China: An object lesson of where globalization is leading us.

By Chuck Kelly

OpEdNews.com

     China is emerging as a world-class superpower. It represents the epitome of the goals of globalization: Markets are mostly free of government restrictions on the ways businesses treat workers or the environment. Those who produce the cheapest products""no matter how they do it""drive others out of business who can't compete on the basis of price. Individual success is richly rewarded, and There are no safety nets for those who are left behind.

     In other words, China is the globalization advocate's dream come true. It's also a terrible predictor of where globalization is taking us. The effects of China (and others) on the U.S. and the world are also indications of the failures of our national policies""both economically and environmentally.

     Even America's conservative press is telling us what's happening, although, somehow, they seem unable to connect the dots. Consider the following three excerpts from The Wall Street Journal. (The discrepancy between Journal's excellent news reporting and its editorial policies have never been clearer. The following news items clearly describe what's happening to our world""yet, the Journal continues to support unmanaged world trade and opposes environmental controls on corporations.)  

From The Wall Street Journal, November 13. Behind China's Export Boom,
Heated Battle Among Factories As Wal-Mart, Others Demand
Lowest Prices, Managers
Scramble to Slash Costs

SHAJING, China""Under the corrugated-metal roofs of Ching Hai Electric Works Co., hundreds of workers toil in six plants to meet orders for millions of small appliances. Inside one factory, ex-farmers bend over a clanging conveyer belt where they turn squid-shaped hunks of steel and wiring into electric fans. The fans cost about $4 wholesale and eventually will retail in the U.S. for $15 to $40 through such online stores as Amazon.com.

This is the kind of picture U.S. politicians might conjure up when tapping the hot-button issue of American jobs lost to the flood of Chinese exports. But China's smaller manufacturers themselves face brutal new competition right at home.

China, one of the world's busiest factory floors, increasingly suffers from a production glut, and the big overseas retailers such as Wal-Mart Stores Inc. that soak up China's exports have been quick to capitalize. They're demanding rock-bottom prices and forcing factory bosses to cut costs any way they can in order to remain in contention for export orders. The average wholesale price for Ching Hai's fans, juicers and toasters has tumbled to $4 from $7 a decade ago, according to company executives.

It's the survival of the cheapest. At Ching Hai, manager David Liu has cut his labor force in half, to 1,500 workers, even while maintaining the same level of orders. The company's starting salary of about $32 a month is some 40% less than the local minimum wage. Many workers put in 18-hour days with minimal training and constant pressure to boost output. Despite the cost cutting, Mr. Liu says Ching Hai is just barely profitable, although he declines to provide any figures".

Buyers are moving aggressively to play one factory against another. "As things get more competitive, the pressure that comes along with that, yeah, we try to take advantage of it," says Gary Meyers, a vice president in global procurement at Wal-Mart".

Ching Hai employees say they are sometimes asked to work as long as 18 hours. Though the city's minimum wage is about $56 a month, Ching Hai starts new recruits at that low $32 level and promises subsidies for food and lodging to make up the difference".

The competition is making it harder to improve conditions for Chinese factory workers. As abuses come to light, many multinationals are enforcing codes of conduct for suppliers. Among Wal-Mart's "Standards for Suppliers" are demands that factories comply with local laws for wages and work hours. Wal-Mart also forbids forced labor and child labor, and promotes proper training, safety and clean restrooms.

But many low-cost factories in China ignore such codes, and many government officials enforce them haphazardly. Chinese labor experts say officials worry that enforcing standards would increase costs, deter investment and undermine local economic development".

"Everybody is here trying to make money," Mr. Liu says in the shadows of his showroom, where the lights are shut off at lunchtime to save money. "I just never thought it would be so hard."

     This is the kind of world that globalization inevitably leads to: One in which the country that has the worst working conditions and poorest wages "wins" the jobs of the world. And workers throughout the rest of the world see their standards of living deteriorate.

     Incidentally, how often do you read about Wal-Mart""and a total disregard to fundamental human rights""in the same context? It's damn near automatic.

     Study the following sentence. It's a classic, and always accompanies the willful violation of moral standards. "Among Wal-Mart's 'Standards for Suppliers' are demands that factories comply with local laws for wages and work hours. Wal-Mart also forbids forced labor and child labor, and promotes proper training, safety and clean restrooms."

     This technique of corporate America is as old as the hills:

  Proclaim high moral standards,

     It's just like the CEOs who promote subordinates who have no moral standards, knowing that they will cut costs and maximize profits""even illegally""and the CEO can remain blameless. Globalization and the Environment

     Of course, when an economy shifts from agriculture and small manufacturing to large manufacturing, new demands are placed on the environment""not only on the country itself, but worldwide.

This excerpt is from The Wall Street Journal, December 3. China's Growing Thirst for Oil
Remakes the Global Market Beijing's Buying Keeps Prices
High""and Could Reshape
Politics of Middle East

With its factories working overtime, and its consumers on course to buy almost two million cars this year, China is developing a world-class thirst for oil. And its hunt for steady supplies is reshaping the global energy market, the environment and world politics.

China""which this year surpassed Japan as the No. 2 petroleum user after the U.S.""is increasing its oil purchases even faster than it is pumping up its brawny economy".

So far, the most obvious impact has been on prices. In recent years, China has drawn fire in the U.S. and Japan for exporting deflation, as its factories pump out low-price T-shirts, sneakers, radios and other goods. In the $1 trillion-a-year market for oil, the opposite is happening. This year and next, China is expected to account for about a third of the increase in global oil demand".

Meanwhile, China's mushrooming fleet of cars is adding to worries about this smokestack nation's impact on the environment. In the next decade, the number of cars on Chinese roads is expected to grow fivefold to 100 million, approaching half of the U.S. total, according to the Development Research Center, a government think tank. China is set to tighten its emission standards by 2005, and in 2008 it plans to introduce standards that could be even tougher than those in the U.S.

"If all our bicycles turn into our cars, that's a horrible figure," says Zhai Guangming, retired director of oil exploration at state-run China National Petroleum Corp. "It would scare the world.""

Still, many analysts are wary of a Beijing that could begin to feel boxed in by its energy needs. The study noted that China might emerge as a major arms supplier to the Saudis. Other analysts fear that China might be tempted to trade weapons technology for access to oil in countries such as Libya and Iran".

     The previous two articles highlight several disasters caused by""or aggravated by""our own Congress and Executive branch. By making it legally acceptable to abandon American communities and workers to countries like China, we've effectively frozen working-class wages at pre-1973 levels (adjusted for inflation).

     In addition, the countries that got our industries now increase the world-wide demand for oil""thus raising the price of oil to American consumers (workers included), while enriching the entire oil industry and their investors.

     The higher costs of energy force countries like China and North Korea to seek ways to get money to purchase oil, possibly by selling weapons technology and materials to countries like Libya and Iran.

     And, believe it or not, even the Chinese recognize the dangers to the environment, as more people drive cars and consume energy at ever-increasing rates: It "plans to introduce standards that could be even tougher than those in the U.S." How's that as a horrible comparison with the Bush Administration's head-in-the-sand stance toward the environment? The U.S. can't beat even the Chinese for having a minimally-acceptable moral concern for the future of the environment.

     So, drive your Hummer H2 while it's still legal. Let's hope that, eventually, even the Republicans will recognize the damage they've done to the futures of their own children. Globalization and Quality of Life

     Score another victory for Republicans and conservative Democrats who believe that an economic system should benefit primarily the winners""and the devil take the hind most. Globalization is making that an absolute certainty.

     Many in China like the new economy that globalization has brought. They are "successful," and richly rewarded for their efforts. But their children are also losing their childhoods.

From The Wall Street Journal, December 4. The New Stresses Of
Chinese Society Shape a Girl's Life At 10, Bella Juggles Exams,
Piano Lessons, Swimming
And Her Parents' Anxieties

" Now that reforms have dismantled this system of collective endeavor, Chinese parents are pushing their children to treat every aspect of life as a competition to better prepare for a world""unlike the one in which they grew up""that doesn't have a safety net".

"When we were young, after we got home from school, we would just play," says Zhou Jiliang, Bella's 36-year-old father. "For her, you can count the amount of time in a year that she plays in hours, not days." Mr. Zhou, an engineer at a state-owned steel company, often assigns Bella additional homework. That's on top of her regular homework, outside classes in essay-writing, math and English, and a daily hour of piano practice. "It's not that we want to be brutal to her," he says. "It's that China, this environment, doesn't let you not do it."

Bella's life in most ways is better than anything her parents could have experienced, and the opportunities she has are available only to the urban middle class. She attends the elite Yangpu Primary School, a four-year-old institution that charges $1,500 annually in tuition and other fees and rejects 80% of the applicants.

She speaks some English ("Men like to smoke and drink beer, wine and whiskey," she observed in English one evening on the way to her piano lesson.) and knows her way around the family computer. She has her own bedroom in the family's 650-square-foot apartment, something unheard of in her parents' generation. The family bought a larger apartment two years ago but squeezes into the old one because it is closer to Bella's school".

     Now that we've given most of our manufacturing industry to China""and we're in the process of giving all our other jobs that don't absolutely have to be done in this country to India and elsewhere""China, India and other fine civilized countries are now setting the living standards for the world.

     In other words, Republicans and conservative Democrats like what's happening in the world economy because now, in order to compete, American workers must:

  Forget childhood. Since winners take all""and losers get a life of drudgery""preparation for the competition must start at birth. (Of course, those who inherit a lot of money will simply enjoy the lower prices they have to pay for luxury living.)

     Wealthy, educated citizens of the world have great lives""consuming the world's resources with abandon""while the peasants service their every need.

     What a great economy the Republicans and conservative Democrats have given us.

     (Note: The above excerpts of three extensive articles are presented for purposes of brevity and criticism only. Those who are interested in this subject, and would like to appreciate their full impact, should read the originals.)

Chuck Kelly is at http://www.KellySite.net. He holds a Ph.D. in industrial communications from Purdue University, is now a retired management consultant, and author of the books, THE DESTRUCTIVE ACHEIVER, THE GREAT LIMBAUGH CON, and CLASS WAR IN AMERICA. This article is originally published at opednews.com. Copyright Chuck Kelly, but permission is granted for reprint in print, email, blog, or web media so long as this credit is attached