The China Price: The True Cost of Chinese Competitive Advantage

A very well written book. Harney manages to illuminate a macro economic topic on a human scale, by virtue of an undeniably honest voice backed by copious and hard-earned research. More numerical data would be a big boost, but that belies the question of whose data to use. I would love to find a book like this but about India, if anyone has suggestions.

Alexandra Harney did an awesome job investigating and researching for this book. Although it was written prior to the global economic downturn, this book is pretty current with a comprehensive analysis. Her writing is informative, colorful, thought-provoking, and objective. She did a superb job seeking out the right people and asking the right questions. I enjoyed reading about the people she interviewed and in some cases followed around. These people included an illegal coal miner in Shanxi, a factory girl in Guangdong, two different impressive "model" factory managers, Zhang Yisheng and Yin Guoxin, a self-taught lawyer Zhou-Litai who became a celebrity winning payouts for workers, as well as representatives of major brands such as Wal-Mart, Reebok, Adidas, Timberland, and analysts at various think-tanks and advisory firms such as Jason Kindopp. Many people eating meat would rather not find out how the animals are killed and processed. Likewise, we all enjoy affordable products manufactured or assembled in China, but few of us have anywhere near a complete understanding of precisely what people do to provide these billions of products at such low prices to our big name brands and distributors. The overwhelming human sacrifices and environmental damages often concealed to achieve these low prices is haunting. Some of our big name brand corporations actually have increased costs by sending inspectors to audit factories for health and safety, but the big name brand corporations still seek the lowest prices, thereby prompting the competing factories to agree to terms so low they are impossible to meet without secretly compromising health and safety at other undisclosed locations. China's government in Beijing has passed some pretty good labor laws and health and safety laws, but due to Chinese people's shared drive for more money combined with Western corporations drive for the lowest prices, many laws are commonly not enforced at the local level. Managers of factories are exceedingly competitive. In order to stay competitive and not lose contracts, they must lie to safety and health inspectors, pay bribes, or cut any number of corners. They do it to stay afloat and make money. Many factory managers argue that if they don't cut corners, their competitors will--to win the contracts--because Western brands seek the lowest prices. Implementing and enforcing a sound set of regulations has been an uphill battle. A significant portion of the factory owners and local government officials ignore environmental, labor, and health and safety laws, in order to get more money. Chinese judges and courts, with government backing, have been increasingly awarding plaintiffs more compensation to pressure small factory owners to better adhere to health and safety standards. Also, NGO groups have succeeded in better informing migrant workers of the Chinese laws. There have been improvements. Nonetheless, migrant workers continue to accept the most dangerous

READ THIS BOOK - if you want to better understand Chinese economy and how it impacts the global marketplace. SKIP THIS BOOK - if you want to continue to buy goods with your head in the sand and complain about the loss of local manufacturing jobs. (Most) people seem to want goods at the lowest possible cost - regardless of the damage done along the supply chain. Global enterprises scour the world for the cheapest sources, and China is currently the main supplier of the labor to make goods. That's because it has the world's largest supply of poor laborers, along with adequate infrastructure to meet the demands of business. Chinese businesses follow local labor laws only so far as they feel they can still earn what to them is a reasonable profit. It's all about supply and demand - with current profits being by far the biggest consideration for most businesses, and the lowest prices by far the main consideration by many consumers. There's nothing really new there.

This book totally surprised, dismayed, and taught me to understand how miserable the bottom line in price can actually be. A must read! I read an article in Wired magazine that told a piece of this story, but the toil of tens of millions of migrant Chinese young women workers who voluntarily work 14 to 16 hour days just blew me away. How China is caught in a price war while trying to satisfy workers rights. How pollution can be so bad to save those extra pennies. Thousands of small companies right next to each other making the exact same product and how their fortunes can change in days. A fascinating read! You will never look at the tag "made in China" the same way again.

Discussions of free trade sing its virtues, while the reality is something different: the unequal terms of that trade, especially vis a vis China and the United States, where two sets of rules are at work. One result is the 'China price' and the growing imbalance in trade relationships. The larger picture shows the other side to globalizaton: the exploitation of cheap labor, disregard of environmental law, and the generally totalitarian nature of this mutant form of capitalism. This book usefully presents the information absent from most public media discussions of the issues of free trade and is an eye-opener. However, the portrait given is of an unstable situation that can't last forever, whatever new mutation lies down the road. Residents of the United States have been caught up in an ambiguous contradiction, the destruction of domestic industry, and the addictive temptations of Walmartization. As the wheel turns from this unstable new development in global capitalism to the next combination, some awareness of the disinformation created by 'economics' discussions in the United States is needed to correct the long-term destructive character of this confused, yet to some very profitable, constellation of capitalist trickeries.