Get Your Used (stolen?) iPhones at Best Buy Shanghai (Xujiahui, 3rd floor)

Just in time for the Thanksgiving holiday shopping rush I come across evidence that at least one high-profile US-based entry into China’s cut-throat, price-sensitive retail market isn’t working out exactly as planned. I’m talking about Best Buy, North America’s largest electronics retailer. Three years ago they entered the Chinese market with plans to counter China’s aggressive sales culture with a low-key, service-oriented sales method (I wrote about these plans in early 2008 for MinnPost). They might have succeeded – but I’ll leave that question for another time. Tonight I’d like to talk about where they’ve clearly failed: security. Continue reading

More on Apple and manufacturing in China.

Last week I posted on the bizarre spectacle of Apple’s fanboys rallying to the defense of their favorite computer company on the occasion of a negative Daily Telegraph story on Apple’s safety, environmental, and labor record in China. To my surprise, the post generated a significant amount of traffic and – best of all – a really good, fan-boy free comment thread. I think the most interesting theme that emerges in the discussion is whether or not Apple has really accomplished anything by disclosing the failings of its suppliers. Supporters of Apple, obviously, think it’s worth noting positively; others (me included) see it more as a PR stunt that deflects attention from the company’s worsening record. Anyway, I wasn’t going to say much more about the topic, but this morning I woke to a new comment on the thread (#16), left by Jesse Covner who blogs at Taikongren’s Advice (based in Suzhou). It’s worth reading the entire comment thread, but it’s the last two paragraphs that I find most interesting, and which go far in answering some of the questions I’ve had on this subject in the last few days. In the first paragraph, Covner refers to Foxconn, one of Apple’s suppliers:

So getting back to Apple and Foxconn. Foxconn is a huge volume contract manufacture which offers lowest rates by strictly controlling costs and offering economies of scale. Meaning… less likely to hire good local managers. Less likely to invest enough in safety equipment. Less likely to look too closely at their vendors’ EHS compliance. This is the manufacturer which Apple choose. NOT every phone maker manufactures in this way. Nokia and Samsung have their own factories in China. They control their vendors better because of this. I believe that Motorola either has their own factory or uses long-time SOE vendors… but anyway, Motorola – the inventor of Six Sigma – gives extensive training to its vendors. [Shanghai Scrap note: I’ve been to Chinese facilities that supply Motorola and that don’t – to put it lightly – meet Six Sigma.] Continue reading

Why are the fanboys rushing to defend Apple’s child labor record?

[UPDATE: Outside of the Chinese media and the Daily Telegraph, it seems like nobody is particularly interested in covering Apple’s child labor record. TechNewsWorld takes a hard look at why, and comes down hard on a compliant, Apple-infatuated media.]

Spend any time reading online technology reviews and you’ve inevitably come across the Apple Fanboys – collectively, Apple’s most devoted customers, prone to blast away at any commentator with the temerity to write negatively about Apple’s products (or extol Microsoft’s). They’re a predictable bunch, but I must admit that I really didn’t expect them to show up for “Apple admits using child labour” a Saturday article in the Daily Telegraph by my friend Malcolm Moore (a very good reporter who follows up the article with an op-ed, here). Yet there they are, lambasting Malcolm at a rate of 2 to 1 (in a thread that now runs 120+ comments) for having the nerve to report that “only 61 per cent of Apple’s suppliers were following regulations to prevent injuries in the workplace and a mere 57 per cent had the correct environmental permits to operate.”

It’s worse at blogs devoted to Apple products. As just one example: an unusual number of commentators at TUAW (The Unofficial Apple Weblog) going so far as to suggest that child laborers at Apple are lucky. This borderline obscene example is a good example, and hardly an outlier:

“I would have jumped at the chance of build Apple mac at 15. think of the work experience. The headline should be “Apple giving teenagers valuable work experience”! 🙂

Presumably, the commentator wouldn’t have felt so lucky if he’d been employed at the iPhone manufacturer in Suzhou that recently exposed 49 workers to toxic n-hexane.

Snark aside, what distresses me most is an apparent erosion in the standards expected of developed-world companies operating in the developing world. Twenty years ago, when NGOs first started organizing around labor abuses at Nike and other foreign manufacturers in the developing world, misconduct much milder than what’s happening at Apple was cause for protest and boycotts. What’s changed in the intervening years? I’m inclined to say that consumers in the developed world have become acclimated, if not accustomed, to the idea that affordable products must be manufactured in facilities that don’t meet the minimum requirements of their home markets. But I’m not convinced, and I’d be interested in hearing other perspectives.

However, I am convinced of this: the Chinese public isn’t acclimated to the idea that companies like Apple demand and ensure better working conditions for employees and contractors in San Francisco, than they do for employees and contractors in China. So far, there’s been little call for Apple to rectify that situation. But as the self-reported violations pile up, I have no doubt that Chinese consumers will start to wonder why, and Apple’s advantages – whatever they might be – will start to erode in a market that the company covets badly.

[On a related note: In September I reported for Foreign Policy on the double standard that separates Apple’s US-based e-waste recycling initiative, and the pathetically inadequate one that it’s barely implemented in China.]

In the trenches, sorting scrap.

Sheepishly, I concede that this is the second or third post in which I’ve promised to get back to regular blogging shortly. But, you know, Chinese New Year leads into a new year of work, and now I’m bogged down in a couple of projects that require my fixed attention. In the case of one project, it feels a bit like sorting scrap – fines, to be precise, the exceedingly small pieces of mixed metals that come off metal shredders and are exported to China and other low-cost labor countries for hand-sorting. Below, an image taken at a facility devoted to this kind of recycling in Guangdong Province.

In the interest of dispelling some stereotypes: being able to identify, by sight and feel, various metals, is a skill, and the women who do this work – and they are mostly women – are highly sought by Guangdong’s recyclers, and highly compensated (by Chinese labor standards). For example, the woman in this photo is paid between RMB 2000 (US$291)and RMB 2500 (US$365) per month, for a forty-hour week, and she would have no problem finding another job, tomorrow, for similar wages, at a similar facility. Entry-level white collar workers in the same town would have a very hard time finding similar pay.

In any case, I’m sorting facts and figures (though I’m hardly as adept as a good south China metal sorter), sentences and paragraphs, and hoping to be free and clear in a day or two.

In the meantime, I hope you’ll join me in wishing the China Beat – one of the truly great China blogs – a happy third birthday. Even if you don’t visit China blogs on a regular basis, the anniversary post is worth reading as a quality guide for how and why to blog as a group. Very impressive.

Resumption of Transmissions …

The Chinese New Year holiday is coming to an end, and so is this blog’s reticence on a range of issues. We should be back to full-strength – or pretty close – early next week. For now, one quick Chinese New Year item that I meant to post before the holiday, and forgot. Here’s the deal: back in January, World Expo 2010 organizers told Shanghai Daily that nearly 20% of the more than 100 pavilions to be built for the massive event would not be ready for the opening on May 1. Part of the problem – and it was a big one – was that much of the migrant labor force required to build the 2.5 mile fair-ground and its pavilions was planning to take two weeks off to enjoy the New Year holiday. Below, some of those laborers enjoying a break outside of the terrific Dutch pavilion.

Anyway, a few days before the Shanghai Daily story ran, I happened to be at the Expo site, visiting one of the incomplete national pavilions (to be clear: not the Dutch pavilion). While there, someone associated with the structure told me that – out of fear of losing the structure’s two-hundred man labor force – New Year bonuses were being offered. According to this person, the regular daily wage at this particular pavilion (can’t speak for the others) was/is RMB 200, or roughly US$29.00/day. That’s one hell of a good wage for a Chinese construction worker, but – apparently – not nearly enough to keep a migrant worker with leverage – in this case, incomplete Expo 2010 pavilions – in his back pocket. And so, according to the national pavilion official with whom I spoke, cagey/homesick migrant laborers rejected offers of RMB 400 (US$58), RMB 600 (US$87), and RMB 1000 (US$145)  per day to work during the two-week Chinese New Year. Those are serious wages for white collars in Shanghai, much less a migrant construction workers, and I hereby offer my sincere respect to whomever was responsible for the migrant side of that negotiation. Alas, I didn’t manage to follow-up on what the ultimate outcome/wage was, but – with labor rates like that – I suspect that more than a few migrants called home to ask that the fireworks be lit without them.

Year of the Tiger blogging, coming next week.

China’s Migrant Laborers Enjoy the Downturn, take a Year in the Countryside

I spent the first half of November on assignment in Guangdong Province, and though I can’t say too much about what I was up to down there, I did come across some interesting labor-related items unrelated to my assignment.

So. In the space of two weeks I managed to visit 11 factories tightly connected to the export manufacturing sector (either as direct exporters or as raw material suppliers to exporters), and interviewed another dozen. No surprise, all but one conceded that business is down from 2008 – in most cases, between 30% and 50%. At the same time, there was near universal agreement that the numbers would be far more grim if not for China’s economic stimulus which – according to several participants – is directly accounting for some 60% of the economic activity in Guangdong – the famous/notorious export “workshop of the world”- at the moment. What does that mean, precisely? One example: below, at a factory ordinarily devoted to manufacturing electrical equipment for export industries, workers instead hand-assemble electrical transformers for government hydro-power projects.

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Good for China: the stimulus is working. Now the surprising parts. Continue reading

Exclusive Shanghai Scrap Interview: The Guy Hanging Outside My Window

While the rest of Shanghai’s media and blogs have been concerned with ethnic uprisings, military parades, and trade wars, Shanghai Scrap has maintained an unwavering focus on the ongoing renovation of his building’s exterior in advance of Expo 2010. As many others have noted, Shanghai is spending an inordinate amount of money to clean-up the city’s thoroughfares and buildings in order to impress the expected flood of Expo 2010 visitors from home and abroad. No doubt, Shanghai Scrap has benefited from the upgrade: as mentioned last week, Shanghai Scrap Tower 1 has been transformed, from a soot-streaked, brown brick  brutalist archetype of sorts, into a happy pastel South Beach symphony – of sorts. But the question remains: who are the workers who have come to Shanghai to do this work?

This afternoon, like most afternoons, an answer appeared dangling by a thick rope outside my window. For the purposes of this post, we’ll call him Mr. Q, and when we met, he was busy painting windows frames that he’d primed earlier in the week.  When I asked if I could take his picture, Mr. Q agreed, so long as the image didn’t capture his face.

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Scrap: How old are you?

Mr. Q: Twenty-four.

Scrap: Where are you from?

Mr. Q: Anhui Province. [ed. note: a relatively poor province directly west of Shanghai, and source of many of the city’s migrant laborers.]

Scrap: When did you move to Shanghai?

Mr. Q: I first came when I was sixteen. I’ve come back many times. Continue reading