Thursday, February 03, 2005

Coming soon: the $4K car from China

This is the Chery QQ, which sells in China for $3,600. It's apparently a copy of the GM-Daewoo Spark, introduced in China in 2003. Chery sold about 50K of these last year in China and is planning to begin exporting cars to the US by 2007. Of course, the low price may be partly due to the, umm, borrowed intellectual property in the product. Nevertheless, it seems obvious that China is exporting deflation to the US - the $30 DVD player is only the beginning.

Actually, it looks pretty cool - just the thing to get me from home to office in Eugene when it's raining too hard to bike! (Something funny going on, though. My former students are driving Mercedes and I am looking at this thing :-)

13 comments:

Anonymous said...

Steve,

It looks cool to me too! Since I commute by public transportations, it will actually be a step up for
me :) All it needs to do now is run on CO2 or H20 :)

I was interested to hear your thoughts on IP issues. When it comes to software, for instance operating sustems, the open source solution is actually better by almost any yardstick. Companies make less money, but market is efficient; no monopolies.

Also, in many cases I understand, IP is actually developed in univs or govt., or old unpatented knowledge (as in biopiracy by drug companies) and the companies merely add a little bit and spend a lot on marketing etc.

I realize this is a complex subject. But considering your background and experience, I am curious what you think about the whole issue.

MFA

Anonymous said...

http://www.nytimes.com/2005/02/03/international/asia/03china.html?pagewanted=all&position=

China to Cut Taxes on Farmers and Raise Their Subsidies
By JOSEPH KAHN

BEIJING - Chinese officials are promising to reduce taxes on peasants and increase farm subsidies to improve the lot of 800 million rural residents left behind in the fast-growing economy.

The measures, announced in a government publication called the "2005 No. 1 Document" and described by policy officials this week, are intended to slow the surging wealth gap between urban and rural residents, a major source of social discontent and perhaps the greatest challenge for the governing Communist Party.

China's rapid economic growth has generated widespread prosperity and lifted average per capita incomes past $1,000 a year, pulling the country out of the ranks of the world's poorest developing countries in a single generation.

But the benefits of that wealth have fallen disproportionately on urban residents, a point of severe stress for a society that once preached egalitarianism.

Last year average urban income was 3.2 times as much as average rural income, one of the biggest urban-rural divides in the world, statistics released in January show. China keeps its rural and urban populations distinct through population controls, classifying most rural residents as peasants even when they migrate to cities to find work.

The gap in living standards is actually greater than the income figures suggest, because urban governments and companies often offer health, housing, education and retirement benefits that are not widely available in the countryside.

Many developing countries experience rising inequality in the early stages of industrialization. But China's transition has proven especially volatile, because the authoritarian government has injected hundreds of billions of dollars into developing urban coastal areas while maintaining tight controls over farmland and peasants to ensure steady supplies of grain and surplus labor....

Anne

Anonymous said...

Why be a wimp, as I snarl at all about in my Hummer. Actually, I am thinking of trading up :)

Anne

Anonymous said...

http://www.nytimes.com/2005/01/29/arts/29truc.html

New Way for Stars to Keep Truckin'
By DANNY HAKIM

DETROIT - Ashton Kutcher's got a CXT.

So does the Toronto Raptors forward Jalen Rose. Jay Leno and Nick Lachey, star of MTV's "Newlyweds," have each taken one for a test drive. And West Coast Customs, the body shop from MTV's "Pimp My Ride," is already calling itself the "official customizer" of the CXT.

So what is it? The International CXT, short for commercial extreme truck, is a giant new pickup that makes the Hummer look like a Honda Civic. While many celebrities - the likes of Leonardo DiCaprio, Cameron Diaz and Larry David - have made the fuel-efficient Toyota Prius gas-electric hybrid car a Hollywood accessory, the CXT and a forthcoming family of gargantuan pickups from International Truck and Engine in Warrenville, Ill., promise to carve out a niche at the opposite end of the environmental sobriety spectrum.

At just over nine feet high, the 7300 CXT, which went on sale in September, weighs about seven tons unloaded, more than twice the weight of the Hummer H2 and equivalent to about five MINI Coopers. The CXT can tow a 20-ton boat and carry another six tons of cargo in the truck bed. Because it rides at the height of an 18-wheeler, drivers will spend most of their time looking at the tops of cars.

The price starts at about $90,000, but fully equipped - with, as Maxim magazine recently put it, "more leather than Mick Jagger's closet"- it can cost as much as $120,000. Options include an automatically tiltable truck bed, DVD and satellite-radio players and walnut trim. The trucks are sold at International's several hundred dealerships nationwide.

Anne

steve said...

MFA: I have thought a bit about IP issues, both as they affect developed and developing countries. If I have time I will try to post something on this topic. One big issue which hasn't been carefully discussed is how China benefits from trade more than just in the dollar value of their current account. In other words, how do you value the knowledge transfer resulting from globalization? I don't just mean technology know-how narrowly defined, but also areas like management, organization, marketing, production, etc. Workers and managers in China would not be getting training in these areas were it not for their participation in trade.

Anne: someone told me that the *average* purchase price for a new car in America is $25-30K. I surprised it was so high, but I guess I am out of touch :-)

Anonymous said...

China has used the promise of potential market size or low cost increasingly educated labor to attract investors for years. But, there is an added investment requirement. Technology transfer. Boeing is favored by China, as long as Boeing is manufacturing important aircraft parts in China for assembly here and aircraft sales everywhere. Coca Cola does not have to be exported from China, but the bottling and distribution process, the advertising, in China will be a completely collaborative process.

The intellectual property issue is important, and I must think more about the matter. What are the number of companies that "control" music sales, at least in America? I think there are 5. There is advertising or marketing competition among the 5, but no price competition until very recently. So, music is costly. But, music from these companies is as costly in Brazil. Now, what we can afford and what Brazilians can afford are different. Brazilians love music. So in the large cities of Brazil there are street sellers of pirate music everywhere. What to do? Drugs, you wonder? Now there is a life and death issue....


Remember, that most of America's cars are sold on credit which makes the cost "seem" less. Again, we have been convinced we need larrrge cars.

Anne

Anonymous said...

http://www.hindu.com/2005/01/09/stories/2005010900161400.htm

January 9, 2005

India's poor need a radical package: Amartya Sen
Tha Hindu

IF THE Manmohan Singh Government is serious about ending the chronic under-nutrition that so many poor Indians suffer from, it needs to think seriously about the public provision of basic healthcare, nutritional support for children and income sup port for the unemployed poor, says Nobel Prize-winning economist Amartya Sen in an exclusive interview to Siddharth Varadarajan of The Hindu.

Siddharth Varadarajan: If one looks at the social policy commitments of the UPA Government — for example on education and employment — health seems to have something of a low priority. You have been involved in a recent study on the state of healthcare in rural areas. Based on those findings, what do you feel the Government's approach to health services should be?

Amartya Sen: We need a radical change in the way health delivery in the public sector occurs. India spends a lower percentage of GDP on public health than almost any other country, including those of similar income levels. The neglect here is massive, particularly because this has led to both the substandard delivery of public health and the development of an immensely exploitative private enterprise in healthcare that survives on the deficiencies — and sometimes absence — of public health attention.

What we found in the Pratichi Trust survey in West Bengal but also much more sharply in Jharkhand — and based on other information we have, the picture seems fairly widespread — is that when patients go to many of the primary health centres, they find no one there. Sometimes, when they find someone, they will be referred to private doctors. Also, the medical system in the public sector offers no diagnostics, even of basic illnesses like malaria or TB. Patients are usually told to go to private practitioners for testing. Sometimes the testing isn't very good and, in any case, the economic cost could be ruinous.

On top of that, the care that is often provided by the private sector comes from quacks. We found an incredible proportion of quacks in Jharkhand, particularly, but a significant proportion even in West Bengal, who provide almost no serious medical attention and instead give saline injections for malaria, which is not really known anywhere in the world as a cure.

Anne

Anonymous said...

Wonderful Museum:

http://www.nypl.org/research/sc/sc.html

http://www.nytimes.com/2005/02/02/arts/design/02migr.html?ex=1107579600&en=b331f8ed02ab396c&ei=5070

Black Migration, Both Slave and Free
By FELICIA R. LEE

The extraordinary range of African-American migrations - from the earliest Africans who arrived to the recent movement of blacks back to the South - is the focus of a new Web site and an exhibition of recent research that could redefine African-American history, said scholars involved with the project, which was announced yesterday at the Schomburg Center for Research in Black Culture in Harlem. "In Motion: The African-American Migration Experience," a three-year project that cost $2.4 million, is probably the largest single documentation of the migrations of all people of African ancestry in North America, said Howard Dodson, director of the center, part of the New York Public Library.

The exhibition at the Schomburg Center's Exhibition Hall, which opened yesterday, showcases many of the images, maps and music assembled for the project. But the project's 16,500 pages of essays, books, articles and manuscripts, as well as 8,300 illustrations and 60 maps are also available on the center's Web site (schomburgcenter.org) and could encourage a national conversation on the very definition of African-American, Mr. Dodson, a historian, said in an interview.

"This is a huge story," Mr. Dodson said. "This will serve as a catalyst for the continued re-thinking of who the African-American community is. For the first time, here's a project that explores the extraordinary diversity of the African-American community. This is organized around 13 migrations, 2 of them involuntary: the domestic slave trade and the trans-Atlantic slave trade."

Broadening the examination of migration beyond the slave trade means "you come away with some very different perspectives," Mr. Dodson said. Twice as many sub-Saharan Africans - about one million - have migrated to the United States in the last 30 years as during the entire era of the trans-Atlantic slave trade, project organizers said.

The project is chock full of illuminating facts. It shows that in recent years, twice as many African-Americans have moved from the North to the South as from the South to other regions. From 1995 to 2000 approximately 680,000 African-Americans moved to the South and 330,000 left, for a net gain of 350,000.

And for the first time, all the elements of the African diaspora - natives of Africa, Americans whose ancestors were enslaved Africans, Afro-Caribbeans, Central and South Americans of African descent, as well as Europeans with African or Afro-Caribbean roots - can be found in the United States.

Anne

Carson Chow said...

Can you fit a baby seat in it?

Anonymous said...

Carson

Remember the clowns pouring out of a Volkswagen...? Baby indeed :)

Anne

Anonymous said...

Thanks for your comments, Steve and Anne (and also for the nice articles :))

MFA

Anonymous said...

At 7:59 AM, Anonymous said "DETROIT - Ashton Kutcher's got a CXT."

Ok, big deal. I have a retired M35A2 which is not only bigger and has more wheels, but costs 1/20th as much (haha suckers who bought CXT's!). I don't drive it every day, only for pleasure on weekends to go ATVing. But it's not really about the biggest or most expensive set of wheels one can buy -that's idiotic. Basically for commuting, why would anyone want something bigger than a medium pickup or a sedan? I loved the Suzuki Swift I had, with its hatchback, 3 cylinder engine and 35MPG. Have a crown vic now because I have to sometimes entertain customers.

For most people, they have an application for up to 3 kinds of vehicles: a "monster" for camping/offroad, one "medium hauler" for dragging kids or customers around or going to swap meets, hobbies, etc., and one "commuter" for getting real economy for the 22 miles to and from work.

My peeve in all this is that the insurance companies, greedy bloodsuckers that they are, insist on charging for liability for each vehicle, even though you can only drive one at a time. They should charge for the 1 driver, not the 2 or 3 vehicles.

That, the extra 800/year for insurance, keeps me from buying a QQ or other economical car for most commuting.

Car DVD Players said...

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