Offshoring Hifi: Good for Profit, Bad for Everything Else

[LogicprObe]

Our comparative advantage in Australia should always be quality, not price. We should be the Apple of the world.

What we should be and what we are (a quarry and a farm) are two different things.

[proftournesol]

What we should be and what we are (a quarry and a farm) are two different things.

exactly our 'competitive advantage' seems to be to produce nothing, and dig up and sell the country at the lowest price.

[Orpheus]

Agreed, Prof, though the analogy will upset the PC (no not politically correct!) crowd.

[Lloyd]

Aussie could export a bunch of our Olympians to say Kazakhstan.

That might free up a few 100 million to start up entrepreneurs.

Oh, but I forget, we are a sporting nation.

Edited August 8, 2012 by Lloyd

[LogicprObe]

exactly our 'competitive advantage' seems to be to produce nothing, and dig up and sell the country at the lowest price.

The worst thing is, we are allowing foreigners to do it for us!

[Lloyd]

I can't delete this post so I have to write something. Consider it written.

Edited August 9, 2012 by Lloyd

[LogicprObe]

I can't delete this post so I have to write something. Consider it written.

Whatever it was.............you're wrong!

; )

[davidsss]

Aussie could export a bunch of our Olympians to say Kazakhstan.

That might free up a few 100 million to start up entrepreneurs.

Oh, but I forget, we are a sporting nation.

I was going to say they wouldn't bother taking our athletes but we seem to be ahead of Kazakhstan, well, for the moment.

DS

[Guest kab]

The worst thing is, we are allowing foreigners to do it for us!

A treasonous act, if there ever was one. The whole thing disgusts me.

[LogicprObe]

What I find hard to take here is, we are not allowed to buy any land in Japan and China......and doubtless many other places but it's almost open slather here!

No one blinks an eyelid until you spend about $250mil.

Now, if the government was saying 'we're stuffed.........and need the money'.........that could well justify it........BUT!

Apparently, we have the best economy in the world!

Every envies us and should emulate us!

Something doesn't add up.

[Lloyd]

What I find hard to take here is, we are not allowed to buy any land in Japan and China......and doubtless many other places but it's almost open slather here!

No one blinks an eyelid until you spend about $250mil.

Now, if the government was saying 'we're stuffed.........and need the money'.........that could well justify it........BUT!

Apparently, we have the best economy in the world!

Every envies us and should emulate us!

Something doesn't add up.

The Australian Foreign Investment Review Board has to approve any purchase of Oz property by someone not of Oz nationality from overseas. Maybe just to check if they are legitimate and have no criminal history of concern. It could be as small as a one bedroom flat off a plan.

The FIRB can block.

For large investments the FIRB may pass it over to Govt policy, but by no means is it open slather.

Does anyone here recall the huge negative sentiment about Japanese buying up big in QLD maybe about circa 25 years ago?

They may be engaging in what David calls speculative investment, but nevertheless it enables accommodation to be built where otherwise it may not have been, and provides Aussies (builders and tradies and all the flow on effects) with jobs.

Upon investigation, you may find that certain of our neighbours are actually pretty flush with cash, like among others, Singapore.

You may wish to check out accommodation in the countries you speak of and report back, and Sth Korea and other similar places, and ask if their governments policies are benevolent or otherwise in intervening in what "should" be best for society, rather than letting the market work.

I hope some of that adds up.

I thank you for bringing this up and I shall go back in my corner for you and David to sort it out.

Edited August 9, 2012 by Lloyd

[LogicprObe]

When was the last time the FIRB knocked something back?

It's just a rubber stamp.

[Lloyd]

When was the last time the FIRB knocked something back?

It's just a rubber stamp.

2012.

Edited August 9, 2012 by Lloyd

[Super Mustud]

Trying to stay slightly on topic, an MBA would advise differently about the decision to manufacture offshore than an economist.

An economist would consider many things, like maintaining quality standards and prudential control of the process, and watertight legal obligations upheld in the country where the brand name is domiciled. Gets back to optimal rather than efficient. These considerations (and others) would ensure that it doesn't matter where the equipment was manufactured.

An economist can spot "false economy" from a mile off.

An MBA may say, well, it is cheaper, based on my spreadsheet analysis.

MBAs are not economists. Yeah, they are taught the basics of economics and the little bit they are taught can be mangled (in my personal experience), but the acronym stands for Business Administration, and I agree, often it is an over rated qualification. For some reason it has the "wow" factor attached to it.

There is a fair bit of rot in that post, Lloyd.

[Super Mustud]

DRC, I think that the main reason advanced business qualifications get such a bad reputation is not so much the qualifications themselves, but the way that their no doubt reasonably subtle and complex models trickle down to middle management, who pick up a few buzz words and terrorise those they manage with them, with endless and rather soul-destroying restructures, "team building days" (where inevitably large amounts of butcher paper are scribbled on in vein), and "mission statements".

I know this not from personal experience, but from hearing the horrified accounts of those subjected to such attacks.

That is true, but does it mean we would be better off without such training? Baby and bathwater.

[proftournesol]

They may be engaging in what David calls speculative investment, but nevertheless it enables accommodation to be built where otherwise it may not have been, and provides Aussies (builders and tradies and all the flow on effects) with jobs.

Lloyd, it may allow accommodation to be built that may not otherwise have been built, but more often than not it just drives up the purchase cost of existing accommodation and prices local buyers out of the market in that area or drives them down market.

[Dismord]

What I find hard to take here is, we are not allowed to buy any land in Japan and China......and doubtless many other places but it's almost open slather here!

No one blinks an eyelid until you spend about $250mil.

Now, if the government was saying 'we're stuffed.........and need the money'.........that could well justify it........BUT!

Apparently, we have the best economy in the world! Every envies us and should emulate us!

Something doesn't add up.

What doesn't add up is the ideologically driven free trade madness of both the Liberals and Labour. They prattle on about international trade being free of government interference in order to justify absurdities such as China buying up our land. Somehow though they manage to be totally blind to the fact those buying our country large chunk by large chunk don't permit foreigners to buy up their land. Obscene is the correct term I suspect.

As to the often put argument we need foreign investment why should that also mean we need to have our land and resources owned by others?

[Dismord]

That is true, but does it mean we would be better off without such training? Baby and bathwater.

Yes, we'd be a lot better off without such 'training' . The staggering amount of time wasted on conferences, office meetings, 'bonding exercises' etc has been effectively reducing productivity for far too long. Any of you who are still subject to a plague of office meetings ask yourself this after the next one - 'Could we survive without all that?'

As to putting the blame on middle management - - crap. The fish rots from the head down.

[Lloyd]

Lloyd, it may allow accommodation to be built that may not otherwise have been built, but more often than not it just drives up the purchase cost of existing accommodation and prices local buyers out of the market in that area or drives them down market.

Why does adding new supply drive up the price of existing stock?

[proftournesol]

Why does adding new supply drive up the price of existing stock?

I was referring more to existing stock than new stock, there isn't much foreign investment in cheap housing on the urban fringe that I'm aware of.

[LogicprObe]

What doesn't add up is the ideologically driven free trade madness of both the Liberals and Labour. They prattle on about international trade being free of government interference in order to justify absurdities such as China buying up our land. Somehow though they manage to be totally blind to the fact those buying our country large chunk by large chunk don't permit foreigners to buy up their land. Obscene is the correct term I suspect.

As to the often put argument we need foreign investment why should that also mean we need to have our land and resources owned by others?

I'll tell you where it's heading.

China (I'm talking govt owned businesses here) will end up owning huge tracts of farming land.

Then they'll bring in their own workers to farm/run it.

Then the majority of the produce will be shipped back to the mainland.

It's called cutting out the middleman.

It also gives them a small army ready to go at a moments notice if the Australian Government caves in to this.

(which they will..........no matter which side is in)

[Super Mustud]

Yes, we'd be a lot better off without such 'training' . The staggering amount of time wasted on conferences, office meetings, 'bonding exercises' etc has been effectively reducing productivity for far too long. Any of you who are still subject to a plague of office meetings ask yourself this after the next one - 'Could we survive without all that?'

As to putting the blame on middle management - - crap. The fish rots from the head down.

Nup, take away all the meetings and conferences and you would complain (even more) that they are not communicating with Dismord.

All those things work only partially - just like all human interaction.

[Lloyd]

I was referring more to existing stock than new stock, there isn't much foreign investment in cheap housing on the urban fringe that I'm aware of.

Well that's different. I can tell you first hand (not hearsay) that I know that huge dosh is being spent by Asians on new real estate developments in and around Melbourne. At a small boutique law firm we would get about 50 (sometimes more) new files a week of this nature. 99% from Asia, each worth anywhere between half a million and 2 million - all off-the-plan developments.. I didn't mention cheap housing on the urban fringe.

Edit - although these days half a million would be considered not obscene. The point is, that I saw very little Aussie interest in these new developments which you may see dotted around the Melbourne skyline. We are stuck in more of the McMansion kinda culture - and I wouldn't exactly call them cheap, either.

Edited August 10, 2012 by Lloyd

[Lloyd]

I'll tell you where it's heading.

China (I'm talking govt owned businesses here) will end up owning huge tracts of farming land.

Then they'll bring in their own workers to farm/run it.

Then the majority of the produce will be shipped back to the mainland.

It's called cutting out the middleman.

And that would be different than Aussies manufacturing HiFi in China for export would it? Indeed, t has previously been noted on this forum that it would be prudent for Aussies to oversee and manage any manufacturing in China.

[Orpheus]

Well that's different. I can tell you first hand (not hearsay) that I know that huge dosh is being spent by Asians on new real estate developments in and around Melbourne. At a small boutique law firm we would get about 50 (sometimes more) new files a week of this nature. 99% from Asia, each worth anywhere between half a million and 2 million - all off-the-plan developments.. I didn't mention cheap housing on the urban fringe.

Edit - although these days half a million would be considered not obscene. The point is, that I saw very little Aussie interest in these new developments which you may see dotted around the Melbourne skyline. We are stuck in more of the McMansion kinda culture - and I wouldn't exactly call them cheap, either.

Well, I think your last sentence needs a few qualifications. First, one of the main reasons that overseas interest is so high in new apartments is there are rules (as you would know) restricting overseas investors from buying other than new properties.

Second, there are many Australians who do, indeed, buy into new apartments, notwithstanding. They tend to be older, well-heeled people with grown up children (or without children), or young, single people. What you won't find is a lot of families buying these properties.

I have lived in one apartment in my 46 years. It is not for me. When single, I have lived in various inner-city properties, either alone (small semis or terraces), or with a partner, and now with my wife and children (a large terrace).

Of course if we are to avoid massive sprawl, there needs to be a good take-up rate of apartments within say 6km of the city or so, and the key is sufficient development controls over these projects so that they have sufficient community space built into their construction to attract families. That is the next challenge.

OT in classic stereo.net style.