if it’s being sold for 25c on the dollar, or less… And an ink-jet printer is clearly vastly more complex on a number of levels than a clothes dryer. The precision alone is nontrivial in terms of design expenses and issues from shipping/delivery damage.
}}} But now the foreign holders of advanced technology have surrendered that advantage. The ability of the foreigners to continue innovating and accelerate away from China has also been compromised because of the old observation that “Design Follows Manufacturing”. In a number of cases, Western countries have even lost the ability to produce items that are now Made in China.
This is a very myopic view. Yes, we have “lost” the ability to “make” the items. But, if we were going to choose to make them again, our approach would be entirely different. We would use vastly more automation (see the above comment for a link to The Minority Report scene which represents a pretty close example of what a future factory will probably look like).
I assert that there are two key things to realize:
1) The value in “making” things has been thoroughly marginalized in the West. I will cite for you a 10y old report regarding the iPhone 4, which was “Made In China”… The iP4 retailed for US$600 bucks. And no matter the manner of discounting to the end-user, in the end, Apple GOT its 600 bucks. So, out of that 600 bucks, how much did China GET for “making” the device?
One Percent.
Yes, 1%…
http://mjperry.blogspot.com/2010/07/iphone-designed-by-apple-in-us.html
And yes, that report is 10y old, but do you really believe it has changed much in the last decade, and, if so, what is your argument to justify that assertion?
The reason it is done in China is that the manual labor involved is cheaper than building an automated factory to do the same. As wages rise in China, the justification for making it halfway around the world and shipping it to the USA and elsewhere is reduced to the point of building that automated “Minority Report” factory instead. But the tech is in sufficient flux to delay that switchover until it makes economic and financial sense to do so.
2) This one is more philosophical and sociopolitical, but… China, thanks to that stupid “one child” policy combined with its patricentric male-dominated culture is in an unfortunate position of having an excess of males. Historically, the solution to this is to go to war. The war brings in plunder for the males to use in seeking mates, and also burns up a number of the excess males, as well…
Who the hell wants a nation with a low valuation of life and a multi-million man army to decide to go to war? No one with any sense.
But now they can choose otherwise. They can compete in business and commerce rather than going to war, a perfectly acceptable alternative to the traditional jingoism.
OBH….”While some stuff moves there, and others pull back, as Chinese labor rates go up to a notable fraction of US minwages, it becomes more profitable to build a largely automated factory with a very small number of workers, mainly engineers/mechanics who know how to fix the robots, and floor managers who know how to operate and revise the control systems to deal with production line changes.”
Yes, when labor rates are higher (as with the US vs China), it makes sense to invest more in automation…BUT, I question how many of these plants are going go have such a trivial number of workers. The actual manufacturing productivity numbers don’t show the kind of huge gains that would be expected from the meme that ‘robots will eliminate all the manufacturing jobs anyhow’.
https://www.bls.gov/news.release/pdf/prod2.pdf
One area of automation that I think will likely turn out to be particularly important–for the US but even more so for 3rd-world countries…is the roboticization of the apparel manufacturing process. (To be distinguished for spinning and weaving, which have been heavily automated for a long time.) Millions of people are employed in this activity in low-wage countries, and these jobs may turn out to be at risk in the not too distant future.
I wrote about apparel automation last year, here:
https://chicagoboyz.net/archives/59010.html
I don’t think there’s any doubt that China has benefited from technology transfer, both licit and illicit. It has probably saved them a number of years, but once something is available for sale, there’s no keeping it secret.
Apple had the wit to see the possibility of the smart phone and the money to build it before their competition. The only technology that they contributed was the software, all of the hardware IP still belongs to someone else. Once the idea was out there, and that was the real innovation, everybody and their brother could and did take a swing at selling their version, using much of the same hardware. The choke point remains the software. Android is the only platform that has succeeded since. Microsoft struck out three times if you count their two attempts with Windows and the Nokia debacle. Now that Huawei is cut off from Android, it will be interesting to see if they can develop something successful.
In the late 18th century England tried to keep the secret of the spinning jenny and then the power loom especially from us. It didn’t work. If you can build it, they will copy it and probably improve it as well. You can only compete by continuing to innovate faster than they can copy.
I don’t want to drift too far from the original topic of the dastardly virus. But on the topic of re-shoring, we should not lose sight of a factor which will impede efforts to build these highly automated factories in the US: excessive regulatory burdens.
A few years ago, a US university developed an improved battery for electric vehicles and set out to commercialize the invention. The financial backers insisted on building two factories, one in the US and a duplicate in China. The factory in China was turning out saleable product 9 months after the project kick-off. It took the plant in Michigan 27 months to get to the same point, because of all the normal regulatory delays. By that time, the factory in China had had 18 months to optimize and improve the manufacturing process.
If someone discovers a cure for the current virus, it is a safe bet that plants in China will be cranking out the new medication before the bureaucrats in the National Institutes for Health have finished their committee meetings.
Probably before the rug companies will have started the paperwork to ask permission. It will be the FDA rather than the NIH, but you’re sadly correct.
…a steel box, a perforated steel drum, two sealed bearings able to handle heat, a heating element, a fan motor, a drum motor, and a few resistors, along with some other possible trivial parts…
All sold, that’s… what, 5 to 10 bucks of actual factory parts?
$100 easy, plus the regulatory burden. US dryer manufacturers have to jump through lots of state and federal regulatory hoops to sell products in the US, although the EU is probably even worse.
A couple of interesting points:
– numerous places on the internet have been showing a quadratic model for deaths for the past week or more, that match the announced deaths almost exactly, demonstrating pretty conclusively that the official death numbers are clearly a Madoff style fraud, for anyone who might have had any doubts.
– Tom Cotton has been banging the possible-bioweapon drum pretty hard, which is pretty interesting that someone with such status would do so aggressively.
Students of bureaucracy will note that the World Health Organization has just selected a name for the virus after it has caused at least 1,000 deaths in China — “COVID-19”.
That took only 6 weeks after the announcement of the outbreak. Our expensive bureaucrats are moving at lightning speed.
there were sporadic outbreaks from the 1860-90s, add to the taiping rebellion, with this as the precursor to the final event of the Manchu dynasty,
http://disasterhistory.org/the-manchurian-plague-1910-11
Traffic in Beijing has crashed to <1/6th of normal in the last week:
https://www.tomtom.com/en_gb/traffic-index/beijing-traffic
Similar effect seen all over China, including Shenzhen, Shanghai, etc.
Seems odd for a completely contained "just the flu", no?
I notice that WHO is praising the “transparency” of the Chinese government, as that very government arrests or “disappears” any sort of independent reporter, to the skies while condemning the American travel restrictions as completely uncalled for. This is part and parcel with the UN’s kowtowing to authoritarian governments everywhere and an indication of their general uselessness. If the media is presuming to question WHO’s pronouncements, it’s not making it into print.
They’ve “unexpectedly” suddenly found more cases.
There’s a good chance that the travel restrictions won’t work because they were too late but I don’t see anything else that stood a chance at all.
This is not too reassuring:
https://www.statnews.com/2020/02/12/cdc-director-more-person-to-person-coronavirus-infections-in-u-s-likely-but-containment-still-possible/
“Health officials believe there is still opportunity to prevent widespread transmission of the coronavirus in the United States, the director of the Centers for Disease Control and Prevention said Wednesday, even as he warned that more human-to-human transmission here is likely.
“We’re still going to see new cases. We’re probably going to see human-to-human transmission within the United States,” Dr. Robert Redfield said in an interview with STAT.
He added that “at some point in time it is highly probable that we’ll have to transition to mitigation” as a public health strategy, using “social distancing measures” — for example, closure of certain public facilities — and other techniques to try to limit the number of people who become infected.”
Several weeks have been wasted that should have been used to prepare the public for what to do when (not if) there are confirmed cases in the general population in the West. If everyone who has the flu or anything like it starts going to the ER it’s going to bog things down pretty quickly, and make things much worse than they need to be.
Also, we need to really, really, really hope that those apartment buildings that have been welded shut in Wuhan aren’t full of dead people, and that the mortality rate is roughly correct…
“… prepare the public for what to do when (not if) there are confirmed cases in the general population in the West.”
There are some obvious steps we could take, such as acquire a supply of masks. Oops! We outsourced the manufacture of masks to China.
Oh well! At least we should frequently wash our hands with disinfectant soap. Now, what does the supply chain for disinfectant soap look like?
If I can return to another of my frequent themes — Would the denizens of the Deep State actually want to stop an epidemic? Especially an epidemic that would disproportionately eliminate citizens who are old (on Social Security) and have pre-existing medical conditions (on Medicare)? From the Political Class perspective, getting those people off the rolls would ease the impossible budget problems they have created with unpayable pensions and unsustainable medical costs.
https://twitter.com/EdwardLawrence/status/1227970167499563009
Administration sources say they believe China is under reporting the number of #coronavirus cases by at least 100,000 in China. Also sources say the administration believes China is “severely” under reporting the number of deaths from the virus.
Duh. Anyone who is paying attention has known that since the beginning.
Actions speak louder than words, and the fact that the US government is finally starting to prep for the virus here is telling.
How many people are going to die because the last few weeks have been totally wasted?
Forget masks. None of the masks you can buy will protect you. Their only usefulness is to reduce the range of the infectious droplets spewing from someone who is infected. And only if they’re changed regularly and disposed of properly. The N95 masks don’t seal well enough and once contaminated quickly allow migration from the outside to the inside. It’s like trying to stop mice with a chain-link fence, they’re intended to stop sawdust, not viruses and the 95 indicates that they only stop 95% of that. The surgical style are even worse since they are in direct contact with the mouth and nose.
The masks that actually work have a positive pressure of clean air from filters that are fine enough to stop all viruses and have to be used with proper clothing and procedures that let you take them off without contaminating yourself. Not what you can buy at home depot, even if they weren’t out.
According to one corona virus expert I saw, it will have trouble surviving long enough to spread as the weather warms and humidity increases. If the travel bans and quarantines only buy a few week delay in a general outbreak, they will probably have greatly limited the severity.
The best defense will probably be all the boring same old- wash you hands, avoid large groups, don’t sleep in a dormitory with 40 other people, cover your mouth when you cough.
I have already been convinced to avoid salad bars since the things I enjoy can’t be washed to effectrively remove E. coli. Now I assume all of the open trays are contaminated with Corona or some other nasty critter.
If some product has a hard exterior that can be washed before it is cut apart, it may be safe. Me and mine give things like melons a soap and water bath before the knife.
Precut products left exposed rather dull my appetite.
Jonathan: Yes, I’m familiar with the concept. But there’s no precedent or even any information here, so there’s no “wisdom of crowds” effect. So all we’re seeing in the markets is a tendency to stick with the status quo, which is a reasonable bet, but the tail probability of catastrophe is impossible to quantify. The only party who might actually know something is the CCP, and we know they’ve been absolutely freaking out since day one.