China gets it all?

By Published by The Editorial Board

Published: June 25, 2008

Is it all going to China?

To the editor:

I often hear people say, “Everything is going to China,” and I sense that some view China as “the enemy” even as they flock to their favorite discount department store in support of China’s GDP.

Those sentiments are understandable in a region, such as ours, that has felt strongly the effects of outsourcing. However, we should be careful with the metrics used to define our enemies, because in this global economic system, the enemy du jour could be tomorrow’s strategic friend.

China is creating an economy where there wasn’t one before — and it’s doing so at a rate that history has never seen. The economic system that took the United States roughly a century and Japan 40 years to develop has emerged in China in less than 20. According to Pricewaterhouse Coopers LLP, China’s economy could overtake ours as the world’s largest by 2025, growing to roughly 130 percent the size of the U.S. economy by 2050.

However, there is another economy which is on pace to break China’s record. Vietnam’s economic growth rate is currently charting at nearly 10 percent per year. And, the same jobs that “China stole from us,” as I’ve heard people describe it, are being taken from them by Vietnam. Countries across the globe are competing; India, Brazil, the Middle East and Russia look to be the next hot spots.

Inflation is rising swiftly in China — the consumer price index recently reported the highest increase in over a decade — and the state-mandated cap on gasoline prices was just recently raised. China’s manufacturing competitiveness is declining as well, hence, the labor movement to other countries. In a recent survey of foreign-owned manufacturing companies in China, 20 percent indicated plans to move some or all of their manufacturing to other countries. Chinese workers are demanding higher pay as a result of the rising cost of living — and some are even staging employee walkouts. Meanwhile, China has in many ways sacrificed its environmental conscience for economic growth. This decision will undoubtedly come back to haunt them as the delayed health and remediation effects of stifling pollution emerge.

While some view China as the enemy, it would be wise to consider the average Chinese person before drawing overly broad or specious conclusions. The average Chinese worker lives far below the American poverty level and the country still struggles with a quasi-communist government, an abysmal record on human rights, crippling classism and abject corruption.

Personally, I don’t see China as our enemy. I see them as a country that is dealing with the inevitable balancing forces that result from exponential growth and fundamental change. However, while it portends an attractive emerging market for American suppliers, I am concerned about growing consumerism in China as the middle class expands. Demand for personal wealth management is expected to reach $2 trillion by 2015. On that note, consider what might happen if the average Chinese citizen was no longer satisfied to dine on a bowl of rice and could afford more. What if their tastes merge toward fillet mignon or New York strip? How will that affect world natural resource supplies? And, how will or should we (America) respond, within our own borders, to such global trends or events?

In many ways, China may be its own worst enemy. Yet, the Chinese economy and others around the world will become more important to ours as trade blurs international boundaries. The balance between staunch independence and strategic collaboration is not easy to find, but nonetheless vital to American interests. Finding that balance, while respecting the rights of the world community, practicing wise environmental stewardship and keeping America safe and strong should lead the long-term agenda for our elected policy makers. These are high expectations, but absolutely vital to our future, in my opinion. Please consider this as you choose a candidate in the upcoming election.

DAN CUMBO

Danville