Sunday, 3 February 2013

Made in China: a perilous cycle



This is a perplexing story and hardly a fairy tale.

Once upon a time, we avoided things made in China. It might have been the fact that those things were made by people living in a Communist state or that they were poorly made and ultimately disposable. Then two trends converged and, eventually, gave rise to a perilous cycle.

Firstly, mighty corporations decided to shift production to a place were labor was beyond cheap; never mind that the chosen place was located at the other end of the planet and the questionable status of that country’s political leadership. The whole issue was to generate more profits. Initially, the goal was to generate more profits for the benefit of shareholders. Thereafter, the profits were needed not just for shareholders, but also to pay the higher and higher wages of a handful of executives at the top of the corporate ladder. Now, with a dwindling consumer base in the West, profitability is also linked to the penetration of the Chinese market –global brands, but the products are largely manufactured in China.

Secondly, everyone wanted to have more for less. Why to buy one top quality item when we can buy ten made in China for peanuts on every shopping trip? We forgot why we used not to buy made in China and became accustomed to the new rule: nearly everything is made in China, so why bother checking labels to see where the products we buy are made.

The story starts to sound familiar. This is partly the reason why we finished living in the financial mess that the second decade of the 21st century has become.

It is perplexing, but while importantly contributing to make modern China, the West has also become increasingly dependant on the heath of the Chinese economy --and western corporations dependant on the outlined perilous cycle. We support free trade and capitalism, but we cannot see much of a levelled field and fair game here.

Please stop reading for a few seconds and see the connection between the two outlined trends! Please also keep them in mind while you read the rest of the post.

Among the consequences of this perilous cycle, we can identify the massive transfer of technological know-how to China, which through natural assimilation or industrial espionage has contributed to China consolidating a solid technological lead –the process will not be reversed. While the U.S. and its allies engaged in costly military incursions in Afghanistan and Iraq, China quietly consolidated its resurgent technological base and started to exercise greater control over the supply of natural resources. They went shopping in Africa and elsewhere and since the recession, the shopping trips have also included prime real state in the West along with important industrial assets.

You might ask yourself what all of these has to do with security?


  • China will increasingly own (or continue to copy) strategic technologies. Please bear in mind that unlike the West and emerging democracies, China bypasses international law whenever they consider it necessary. Yet, they are starting to call the tunes and the U.S. and Europe look increasingly impotent whenever they infringe copyrights, patents or the like.



  • What about state-sponsored technological espionage? What about the growing number of incidents involving the (state-sponsored?) hacking of the servers of top online providers and even the websites of state agencies? Do you sense the impotence of the U.S. and Europe when it comes to dealing with these concerning and escalating cyber attacks?

  • While the U.S. and its allies continue to hemorrhage money in Afghanistan, China has the surplus resources required to build an enormous and sophisticated defense apparatus. Probably in the second decade of the 21st century, China might invade Taiwan. Perhaps sooner that that, China might engage in trial naval skirmishes with Japan. What the U.S. and Europe can do about it with their more than exhausted budgets, their faltering economic growth, and their growing dependence on the health of the Chinese economy

  • On top of the amorphous security component the Chinese deploy overseas to protect their interests, which has included the use of convicts in Africa and quasi-mafias, they already have an answer to Private Military Companies in the form of state-sponsored security companies. These Chinese forces are hardly part of development strategies or attempt to promote values oppressed people aspire to such as democracy and justice. What are we doing about it?


The list of security concerns that the perilous made in China cycle has engendered is long indeed. The point here has been simply to highlight a problem we all created and for which so far there is no escape. Any idea how we can break free from this cycle?

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