We’ve all seen how Red China can say, ‘The Politburo would like a stadium here, please,’ and one will appear, thanks to underpaid labour. And over the last decade, the growth of Red China has been fuelled by willing corporations all over the world wanting to take advantage of its cheap labour.
   It makes perfect sense from a capitalist viewpoint. I have explored the dangers before—using the point of the “race to the bottom” where corporations seek cheaper and cheaper labour to get their goods made. For decades some have got fat off this strategy, and they believe they can continue it. However, they might have met their match with the Red Chinese, who might not be content being the assembly line to the world.
   Just as a Red Chinese planner in Beijing can draw a line on a map and order water diverted from a farming region to the city along that route, how can we be sure that such orders are not given when it comes to entire industries?
   One warning I have given for over a decade is the danger of Red Chinese companies, which have little respect for intellectual property rights, taking designs and selling them. The idea of a “third shift” is not unknown in Red Chinese manufacture, where pirate goods come out of the authorized factory—during the times when the place is meant to be empty. The companies can learn the ideas behind the goods, learn about the consumption patterns of the buying nation, and conclude: hey, why don’t we make the extra profit ourselves? (I have long been a supporter of Indian commerce instead if people truly sought a stable billion-population market—plus Indians in business speak impeccable English and have a common law system.)
   The likelihood is that a Red Chinese business commission could order entire industries shut, forcing factories supplying overseas buyers to stop their production. The commission could make whatever excuse it wanted, e.g. ‘This area is now designated a high-tech area, and not one for textiles.’ The buyers are left with no goods, effectively collapsing them. Then, seeing the demand for those goods remain, the Red Chinese government would finance the establishment of a rival company after a few months, exporting exclusively to it, and earning the extra profit itself.
   Not only would the Red Chinese be the world’s manufacturer, but it would be the world’s retailer.
   If you don’t believe this is possible, and that the Red Chinese are all capitalists, then think again. The Olympics have shown that little has changed in occupied China: homeowners were evicted forcibly at night, farms are being starved of water, churches have been shut down, and there have been more detentions of locals without charge in the lead-up to the event. The claim that Red China would open up as the Olympics neared, creating more freedoms—that’s what it told the Olympic organization in pitching for the 2008 Games—has turned out to be BS. Only because of the threatened loss of face has Red China allowed greater media access, otherwise I reckon it would have been business as usual.
   And for a totalitarian régime, the industry-closure technique could be an appealing way to spread its influence more widely.
   I doubt this warning will be heeded because it sounds ridiculous to anyone who has not either lived through or has had a family member go through the Communist régime’s handiwork. Or it’s too far-fetched because buyers could seek new production sources. Maybe they can—but it sure is hard finding goods that don’t have ‘Made in China’ stamped on them. Posted by Jack Yan, 11:54  permalink

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