Hobson's Choice

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The Matter of the Color TVs

May 28, 2004

Brad DeLong was stunned to learn as I was that the Bush Administration has acted to impose anti-dumping duties on color televisions from China (Reuters; China Daily). The action is quite strange; so is the article in the China Daily, which characterizes Bush's economic policies to date as "Keynesian ultra-protectionism"—evidently nobody at the China Daily has ever heard of Keynesianism.

A clue as to why the ITC might launch this odd attack now was revealed in this Washington Times story

I was totally stunned to learn there are a few American manufacturers of television sets:

The cases are a last hope for a small number of American manufacturers and producers that employ thousands of workers.
"If nothing is done to stem the tide of illegal imports, our company will be out of business by the end of the year," Tom Hopson, president and chief executive of Five Rivers Electronic Innovations, a color TV manufacturer based in Greeneville, Tenn., said at a hearing of the U.S. International Trade Commission (ITC) this month.

And what is more, China is relocating a few makers to Mexico.This article posted by Stephen Frost reveals the stunning tidings that the TV production business is fluid, and constantly changes location. For example, there are ten Chinese companies producing televisions; one merged with Thomson, a French producer which is the world's largest; but the country exporting the largest number of TV sets worldwide is—surprise!—the USA! The EU actually began anti-dumping action against Chinese producers back in '98, so Chinese producers merged with European producers and opened plants in countries not affected by the dumpling duties, like Poland, Thailand, and Mexico. In '99, another Chinese producer opened a plant in Vietnam.

It turns out that television sets are manufactured by a very large number of firms, for a small number of major firms. "Quasar" was a brand for Motorola, then Matsushita; but actual production could be contracted out to other producers. Panasonic is another name for Matsushita. But it seems the sets themselves can be churned out anywhere. This Kality Vestel plant was set up in Ethiopia and employs 47 people to produce "between 42,900 and 601,000 14 inch and 21 inch color television sets." (The sets are made from kits). At the opposite extreme is the Sony Technology Center in Pittsburghh, PA, the world's most vertically integrated TV plant (according to Sony). It turns out there are many kinds of producers, ranging from the semi-knockdown "screwdriver plants" in Ethiopia to the monster facility in Pittsburghh, which was chosen mainly for proximity to the market and existing infrastructure. Still other facilities, such as those in Mexico or Vietnam, are reliant on capital intensive components being shipped in for assembly.

Your humble correspondent lived from 1992 to 2004 without a television. A month ago I got accustomed to one in the home.

MORE ABOUT TV SETS THAN YOU EVER WANTED TO KNOW: Television History - The First 75 Years.