Outsource this.

A brief plug for the superb feature on outsourcing by Jim Fallows in the July/August issue of The Atlantic [full disclosure: I have a piece in the same issue]. I do not read widely in the ever-expanding universe of business books about China, but I will venture to guess that no other author – Chinese or otherwise – has captured the atmosphere of Chinese light-industrial factories so well. That said, as compelling as those descriptions are, I found myself most taken by the last section of the feature, when Fallows reaches conclusions that will no doubt be uncomfortable to Americans who still believe that China’s burgeoning economic might is a fact that can be “managed.” The piece deserves to be read in its entirety (here, for subscribers only) to appreciate the argument, but the second-to-last paragraph is a powerful introduction to the point that Fallows ultimately makes:

American complaints about the RMB, about subsidies, and about other Chinese practices have this in common: They assume that the solution to long-term tensions in the trading relationship lies in changes on China’s side. I think that assumption is naive. If the United States is unhappy with the effects of its interaction with China, that’s America’s problem, not China’s. To i­magine that the United States can stop China from pursuing its own economic ambitions through nagging, threats, or enticement is to fool ourselves. If a country does not like the terms of its business dealings with the world, it needs to change its own policies, not expect the world to change. China has done just that, to its own benefit—and, up until now, to America’s.

I’ll be curious to see how this essay is received by those – especially in Congress – under the impression that China can be managed through bullying.

Anyway, I’m off to Beijing in the morning. I’ve just checked the weather forecast, and it isn’t pretty: 105 degrees Fahrenheit for Friday. It’ll be a joy to see how the roses planted in the median of the many miles of airport highway (presumably, part of the Olympic beautification campaign) are taking to this dose of ugly Beijing reality.

2 comments

  1. if you are going to call yourself “shanghai scrap” I think you should have some scrolling “ticker” with the Shanghai markets for Copper and Aluminum.

  2. Randy, that’s an excellent idea. If you’ll sponsor the subscription, I’ll figure out the flash programming. How’s the south?

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