Irony, Musing

Made in China

photo of man wearing maskThe whole world has heard of the Coronavirus and how half of China is under quarantine.  Over the last couple of weeks, it’s been announced Disneyland in Shanghai and Hong Kong are both closed indefinitely.  Apple has said they will lose money this quarter because factories are shut down in quarantined cities. Last week there was a report on my local news station about how many wedding and quinceanera dresses are made from fabric from China.  The factories haven’t been sending shipments since the quarantine and that means no dresses.  What most people fail to realize is these things are only the tip of the iceberg. It sounds like I’m fearmongering but I’m not.

Many years ago, I read a book called A Year Without Made in China by Sara Bongiorni.  The book follows a family who decided to forgo buying anything made in China for a whole year.  It started out as sort of a social experiment but it became more than that. The family found it virtually impossible to buy certain things not made in China.  In some cases, the things they needed (parts to repair something) were only made in China.  There was no other alternative. After reading this book I began taking stock of where the things I bought were made. I noticed a fair bit of China as well as other Asian countries and India with a few other places scattered here and there. At the time that I read the book, I just thought it was a sign of the times that American factories were dead. It never occurred to me how a disruption in the manufacturing of goods in another country could affect day to day life in our country, yet here we are. I’ll be honest I don’t remember if that was even touched on in the book.

This virus induced disruption of goods is definitely a wake up call. It throws into sharp relief how dependent we all are on other countries and how interconnected we have become.  I wonder if this disruption will be the catalyst for bringing manufacturing back to America. For decades, America has all but outsourced the manufacture of most everything to other countries. A few years back there was a new push to “Buy American” but if there’s anything American’s love it’s cheap crapola and American made products aren’t cheap. After all, American made products have to be made by Americans who need to have a living wage which means the factories can’t run sweatshops and sell cheap goods. However, if we can’t get the goods from cheap labor places what is the alternative?  You know what they say, “If you want something done right you have to do it yourself.”  Maybe it’s time we did it ourselves or maybe we’ll just find a cure for the virus.  The sad truth of it is this probably won’t be a catalyst to ‘do it ourselves’ again because the start up time for a new factory would be years. We no longer have the capability, facilities and manpower to do it ourselves. We’ve essentially outsourced the things we don’t want to do which is another topic for another day.

NOTE: If you are looking for a new read, I highly suggest reading A Year Without Made in China.  It really is quite fascinating. Click on the title about to go directly to Amazon or you can be cheap and get it for free at the library.  

 

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3 thoughts on “Made in China

  1. I was not at all surprised by the impact to Apple and even spoke to my husband about shorting their stock. Apple’s manufacturing arm is so concentrated in China that the company pretty much has its own province (complete with workers’ barracks – the people there have truly sold their souls to that corporation, it’s gross). It’s not just manufacturing though, China is a major source of demand for their products. The introduction of legitimate competitors in China had already exposed vulnerabilities in Apple’s business model.

    The entire Davos set of American businessmen have been pushing operations to China. They love their wage-slaves and the governments that keep them that way. Michael Bloomberg’s company is arguably more dependent on China than the US, which makes it incredible the dude is running for president here.

    All that said, it’s actually not as hard as people think to bring manufacturing back to the US. My husband and I own a company that develops financial and operations management software for large, international corporations, which includes designing software for manufacturing operations and logistics (we have 20,000 orders for x, so y robot needs to get stamping z part). Our auto industry changes what they are cranking out every few months with almost non-existent downtime, and cars are a heck of a lot more complicated to build than widgets. I was trying to explain this to a friend recently who was freaking out about the amount of medical supplies and pharmaceuticals that are only produced in China. “There will be a shortage of IV bags in hospitals!” I mean, really, I could 3D print that stuff at home, that’s not a crisis. It’s not hard to get a factory up and going for that.

    Regardless of the policy response, we may see this happening in force because there’s finally an economic justification for it. The tax code now encourages domestic investment. We have a lot of formerly discouraged unemployed heading back to the workforce. It’s unfortunate that it takes this level of human despair to see things shift around, however.

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    • In theorry it’s not hard to get a factory up and going but the renovation of existing construction, securing funding, finding enough people to staff the facility and train them on the equipments – all the little things that make a company run. That’s the kind of stuff that takes time. However, I do think that kind of manufacturing could return. But, I can’t see textiles returning. My Grandmother and Great Aunt both worked in textile factories. The factory my Aunt worked employed over half of the people in the tiny town it occupied. When it closed in the 90s, that tiny town of 3,000 decreased to under 1.000. My Aunt could sew anything but with no textile factories around her sewing skills were pretty much relagated to the odd semstress job.

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      • Yeah, textiles are rough. I remember reading a similar story about a town that was built around a Fruit of the Loom factory in rural Kentucky. The factory employed the entire town; even school teachers worked there in the summer. When they left, it was like a financial crisis microcosm. Suddenly everyone was unemployed, had no money beyond a couple weeks, and they were so remote that they couldn’t even reasonably commute to work elsewhere.

        That’s kind of the story of manufacturing in a world with such significant trade imbalances though. Companies that do not have complicated supply chains seek out towns exactly like that because it’s as close as they can get to China or Mexico. And they don’t think twice about cutting them loose either. Earlier generations would have not have been cool with this sort of thing. (Imagine saying “learn to code” in front of someone from the Greatest Generation.)

        I think you are right about the arguments to be made here. At some point, having a diverse and independent economy (i.e., not just people in services) is not just about the economy, but can become a national security issue.

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