This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Eight Ways China Affects Us

It's hard enough to manage a supply chain if all you have to do is walk from one end of the plant to the other to see if you have enough left-door arm rests to keep your SUV production line rolling at full speed. Now imagine that the left-door arm rests are coming from an auto-interiors assembler in Canada as part of an interior unit that itself relies on parts makers in Shanghai, Detroit, Stuttgart and Malaysia.

That logistics nightmare will require new systems for tagging and tracking in real time; these systems are just now emerging with radio-frequency identification tags and global satellite positioning systems.

China could make bottlenecks a way of life. In an ideal world, the combination of high-technology logistical systems with real-time data-sharing over the Internet would result in part A arriving at site B just in time to meet up with assembly C. But the real world is messier than that. Railroad cars wind up in the wrong place or just don't exist in sufficient numbers. An unexpected spike in demand meets up with health scares like SARS, and a key factory shuts down just at the worst time. I can see three results:

  • Massive and rapid swings in the prices of limiting inputs such as railroad cars or ocean freighters.

  • A sharp spike in consumer dissatisfaction as we hear more and more often, "I'm sorry. That's not in stock."

  • A rapid differentiation between companies that actually master this system (and gain lots of new customers and make lots of money) and those that don't (and go out of business).

That's about as far as I can see with my crystal ball. And as with any exercise in imaginative projection, I'm sure that any one reader will disagree with some or all of these potential trends.

But I think we can agree on one thing: The economic phenomenon that we call China will reshape daily life in the U.S. over the next decade in ways that we've just begun thinking about.

5 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,598.08 +198.41 1.21%
S&P 500 1,938.91 +34.90 1.83%
NASDAQ 4,410.5980 +94.5240 2.19%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs