Blowback from China

Those seers who predicted America’s infatuation with China would backfire are looking awfully smart these days.

As Business Week reports today,

Nearly a decade after China’s entry into the World Trade Organization, many foreign companies say the warm reception they once received has turned frosty. While China can still be highly profitable, some question how long that will last as Beijing changes the rules to give a lift to its domestic companies, especially state-owned enterprises.

The piece goes on to quote government officials and others who share several anecdotes suggesting China is no longer a “level playing field.”

News flash: It never was a level playing field. When the laowai (foreigners) showed up, they were “partnered” with Chinese enterprises, usually failing, government-owned or -backed businesses with out-of-date equipment and no management prowess. We got what we wanted (entree into the world’s most populous, and arguably, cheapest, place to manufacture), and so did the locals (massive investment, access to Western business methods, and most important, customers).

But for those critics who counseled against the rush, recent events are making them look more and more prescient. Like a novice bodybuilder on steroids, given its new muscles, China wasting no time in flexing them, whether it be in currency markets, its ever-changing tax laws, its military buildup, its bull-snorts over mining the moon’s minerals, and so on.

And given China’s eons-long history of opening the door to outsiders only to slam it shut again, in hindsight, should we be at all surprised?

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About Mike

Mike Buetow is editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He is also vice president and editorial director of UP Media Group, for which he oversees all editorial and production aspects. He has more than 20 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow

2 thoughts on “Blowback from China

  1. Thanks for your commentary, Mike.

    As it was happening it was one of those things that seemed so obvious what the end game was likely to be that it is hard to believe that those decision makers who pushed the movement did not know it was going to happen.

    One must now suspect that a great many of those folks who drove the movement have slipped quietly out the back door to a very comfortable retirement with the proceeds of mortgaged future of US manufacturing. Watch for the long misplaced decimal point towards the location where it should have been all along.

    So it goes…

    Kind regards,
    Joe

  2. Mike,

    Not only are US manufacturers suffering, their former employees are, too. According to a study just released by the Economic Policy Institute, “Unfair China Trade Costs Local Jobs,” 2.4 million U.S. jobs have been lost to Chinese imports over the period 2001 – 2008.

    regards–george

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