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BOOK
REVIEW
Coming to terms with
China
China Inc: How the Rise of the
Next Superpower Challenges America and the
World by Ted C Fishman
Reviewed by Todd Crowell
In the
final analysis, it comes down to people, millions
and millions of people - 1.3 billion people by
official count, unofficially  probably closer to
1.5 billion. "First and foremost, the country's
huge population changes the fundamental rules,"
says the author of China Inc, Ted C
Fishman.
These millions are drawn to
factory towns nobody in the United States has
heard of, with names nobody can pronounce, that
are larger than Chicago. These towns have become
the new Ruhr Valley, the new Pittsburgh-Detroit,
soon perhaps the new Silicon Valley. Three shoe
factories in the city of Dongguan alone employ a
quarter of a million workers.
No industry
is safe from the inexorable pressure of these
workers, from cheap, simple Christmas-tree
ornaments, made by the nimble fingers of thousands
of women who haven't the faintest idea what an
angel is, to sophisticated electronics components,
car parts and machine tools. Soon Chinese cars
will begin to appear in US showrooms (or maybe
Wal-Mart).
Of course, simply to say that
China has a lot of people is to state the obvious.
The issue is how China has marshaled this enormous
workforce to create the world's fastest-growing
economy. This is the subject of Fishman's
excellent and very readable new book that deftly
combines anecdotes and analysis to help us
understand China's economic miracle.
Basically, the Chinese communists broke
centuries of feudalism to mold this inchoate mass
of people into a docile and disciplined workforce.
Then the economic reforms set in motion by former
leader Deng Xiaoping in 1979 unleashed the pent-up
natural entrepreneurial spirit of the Chinese
people, producing a workforce that has become
irresistible to the world's manufacturers.
Strangely, the still-nominal communists
who run China have succeeded in turning Marxism on
its head. Classical Marxism holds that capitalism
is the final stage of human development before
communism. In China, communism has become the
final stage before the full fruition of
capitalism.
When Japan Inc seemed poised
to conquer the world, the iconic image of that
country's economic prowess was the fully automated
automobile factory, robotic arms looking like arms
of a giant praying mantis, sparks flying, not a
human anywhere in sight. The iconic image of China
Inc is rows of young women, all wearing identical
blue uniforms, hunched over an assembly line in an
electronic-components factory, like an endless
chorus line seemly stretching out forever. Not a
robot in sight.
Who needs robots when
every day brings more and more recruits to the
labor force from the countryside, more cogs, if
you will, in the giant Chinese manufacturing
machine, a vast floating population of migrant
workers advancing on China's cities that is larger
in itself than the entire US workforce? Therein
lies the challenge for the US, and the rest of the
world.
In retrospect it was not so
difficult for the US to meet Japan's challenge,
which was founded on quality, automation and
productivity. Japan is a sizable country, but it
never based its competitive advantage on armies of
low-paid workers alone, nor its marketing strategy
simply on price. Basically, Japan competed by
raising standards of quality and productivity.
That gave the US an opening for a
comeback. Quality can be improved, productivity
can be raised, robots can be replicated. It mainly
took determination and capital. But how, short of
annexing Mexico (which would still leave China
three times as populous), do you compete with
China's endless supply of workers?
Alas,
Fishman offers few answers. China's millions, of
course, are a potential market for US and other
countries' products, and the numbers of people
with the wherewithal to buy things is large and
rapidly growing. But for many US manufacturers the
Chinese market is a double-edged sword, the author
says.
Any exporter faces the prospect that
his technology will be assiduously studied,
dissected and replicated at a much lower cost.
This does not even take into account outright
piracy. As Fishman points out, piracy of computer
operating software not only robs Microsoft (which
seems strangely tolerant about it) but also gives
industries that use computers an advantage across
the board.
The term "economic miracle" has
been overworked since the end of World War II.
First came the German miracle, then the Japanese
miracle, then the Asian Tigers miracle, and now
the Chinese miracle. But in this case the rise of
China in the past 20 years has truly been
miraculous.
One can cite the usual
statistics, such as years of consistent 7-9%
annual growth, but the fundamental fact is that
China in recent years has lifted more people out
of poverty than any other country in the world,
any time, anywhere. That, of course, is good news
for China. For the rest of the world it is a mixed
blessing and poses the supreme challenge so far in
the 21st century.
China Inc: How the
Rise of the Next Superpower Challenges America and
the World by Ted C Fishman. Scribner. ISBN:
0743257529. Price US$26; 342 pages.
(Copyright 2005 Asia Times Online Ltd. All
rights reserved. Please contact us for information
on sales, syndication and republishing.) |
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