What follows below is a chapter summary of the outline of the book. I’d like to get your comments and feedback and maybe some discussion on thoughts which come from the ideas in the book. Here are some guide questions.1. Does the author attack China’s economic tactics too hard?
2. Is he biased and how?
3. Is his language even tempered or loaded? Is it pro-American?
4. Are there any times he makes you angry?
5. Have you noticed any contradictions in the argument?
6. Is there any misrepresentation from omission or distortion?
7. Does he understate the genetic engineering “Frankenfoods” controversy?
8. Does he downplay China’s “ecological footprint”?
9. As China becomes more educated and enlightened, will it improve on its social policies, rights of workers and fairness in competition?
China Inc: Thesis: How China ascended from poverty to one of the wealthiest economic powers today and the impact on the global economy, politically, socially, environmentally, culturally, technologically and eventually on world security. “How the Chinese and the rest of the world use that resource will shape our economy and every other economy in the world as powerfully as American industrialisation and expansion have over the last hundred years.”
The World Shrinks as China Grows:description of size: 1/5 of humanity; seen as largest market ever.
-
- Context: US economy is 6 times China’s, China is 4th in the world but in terms of purchasing parity closer to 4/5ths that of US.
- Size of workforce
- Impact on American jobs
- Large technological items
-
- Expansion into foreign markets
- Stability of government
Quote: “You need to know what is happening today in China-worker by worker, factory by factory-and why it will affect everyone.”
Taking a slow boat in a fast chinaHistorical overview from 1895: explanation of economic and political transformation. 1949 Communist regime.
-
- Language spread, tendency to save, gigantic projects, self promotion
Quote: “For now, big projects are the public prelude to dominance, parts of a national temple in the making.”
The revolution against the communist revolutionExplanation and illustration of transformation of agrarian economy to market economy
-
- Transiency of population
- Communist reformation put money into hands of peasant farmers
- Collectivisation led to economic independence (Zhou) How the Farmers Changed China
- “Once farmers began to make some money on their own, they looked for ways to make money with their money.”
- Docile workforce can be used to competitive advantage
Quote: “Economic liberalisation, however, made daring to move pay, and man by man the Chinese have picked up in such large numbers that the country is now in the midst of the greatest migration in human history.” To Make 16 Billion Socks First Break the LawExplanation of why rural farmers are flocking to the city.
-
- Even the most meagre city jobs pay better than wages in the poor agricultural areas
-
- Government corruption kept peasants poor.
- Poverty rate is 4.6 % but more than 47% live on less than $2.00 a day.
- Norms of bribes and non-compliance imbues methods of business
- Farmer-entrepreneurs help reform business through frugality, hard work and competitiveness
- Volume buyers like Wal-Mart are attracted to cheap labour costs
- Copycat entrepreneurs
Quote: “All these reinforcing factors-rural poverty, huge internal migration, liberalisation of financing, a self-cannibalising frenzy of competition, intensifying urbanisation-speed the high metabolism of Chinese capitalism.”
Meet George Jetson in BeijingExamination of political conditions which led to Chinese style Capitalism under Mao and Deng Ziaoping
-
- Government backs reform in urban centres
- Backing of growth infrastructure
- Hong Kong capitalist manufacturers build in China
- Social ills become evident: conditions for working women, aged, sex workers, one-child families; environmental costs: “China only has 80 % of the energy it needs to run smoothly.”
Chairman Mao Sells SoupExamination of foolhardy political schemes engender mistrust in political machinations. Ideological reforms and campaigns Eg. Wipe out the 4 pests: rats, flies, mosquitos and sparrows lead to disasters like to 1960 famine; Mao’s cultural revolution to wipe out the 4 olds “old culture’ “old customs”, “old ideas”, and “old habits” results in mistrust of the older generation.
-
- Collection of scrap steel
- Lack of local crops
- Youth see the Mao generation as quaint
- Mao becomes a collectible commodity for the young
Quote: “If China can make it through another twenty or thirty years without the mid-twentieth century coming back to derail it, the country will have skirted one of the most potentially explosive national legacies in recent human memory.”
Through the Looking GlassExamination of China’s clout in consumer driven economy, its domestic production, place in WTO, theft of markets and foreign relations.
- Counterfeit soy products
- Impact on Mexican labour markets
- Poaching of products, copycat, copyright infringements
- Germany and the car market
- Japan’s ramen noodles
- Sony, Panasonic and Toshiba
- Relations with Japan
Quote: “Search the news for profits from Japanese operations in China, however, and one can find general numbers, such s that eight in ten of Japanese companies in China make money there, but little company-specific information comes up.”
The China PriceExamination of the scale of repercussions, statistics on job losses; means the lowest price possible but at what cost to manufacturing, violations of copyright
- Odds of losing a job in manufacturing in US 50% higher
- Jobs migrating to China
- Consumer electronics, DVD, VCR
Quote: “China has an unfair advantage. They don’t pay anything..not for their equipment or buildings. We can’t compete with that. They illegally ship 6 billion dollars in goods every year- that’s three hundred textile plants closed down as a result of illegal imports.”
How the race to the bottom is a race to the topMagnitude of China’s market share
- Destined to be largest auto market in world, presently 1/3
- Cellphone communications giant
- MRI computer chips
- Pharmaceuticals
- Aerospace
“The country’s growing population and shrinking stock of arable land lend urgency to this agricultural biotech research, and China already has one of the highest concentrations in the world of genetically modified crops growing in its fields.”
Pirate nationExamination of Counterfeit industry, and posits that this will increase. 9% of world trade is counterfeit. Impact on world economy.
- Microsoft refashions its software policy in order to tap the Chinese market
Quote: ..when China matches the world’s largest markets and is among the world’s most advanced and prolific manufacturers, it may well have the brand names, entertainment industry, and technology that set the world’s standards.”
The Chinese American Economy the Chinese CenturyChallenges reader to assess the costs to other countries by keeping the price of goods the lowest possible. Explanation of currency tied to American dollar.
- Dumping of goods on market and Wal-Mart experience
- Spendthrift habits of the US
- Manipulation of the yuan
Quote: This means that billions of dollars’ worth of investments belonging to the Chinese are plowed, indirectly, into the American real estate market, and that an ever increasing share of American’s mortgage payments pour into the coffers of the government of China.”
The Chinese CenturyMaking predictions, issuing a warning, suggesting impact.
- Lessons to be learned for developed countries
- “The freedom of Americans to overspend on unproductive consumption at the expense of education leaves schools underfunded.”
- Preparation for global economy
- Even a farmer is a knowledge worker
- “For America to stay productively employed, its skills, sophistication, and imaginative power must remain world-class, every day better than ever before.”
- Implications on foreign policy-triangular offense
- Chinese nationalism; will it assert its political clout?
One Last StoryRe-evaluation of the individual contribution in the China economy; super-imposition of the American dream “We might remember that America grew strong on the enterprise of its own immigrants who arrived with little and whose American dreams often began by selling goods from wagons and suitcases. Most of China’s dreams also begin with modest means.”