If China went full on commie and cuts off the US how bad would we get hit?

Discussion in 'Economics' started by noob_trad3r, Feb 14, 2012.

  1. Since Apple etc.. rely so much on China to produce salable product. how long can our corporations survive while they have to start from scratch to start production of salable product again?

    How long would it take before we can even ramp production back up to some other part of the world?
  2. xiaodre


    12 to 18 months.
  3. So for that time period US corporations would have no capacity to produce product and generate cash-flow?

    Until factories are built somewhere else?
  4. xiaodre


    12 to 18 months to ramp back up to full capacity baby! 1 - 2 weeks to cobble together workarounds.

    What you are talking about would only happen in a nuclear war, maybe not even then.

    There you have it - I'm on record for the timeframe, just in case.
  5. Chinese production (fabrication really) is something like 5% or less of an Iphone's price. As long as supplies of the really complicated bits aren't disrupted, you could set domestic factories to making the things in a couple of months.

    Of course wealthy investors and corporations would also take massive 100% writeoffs of any investments they've made in China. So the rich would get a little poorer and more humble, while the poor would have jobs again, and the price of an Iphone would increase by fifty bucks or so (or AAPL would make less profit).

    Seems like a decent tradeoff to me...
  6. Do we have the capacity here? Foxconn has lots of trained staff, lots of QA hardware, machining hardware etc..

    Stuff we do not have here at all. You would be amazed at how much is done at Foxconn.
  7. Is the country going to fall apart without iphones? Are we going to starve or freeze to death without them?
  8. Many places can do what FoxConn does, but people build in China because it's cheap. Obviously you can build in the US, but it's expensive. Other places in Asia also have good electronics infrastructures (Korea, etc) as well as closer to home (Mexico). I'm sure manufacturers would bend over backwards to accommodate a company such as Apple.
    Of course, it wouldn't be instantaneous to ramp up and the prices to the consumer would go up (which would offset the temporary reduction in sales).

    I would be amazed if Apple doesn't have several alternate manufacturing plans at the ready, just in case of issues. You don't manufacture products on that scale without fallbacks.
  9. Something like 85% of things consumed by Americans are made here in the USA; and Canada is our biggest trade partner, not China.
    #10     Feb 14, 2012