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Information about the Effects of Immigration, Outsourcing and Free Trade on Georgia


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More American jobs outsourced, to China this time by DuPont ...
by Mike Crane

More software development jobs being sent out of our country. This time the destination is China, the new up and coming darling of those who promote outsourcing.

It is interesting to listen to the pitch by the American companies that follow this route. They are going to foreign companies because they say Americans can't do the jobs. Of course this is somewhat less than honest since it was Americans who virtually created the entire computer and software industries.

But now, globalist corporations who have been major recipients of American markets care little about their former benefactors. But we can't put all of the blame on these corporations. It is YOUR government which has spawned the era of "Expensive Trade" (See: Another example of why the so-called Free Trade is really Expensive Trade) that provides the government policies and subsidies that have created this new economic phenomena.

Of course the favorable government policies are the result of the unholy influence that large corporations have on many elected and appointed officials of both the Republican and Democratic Parties.

Meanwhile, the outflow of American jobs continues ...

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Offshoring to China at DuPont

DuPont was in a bind. It outsourced the creation of an online fabric database for retailers and apparel manufacturers. Its first supplier failed. No wonder. The project was daunting. It required data from 600 fabric mills in 40 countries using eight different languages.

But the company couldn't delay its Online Fabric Library because the CEO had sent letters to thousands of companies announcing the system would go live by a certain date. "There was a lot of internal pressure to deliver because this project had a lot of visibility," says Mike Keating, Partner, Freeborders, the supplier who saved the day by stepping in and delivering the project three weeks early.

"Going from 'It's unlikely we'll meet our target date' to 'beating the target date' was a huge win for the CEO," says Keating. "They worked week-ends and nights to make this happen for us under very tight deadlines," adds Norman Beveridge, Global Manager for Apparel for INVISTA. (In 2004 DuPont sold its $7 billion fiber and textile arm to Koch Industries; the division is now called INVISTA. Antron, Lycra, Stainmaster, Thermolite, and Teflon are a few of its popular brands.)

Freeborders's secret: offshoring to China.

China's Future in Offshoring

Keating is bullish on China. "I believe China will become No. 1 in IT outsourcing." He says the world sees China as "a serious emerging player who everyone is afraid will become the 10,000-pound gorilla." China is the No. 1 country from US-based investments, while India is No. 6, according to Keating. Cisco, Intel, and DuPont are investing heavily in China. "The message is: "Don't bet against China,'" says Keating.

Lance Travis, Vice President of Outsourcing Strategies at AMR Research, takes a more tempered view. He believes China "will eventually mature and become a significant offshore locale." But he's "less optimistic" that China will produce a supplier who can generate $1 billion in revenues like the major suppliers in India.

The Indians enjoyed "a perfect storm of opportunity," according to the AMR executive. Y2K allowed them to get started. There was no offshore competition in 1999. Travis believes China won't be able to produce a $1 billion company--even in 10 years--because it has to compete with India. "The big advantage in labor arbitrage is over," he says.

Yet he says Chinese suppliers will prosper, especially the ones who develop specific domain expertise. All the major outsourcing players are investing in capabilities in China, he reports. He mentions Accenture, BearingPoint, and IBM as well as the major Indian suppliers.

Ramsey Walker, Co-founder and Co-CEO of Freeborders, points out China has the largest number of software engineering graduates in the world. Last year China produced 21 percent of these graduates; India produced 7 percent and the US just 5 percent. "Chinese universities produce 200,000 new software graduates a year," he points out.

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Instead of continuing Expensive Trade Agreements we have proposes a FAIR Trade solution.

A Southern Party of Georgia Position on solving our country�s Trade Deficit


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