Monday, December 5

A China Perspective

It's amazing how stepping out of your normal environment gives you a completely different view on the world. This always happens to me when I travel somewhere culturally 'different' like Myanmar or China this year.

So much of our social conditioning is dictated by our media. And whether we like it or not it dictates our view on the world. Just as the American and EU governments attack China for 'dumping' products on our markets, so the Chinese media highlight the tarrifs on their exports holding back the raising of their living standards.
For every paranoid article published in the Wall Street Journal or the Financial Times, a corresponding counter story appears in state media in China. And so it goes on.

What is suprising is how cheap some of the Chinese made products are in the West when compared with prices in China. In Shanghai, to keep my young baby entertained, we shopped for some toys. Now we are 'lao wai' (foreigners) so our street bargaining skills may not be up to Asian standards. But many toys are just a fraction cheaper in Shanghai than they would be in London. And this is not unique to toys.

If you run a factory in China producing a 100,000 'widgets' and you can 'run-on' an extra 20,000 at a nominal marginal cost to export, why not.

Are the Chinese selling (dumping) below cost? Are Western companies negotiating really hard and getting great prices? Or are Western countries really just getting a 'good deal' on the prices they pay?

There is one answer that we needn't ask the question for - China is going places really quickly. The Chinese aquire knowledge at an incredible pace. They build the highest most highly engineered buildings. They carry hundreds of millions of people on their trains each month. They produce billions of products, from plastic pens to the most advanced mobile phones in the world. And they have pride in what they do, in what they achieve and in what they create.

It is eye-opening to get a different perspective and to see things with your own eyes. I am struck by an enormous admiration for the people of a city that has built thousands of skyscrapers in a matter of years. And also by this country that is charging along to embrace global trade, with only a few years experience. If this is a race then Western economies ought to make more of their headstart.

From Shanghai with love


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