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The China Price: The True Cost of Chinese Competitive Advantage

Cheap and deadly

Alexandra Harney
Penguin, 336pp, £15.99,
Jonathan Mirsky
Wednesday, 9th July 2008

Made in China

The price, the real China price, lies at the core of this meticulously researched and wonderfully readable book. Lots of others, like Harney, with long experience in and around China, knowledge of the language and the grit to scramble beneath the curtains that disguise so much in Chinese life, have written on conditions in Chinese factories. Books and articles have exposed the deadly toys now withdrawn in their millions, the poisonous toothpaste and pet food and the horrifying realities of Chinese factories. There is a superb book on Chinese pollution, Elizabeth C. Economy’s The River Runs Black and another (not cited by Harney) on the toy scandal, Eric Clark’s The Real Toy Story: Inside the Ruthless Battle for Britain’s Youngest Consumers.

But Harney, who represented the Financial Times in Hong Kong and China, draws everything together: the gigantic scale of Chinese manufacturing, its international extent, the sometimes genuine, often bogus, attempts to control its corruption and vileness, the similarly dodgy extent of much international monitoring, the vast pollution Chinese manufacturing spews out that damages the health or takes the lives of its workers and many others. She writes, as they used to say, like an angel, and, uniquely, has spent hours with the men and very young women working in China’s William Blake-like world to bring you those cheap knickers.

The extent of Chinese manufacture, like everything else in China, staggers the mind. In 1984 China exported $26 billion-worth of goods. In 2006 that climbed to $969 billion. One company alone, employing 450,000 people, manufactures for Apple, Motorola, Dell and Hewlett-Packard. This year China will become the world’s largest exporter. $287.8 billion of those exports went to America in 2006 (this book is aimed at Americans) while American exports to China that year amounted to $55.2 billion. This trade deficit has cost Americans 1.8 million jobs since 2001.

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KMcC

July 10th, 2008 11:08am

I haven't read this book, but I've read enough about the subject of sweatshops, industrialisation and the economics of growth and development to offer a few thoughts.

First, sweatshops are indeed not nice places to work, but poor people in poor countries make the rational choice to work in them because a job in a sweatshop sewing clothes or making toys is better than the alternatives. These alternatives may be unpaid labour in subsistence agriculture; prostitution; picking over rubbish heaps. You get the picture. Sweatshops not nice; alternatives worse.

Second, I'd suggest that the process of industrialisation takes many decades less than it used to. It took Britain grim generations to move from sweatshops and early industrial activity to a service-based economy; other nations, with much more capital to utilise and more experience of earlier successes and failures to examine, will do it in less. Japan and S Korea and Taiwan all made the gruelling transition in less time than Britain and the US and Western Europe did. I expect China will do it in even less time.

Finally, it would be wrong not to buy goods made by poor people because you don't like the way they were produced. Without people willing to purchase said goods, those who manufacture them will find their progress out of poverty to take much longer.

wonderfulforhisage

July 10th, 2008 8:29pm

And what if China's leaders are playing a long game.

Get the West thoroughly dependent on cheap Chinese imports by keeping the exchange rate ludicrously low and ten, twenty, thirty years on...the World is Their Oyster.

Game Set and Match to those that understand dynasty.

Why else would the Chinese Government be subsidising our under class.

peter adler

July 12th, 2008 6:44pm

Thank you KMcC! I know that Jonathan Mirsky is very knowledgeable about China and I can only assume the same of Alexandra Harney. So it is a terrible pity that they don’t realise the vital truth that KMcC raises. Furthermore, while there is of course a lot of truth in their actual description of the situation on the ground today, I can still only see it as a very selective truth, tailored for a Western audience who expect to hear how terrible things are in China. I came back from China a few months ago, after five years of living there. I have visited hundreds of factories, including many factories doing ”dirty” things like fabric dying, electroplating of metal and tanning of leather. I have seen some with appalling working conditions. But although the vast majority certainly had many faults in the working environment, which I would point out, most of them were not Dickensian. I do not deny that there are Dickensian factories out there, probably at a greater proportion than what I have seen, but I deny that they are the majority. I have also visited dozens of dormitories – foreigners’ luxury compounds they ain’t, but livable, they are. I have wandered on the streets of Dongguan, the grey city between World-record City Shenzhen and Guangzhou (Canton), which can be seen as the heart of the Pearl River Delta massive light industry regins, and is famed for consisting solely of sweatshops and dormitories. The spirit is open, the girls giggle and hold each others’ hands, and the men are not so macho or aggressive.

Why do I call Shenzhen ”World-record City”? Because no other city in World History has grown from nothing to 14 million people in a period of less than 30 years. Just to illustrate KMcC’s point.

Having been a reporter for the FT, Harney should know full well that it is exceedingly difficult to measure inflation – and therefore to compare wage levels – over longer time periods. How do you measure the inflation in the price of mobile phones over the last 200 years? According to some particular econometric yardstick, the Chinese migrant laborers may have lower wages ”than the earnings of UK handloom operators during the Industrial Revolution”– but I don’t believe that the latter had the option of talking with their friends any time, anywhere – there are something like 700 million mobile phone subscribers in China today, and counting – at a rate of approximately 5 million per month. For that matter, I don’t believe those UK handloom operators had electric lighting or tarmaced roads either.

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