China Shakes the World:
A Titan's Rise and Troubled Future - and the Challenge for America
In China Shakes the World, James Kynge provides a history and explanation of the Chinese economy and its impacts felt around the world. Kynge started writing the book sometime in 2004 and it was published in 2006. The book is filled with experiences and conversations that took place from around 1982 when Kynge was studying at the Shandong University until the time that he finished writing. His travels tying in the impact of the Chinese economic progression include regions of Germany, Italy, China, and even the United States Midwest.
The book begins in Dortmund, Germany where the Thyssen Krupp steel mill once employed nearly ten thousand people and had since been shut down. At one point it was one of Germany's largest steel mills that went under due to dramatically reduced steel prices around the world and heavy taxation as a result of the drag on overall economic activity. A Chinese steel company out of Jinfeng bought the mill at auction prices and systematically dismantled it, shipped it, and reassembled the plant in a small town along the lower Yangtze River. Not only did the Chinese company of Shagang receive every last bolt at scrap prices, they also bought the blueprints and the technological insight that it was missing. This crucial element is what has enabled the Chinese to make gains in industries that have had a serious lack of the proper manufacturing technology to compete with nations worldwide.
This transfer of knowledge is happening across many different industries. In one part of Kynge's book he speaks of his travels to Italy where jewelry manufacturing and the artisan industry overall is dying out from the competition brought about by China's ability to slash prices. Europe itself is battling to remain in the textile trade as China gains a steadily increasing market share. Japan is even mentioned at one point concerning the Hongda that the Chinese were manufacturing with the point to compete with Japan's Honda. The list goes on and on until the problem of closing factorings gets brought to a region much closer to home: the American Midwest.
The issue that Americans are facing with the offshore manufacturing of everything from shoes to computer parts is that Middle America is losing out. Offshoring is extremely profitable for those at the very top of the chain. The directors of huge organizations have an easy time cutting costs through moving operations into countries with cheaper labor, though the burden is placed in middle class communities who rely on the local factories as a way of life. As the already rich are getting exponentially richer, the middle class is shrinking at the same rate that lower income America is growing. Manufacturing in China in particular is profitable due to the lack of regulations mandated by the Chinese government. There are no safety regulations for the workers, there are no taxes owed on emissions that contribute to the tremendous amount of pollution, and workers in China are being paid similarly to those who lived and worked in the era of the Industrial Revolution.
Aside from the issue of Middle America losing more jobs every year due to this outsourcing, many people also have an issue with the ethics of doing so. There are very places among the developed world that would allow their people and environment to live under such conditions. Many people have themselves asking whether or not profiting from the lack of regulations is right.