Wednesday, January 27, 2010

Selling the Factory

It seems almost impossible to buy something nowadays that is NOT made in China. This may or may not be a good thing – depending on one’s point of view. It is certainly beneficial to China but how about the rest of us? There are inherent dangers in just looking at the ‘bottom line’, being influenced solely by the profit motive.
To me there are a number of problems that arise by sending all manufacturing off shore (to China):

• Loss of control. This loss is really a quality matter, certainly from a consumers point of view. For instance I, personally, would never knowingly buy anything from China which contains any milk products (after the melamine contamination scandal). Now there is Google’s controversy with the Chinese authorities.

• Confusion. As a consumer I am sometimes confused when I reach to purchase an item (principally a food item) which has a familiar ‘Australian’ name, only to find that it is either ‘Made in China’ or ‘Packed in Australia from imported products’. This last piece of information means ‘China’ as far as I am concerned.

• Wariness. I am very wary of Chinese assurances (or the assurances of Australian companies operating in China) that ‘wrong doers’ will be brought to justice and any lapses in quality will be dealt with accordingly. We all know that the Chinese judiciary is not independent but is State controlled (vide the Rio Tinto imbroglio with their Head of Operations in China being held in jail on charges of ‘industrial espionage’ and bribery). We all know that there are major issues with endemic corruption in all level of Chinese Government and business. These facts do not inspire my confidence in any degree.

• The other problem I have with the Chinese is that China is not a ‘friendly’ nation. By this I mean that they are not (yet) willing participants in World Events without throwing their (new found) weight around; that they are not an ‘open’ people but are actually very secretive; that they are ‘different’ and must be treated as such.

• Also, would China ever hold the rest of the world to ransom?

Much of what I say is, I know, a result of history. China, in the 18th and 19th Centuries, was treated very badly by the ‘West’, Britain in particular. There were the ‘opium wars’ and in general trade the Chinese were screwed by the Brits and other nations who wanted their tea, jade, silk and other products. Also as a colonial power the Brits took Hong Kong (ostensibly it was ‘ceded’) after the Chinese defeat in the ‘Opium Wars. Then of course there was the ferocious and unnecessarily barbaric invasion of what was then called Manchuria by the Japanese in 1931 and the infamous ‘Rape of Nanking’. The effects of all this still rankle and certainly influences the Chinese view of the ‘West’ (including Japan).

The Chinese have a point. They have been treated unjustly in the past and nothing festers as much as an unresolved injustice – no matter when it happened (I have written before about the injustice relating to Palestine and Israel). I suppose it could be said that they have learned from ‘us’ – and learned very well!

To get back to my original reason for writing this – by giving the Chinese the industrial muscle that is now evident (and the accompanying financial ‘muscle’) are we in danger of being held to ransom? Would China ever try to control events or countries by parcelling out favours, as it were – a little bit of money here a few goods there – to those who toed the line? They could but would they? Some countries would say the same about America – they would (with some justification) say that the Americans have done just that for generations. I suppose the Brits did it before the Americans and the Romans and Greeks before them even. But then these are (or were) all from Hellenic/Roman/Judeo/Christian heritage, which we sort of understand.

Is it really worthwhile selling the ‘factory’ to the Chinese (or any other ‘stranger’ nation) rather than trying to keep it at home where everyone knows everyone and things are familiar? Or does it all come down to ‘money’ and how much more profit would be made by transferring operations ‘off-shore’?

Now that there is a shift in the World Power dynamics I suppose I have to get used to the change and like it or lump it. But is will not be easy and I reserve the right to be wary about the quality of some products made in China (or elsewhere for that matter). The other side of this is to ask yourself the question, “Would the Chinese like it (or allow) others to take over their industries, to buy their factories?” Somehow I don’t think so.

I know that I am going to be accused of racism – but I actually have a great deal of respect and liking for the Chinese – believe it or not!!

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