China Emerging_ 1978-2008 - Xiao-bo , Wu [55]
2.26-meter-tall basketball player named Yao Ming. People have calculated that if he stays in the NBA until he is 38 years old, his total salary income will be between US$270 and US$290 million, not including his advertising income. This sum is roughly equal to China exporting 1.02 million tons of rice, 460,000 tons of steel, 2.39 million color television sets, 6.3 million bicycles, 980,000 tons of crude oil, or 64.89 million meters of silk. It is quite true that “Made in China” is ubiquitous, and part of the reason is Wal-Mart. The New York Times journalist Thomas Friedman calculated that, “If WalMart were a country, it would be China’s eighth largest trading partner and sixth largest in terms of taking in China exports.” By the beginning of 2002, Wal-Mart’s purchases in China amounted to US$12 billion, roughly the same as the total trade volume between China and Russia. In 2002, WalMart moved its Asian purchasing center from Hong Kong to the Luohu district of Shenzhen.
“Made in China” had already become an unassailable fact of life in the late 1990s, as “cheap but well-made” Chinese products swept across the globe. The Chinese soccer team did not win at the 2002 Korea-Japan FIFA World Cup, but Chinese products did. Yangzhou in Jiangsu Province made 300,000 World Cup good-luck items, and Yiwu in Zhejiang produced 2,250,000 soccer-fan flags. Fujian factories supplied several million other soccer
A female worker in a toy factory in Yangzhou, China.
items. Any Chinese traveling to another country and wanting to buy a souvenir soon discovered that anything that could be purchased was actually made in China.
The reason, as astute people have noted, is that the “Made in China” label takes advantage of the availability of very cheap labor. The experience of the company Galanz is a prime example. Based in Guangdong, Galanz is the world’s largest manufacturer of microwave ovens. In 2002, its factories produced more than twelve million microwave ovens, more than one-third of the total world output. The most important advanced component of a microwave oven is its pressure-changing device. Japan produces this for a cost of US$20; European and US companies manufacture these for more than US$30. Galanz approached the US companies, knowing that they were facing stiff competition from Japanese makers. It said, “Let us make the devices, and we will charge you US$8 at current American production quantities.” The Americans were happy to send their production lines to China. Since the wages of Galanz factory workers are extremely low, and since three shifts operate twenty-four hours a day, Galanz factories can produce all the United States needs in just two days of each week. The remainder of the week can then be devoted to other markets. Galanz then went to Japan to negotiate, saying, “We will sell you each piece for US$5 dollars, if you relocate your production lines here and lease them to us.” This process was repeated elsewhere, and the production lines of several countries converged to Guangdong. Due to its cheap labor costs, Galanz became the world’s factory for microwave ovens—the dragon’s head, the number one.
Many are doubtful about the sustainability of the “Made-in-China” formula, but others recognize that “Made in China” is just the prelude to China’s rise. The bigger picture includes a well-rounded economy that functions in areas beyond simple manufacturing. Zhu Rong-ji put the foundations for this kind of economy in place. From 1991, when he was appointed vice premier directly in charge of China’s economy, until 1998, when he formally assumed the responsibilities of premier, Zhu used both his professional
From 1998 onward, Chinese products began to conquer world markets as a result of China’s low-cost advantage. At the same time, “Made in China” provoked anti-dumping charges from many countries.
On July 10, 2004, workers approach the construction company and ask for their pay. Their wages were already seven or eight years in arrears.
talents and his native