Chinese based US operations serve 4 purposes: 1. supply and serve the local Chinese market (quite profitable); 2. secure lower overall cost economies as part of the manufacturing process (maintaining margins, etc); 3. provide a lower cost base in support of re-exported goods (ie: manufactured by US owned, Chinese based companies, for export to the US); 4. provide a regionally focused platform from which the US can project its selling activities into the local region.
In the last 5 months, I have bought 2 computers through Dell. Most of the components /assembly has been done in China, where Dell sources component inputs and maintains assembly operations (etc). The remainder, came from Malaysia. The software /IP, however, was US-based.
Currently, the twisted Chinese situation is distorted by the fact that foreign repatriation of profits from China is quite difficult. Once this is liberalised, however, you will see much greater repatriation of profits /inflows from overseas based, US domiciled corporations.
Another 3 points to add: 1. In some parts of China, the labour costs are rising too high (particularly in the SAR areas), with manuafcturing being re-located to lower cost Vietnam (so this is likely to be an increasing problem for the Chinese in the future); 2. GM last week announced closure of its German based plants (axing some 12,000 people in the process) which is an example of a US-based giant exercising its muscle in Europe; 3. In Australia, we have the US-controlled, but locally based Ford which primarily services the Australian market, and where efficiencies /synergies permit, assists in securing export orders into those regions which otherwise would be difficult for the US to crack in a more direct sense (ie: India, Malaysia, parts of the Middle East, etc).
