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High price for made-in-China 'bargains'
By Wang Yong |
July 16, 2011, Saturday
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Print Edition
Print Edition
LOW wages, long work hours, squalid dorms.
Compound these conditions with polluted lands and lungs, and you'll arrive at a price for many if not most Made-in-Chinas.
In her 2008 book "The China Price: The True Cost of Chinese Competitive Advantages," journalist Alexandra Harney begs us to reflect on what a US$3 T-shirt or US$30 DVD player really costs China and the rest of the world.
Her findings are highly relevant today as China tries to diversify its economy away from low-end manufacturing, make more value-added products and become more than the world's factory.
The China price, Harney says, translates into an average annual savings of US$500 for the typical American family.
She adds, however: "Our appetite for the (US)$30 DVD player and the (US)$3 T-shirt helps keep ... illegal mines open and 16-year-olds working past midnight. We all pay the China price."
Though relentless in unraveling the inconvenient truth of the China price, Harney is far from a China basher. Her solid investigation into China's working conditions has led her to conclude that multinational corporations that use China as a cheap manufacturing and assembling center are responsible in many ways for the hidden high cost of a low China price.
In negotiations with smaller Chinese firms, she says, many multinationals dictate terms that are often violations of their own policies.
She cites the example of Timberland, which wanted Chinese laborers to work longer than the maximum 60-hour week restriction observed in Timberland's own code of conduct. One Chinese factory rejected the unreasonable requirement.
Ethical standards
Harney is no less harsh in criticizing Walmart. She says that only 5.4 percent of Walmart's global suppliers pass its compliance tests. Any factory manager - from China and beyond - who could meet all of Walmart's ethical standards would have to raise prices to do so and probably would lose Walmart's business in the process.
Even the world's largest multinationals, Harney says, can't patrol all their suppliers all the time, and even if they could, their own demands for the lowest possible prices and the fastest delivery times preclude most of their own codes of conduct. How much does Walmart buy from China every year? Harney's finding: US$18 billion in products.
"A decade of monitoring by multinationals has not led to substantial improvement in working conditions in Chinese factories," she says. She could have added that many foreign companies opt to operate without a union in China.
So, the China price boils down to a global capitalist race for maximum profits at whatever cost. The China price is a China problem, for sure, but it's not just about China. That's an essential message from the book.
But, while she excels in diagnosing the problems at the heart of the China price, the author seems to stop short of prescribing the best solution.
She suggests China move up the economic value chain so that it does not compete in world markets with low prices alone.
Well, in that scenario, China may move closer to something like today's Europe, Japan or America, offering the world expensive cars and sophisticated derivatives, while outsourcing its dirty, low-price jobs to poorer neighbors.
As long as the global capitalist culture of conspicuous consumption persists, low prices - be it the China price, the Vietnam price or the Bangladesh price -will be here to stay.
A benevolent nation should never pass its own past problems onto others.
Compound these conditions with polluted lands and lungs, and you'll arrive at a price for many if not most Made-in-Chinas.
In her 2008 book "The China Price: The True Cost of Chinese Competitive Advantages," journalist Alexandra Harney begs us to reflect on what a US$3 T-shirt or US$30 DVD player really costs China and the rest of the world.
Her findings are highly relevant today as China tries to diversify its economy away from low-end manufacturing, make more value-added products and become more than the world's factory.
The China price, Harney says, translates into an average annual savings of US$500 for the typical American family.
She adds, however: "Our appetite for the (US)$30 DVD player and the (US)$3 T-shirt helps keep ... illegal mines open and 16-year-olds working past midnight. We all pay the China price."
Though relentless in unraveling the inconvenient truth of the China price, Harney is far from a China basher. Her solid investigation into China's working conditions has led her to conclude that multinational corporations that use China as a cheap manufacturing and assembling center are responsible in many ways for the hidden high cost of a low China price.
In negotiations with smaller Chinese firms, she says, many multinationals dictate terms that are often violations of their own policies.
She cites the example of Timberland, which wanted Chinese laborers to work longer than the maximum 60-hour week restriction observed in Timberland's own code of conduct. One Chinese factory rejected the unreasonable requirement.
Ethical standards
Harney is no less harsh in criticizing Walmart. She says that only 5.4 percent of Walmart's global suppliers pass its compliance tests. Any factory manager - from China and beyond - who could meet all of Walmart's ethical standards would have to raise prices to do so and probably would lose Walmart's business in the process.
Even the world's largest multinationals, Harney says, can't patrol all their suppliers all the time, and even if they could, their own demands for the lowest possible prices and the fastest delivery times preclude most of their own codes of conduct. How much does Walmart buy from China every year? Harney's finding: US$18 billion in products.
"A decade of monitoring by multinationals has not led to substantial improvement in working conditions in Chinese factories," she says. She could have added that many foreign companies opt to operate without a union in China.
So, the China price boils down to a global capitalist race for maximum profits at whatever cost. The China price is a China problem, for sure, but it's not just about China. That's an essential message from the book.
But, while she excels in diagnosing the problems at the heart of the China price, the author seems to stop short of prescribing the best solution.
She suggests China move up the economic value chain so that it does not compete in world markets with low prices alone.
Well, in that scenario, China may move closer to something like today's Europe, Japan or America, offering the world expensive cars and sophisticated derivatives, while outsourcing its dirty, low-price jobs to poorer neighbors.
As long as the global capitalist culture of conspicuous consumption persists, low prices - be it the China price, the Vietnam price or the Bangladesh price -will be here to stay.
A benevolent nation should never pass its own past problems onto others.
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