User:ThiNguyen2021/sandbox
Introduction
[edit]China Price is known as the term for all products Made in China, Simplified Chinese: 中国价格; Traditional Chinese: 中國價格; Pinyin: Zhōngguó Jiàgé. Writer Alexandra Harney coined the term as the title of her book, The China Price. The book analyzes and shares the author's views on how products from China affect consumers globally and our living environment[1]. The Made in China label is considered one of the most recognizable labels nowadays because the country is the largest exporter globally, and the price of its products is much lower than products from the US and Europe, Japan, Etc. The products Made in China are mostly related to daily household items, including clothes, dishes, plastic items, children's toys, electronic appliances, Etc.[2]. Besides, the term China Price also reflects the concern of the domestic US and European manufacturers that much cheaper imports are discounting their products, but it also highlights the cost benefits for US consumers[1]. Besides, world competitors and policymakers say that China has an excellent ability to move from one export market to another for various reasons, such as low labor costs, inadequate regulations on worker health and safety, lax policies on the environment[1]. In addition, China Price is known for its low-quality imitations, which are manufactured or sold under the brand names of major brands worldwide without the permission of the brand owners[3].
History
[edit]China Price began to be used by world historians and economists more than a decade ago to describe the low cost of goods exported from China, especially to The United States[1]. Nowadays, as one of the world's largest exporters, Chinese products are available worldwide, making China's economy thrive strongly in recent years. Over the past four decades, China has implemented a series of market reforms that have served to open trade and investment routes, ultimately lifting hundreds of millions of people out of poverty. After the economic collapse of the Cultural Revolution in the 1960s that Mao Zedong launched, the organization of China's society was almost destroyed. After Mao died, in 1978, Deng Xiaoping became a leader, and he made policies to reshaped the country's economy [4], and farmers were granted the freedom to farm their land. After that, they could improve living standards and alleviate food shortages. In addition, the door to foreign private investment was opened when the United States and China re-established their diplomatic system in 1979 [5]. At the same time, China makes full use of the profits of cheap labor and rental costs, adding and subtracting low incomes from foreign businesses pouring into investment. As a result, China is gradually becoming the world's factory and an indispensable piece of the world economy [6]. Besides, China is also the fastest growing country globally, with an average growth rate of 10 percent over 30 years [4].
[7]When China's economy matured, its GDP growth had slowed down from 14.2% in 2007 to 6.6% in 2018. However, China's leaders have accepted such slow growth as a necessary step in the development process. Besides, they introduced a new growth model based less on fixed investment and more on exports[7]. That is why Made in China products with prices much lower than the market prices.
In addition, China is moving towards the "made in China 2025" plan. It got announced in 2015 that it aims to upgrade and modernize China's manufacturing industry into one of the ten most essential sectors through extensive government support to make China a mighty global power in this export sector [7]. However, the plan has raised concerns in other countries that China will violate intellectual property rights, which have long been a deep concern of the US and European authorities; these violations are expected to lower China Price and hurt. For example, in 2017, the Donald Trump Administration launched a Section 301 investigation into China's innovation and intellectual property policies deemed harmful to the economic interests of The United States. The former president then raised tariffs to 25 percent on all goods imported from China [8]. Thus, concerns about China Price have added to the strain on US-China relations under former president Donald Trump.
World Factory
[edit]China has long been known as the "world's factory" thanks to its vast industrial production. There are convincing numbers to explain this Chinese title. According to Nasdaq, China has quickly risen to become the second-largest economy globally, with a gross domestic product (GDP) of $7.3 trillion[9]. This economic growth has been fueled by cheap labor in China. A former Bank of America analyst David Cui published a report on China's industrial production, and Business Insider picked ten most impressive metrics from the mentioned report.
List of ten impressive metrics picked by Business Insider
[edit]Data of 2010, according to David Cui's report:
[10]China's per capita production of air conditioners is 17 times higher than the rest of China's air conditioner production: 109 million units. China's share of the world: 80% China produces 81.1 units of air conditioners per 1,000 people per year, compared with an average of 4.8 units for the rest of the world.
[10]China's computer output is 40 times larger than the rest of the world. China's computer output: 320.4 million units China to the global ratio: 90.6% China produces an average of 238.3 PCs per 1,000 people per year, compared with 5.9 PCs per 1,000 people per year for the rest of the world.
[10]China's output of fuel-saving lamps per capita is 16 times higher than the rest of the world. China's output of energy-saving lamps: 4.3 billion units China's share of the world: 80% China's production of this product is 3.2 pcs/person/year, compared with 0.2 pcs/person/year for the rest of the world.
[10]China's per capita pork production is six times larger than the rest of the world. China's pork production: 51.5 million tons China to the global ratio: 49.8% On average, China produces 38.3 kg of pork per person each year, compared with 6.7 kg per person for the rest of the world.
[10]China's per capita solar capacity is 11 times larger than the rest of the world. China's solar cell production capacity: 21.8 gigawatts. China's share of the world: 74% China's solar power generation capacity averages 16.1 KW/person, compared with 1.4 KW/person for the rest of the world.
[10]China's per capita shoe production is seven times larger than the rest of the world. China's shoe production: 12.6 billion pairs China to the global ratio: 63% China produces an average of 9.4 pairs of shoes per person per year, compared with an average of 1.3 pairs per person per year for the rest of the world. Here are the figures for 2010.
[10]China's per capita mobile phone output is ten times larger than the world's China's mobile phone output: 1.1 billion units China to the global ratio: 70.6% On average, China produces 840.7 mobile phones per 1,000 people per year, compared with 83.6 phones per 1,000 people in the rest of the world.
[10]China's per capita cement production is six times larger than the rest of the world. China's cement production: 1.8 billion tons China's share of the world: 60% China's per capita cement production is 1,390 kg, compared with 221 kg per capita for the rest of the world.
[10]China's per capita coal mining output is four times larger than the rest of the world. China's coal production: 1.8 billion tons of oil equivalent China to the global ratio: 48.2% China's average oil-to-coal production is 1.3 tons/person, compared with an average of 0.3 tons/person for the rest of the world.
[10]China's per capita shipping capacity is three times larger than the rest of the world. China's shipping capacity: 76.6 million tons China to the global ratio: 45.1% On average, China's shipping capacity per 1,000 people is 57 tons, compared with 16.6 tons per 1,000 people for the rest of the world.
Labor in China
[edit]Labor cost
[edit][11]Many researchs show that wages and bonuses in China are relatively low, and many businesses regularly report missing data to avoid tax and social insurance payments. In 2005, the best data compiled by Judith Banister was that China's average hourly wage was $0.57[11]. This salary is not the lowest in the world compared to Southeast Asia countries, India, Etc. However, the productivity of Chinese workers is significantly higher than in many other lower-wage countries [1]. That is also one reason foreign enterprises prefer to set up their production plants in China, with high productivity and low costs. Additional data, provided by the American Conference Board, shows that China's hourly labor costs are about one-fifth of the U.S costs (18%). Furthermore, it shows that Chinese manufacturers save 17 cents on production dollars in labor costs compared to their competitors in the US[11].
Productivity-adjusted Compensation Rates in China, data in 2005[11],
| Countries | Average Hourly Compensation | Productivity Index (US= 100) | Productivity Adjusted Labor Cost | Adjusted cost as Percented of U.S. |
|---|---|---|---|---|
| United States | $23.17 | 100 | $23.17 | 100% |
| China | $0.57 | 13.7 | $4.16 | 18% |
Working conditions
[edit]China is one of the most populous countries globally, so the labor force here is relatively abundant, and there is no shortage of workforce. Moreover, China is one of the countries with the cheapest labor in the world, so it helps businesses save many production costs, helping to lower production costs significantly. The factory labor force in China mostly comes from rural areas that want to have stable jobs to improve their lives[2]. [12]In order to keep costs low, business owners have offered a cheap salary to their workers, and at the same time, working conditions are poor, not to mention benefits for workers such as health insurance and compensation in retirement. Of course, China's hundreds of millions of impoverished workers want higher wages, social insurance, and better working conditions. However, in the countryside, their life even more challenging, so they are inferior and have to accept low wages, stressful working conditions, and almost no insurance in China's "market economy." China needs other ways to improve their workers' life reliably and effectively, or they will face increasingly violent and frequent labor uprisings. Nevertheless, of course, businesses are in no hurry to raise wages for workers because they want to stay competitive in term of price tags, and the Chinese government is in no hurry to intervene to increase workers' rights because cheap labor is good significant advantages of China in the world market[12].
Working condition of Minorities (Xinjiang Workers)
[edit]Xinjiang is an autonomous region located in the far west of China, where most Muslim Uighur communities are living. [13]Chinese authorities are accused of detaining Uighurs in concentration camps, tortured, sexually abused, and forced into labor[14]. In 2009, the Uighurs in China had grown tired of decades of discrimination and discrimination over land. More than 1 million Uighurs disappeared in concentration camps, and many were tortured and enslaved. Furthermore, the Chinese government has used AI-powered sensors lurking everywhere to control the Uighurs. Uighurs are forbidden to maintain their religion, so some Uighurs have buried cell phones containing Islamic documents or even stuffed their data cards in dumplings to hide. Over the years, the United States and many other countries have condemned Beijing's human rights abuses against Uighurs, including forced labor. According to reports, the Uighurs and some other minorities are forced to work in cotton fields and textile factories in the region under poor working condition[13]. The culmination was in early 2021, Western countries, including the United States, British, Canada, and the European Union, jointly imposed sanctions on Chinese officials, accusing them of being involved in human rights for Uighur workers in Xinjiang[14].
Production materials
[edit]China's role in providing goods
[edit]Although the labor cost in China is still more expensive than in other countries such as Southeast Asian countries, India, almost no one can compete with China in terms of material production costs. The production of goods in other countries is mostly passive because it has to wait to import raw materials from abroad, especially products from China. That is why China prevails when it can take the initiative in all sources of raw materials due to its large population and high labor productivity. Therefore, a series of foreign firms, from small to large, have chosen China to be their primary supplier. Thus, China automatically has become "the world's factory," and raw materials have been exported all over the world from China. So, many countries have relied on China in terms of raw materials.[15]For example, in 2021, when the world is still suffering the economic consequences of the Covid-19 pandemic in the US, ISM has published a long list of items with price increases and supply shortages from China. Notable commodities include aluminum, copper, lumber, and steel Etc., whose price increases have been escalating for nearly a year since the pandemic began to spread [ Site]. [16]Besides, The Financial Times reports that prices of polyethylene and polypropylene, the most commonly used plastics, have increased by 25% since December to 1,500 euros per tonne, the highest levels since 2015.
Safety of products
[edit]According to Alexandra Harney, in August 2007, Mattel recalled millions of toys made in China over concerns about their safety. They said some of these products were painted with controllable lead levels. In addition, many other things carry dangerous microscopic magnets, and it has raised global concerns about the quality of Chinese-made goods[1]. [17]Furthermore, in June 2007, U.S. consumers were advised to discard all toothpaste made in China after federal health officials discovered the products contained diethylene glycol. The FDA has determined that a brand called Shir Fresh Mint Fluoride Paste and several other toothpaste brands contain dangerous amounts of harmful chemicals. In addition, in 2014, Purina and Waggin Train LLC agreed to pay $6.5 million to pet owners in the US who believed that Chinese-made snacks were to blame for cause illness and death of their animals[17].
King of Counterfeiters
[edit]History and consumer culture
[edit]The counterfeit industry in China is seen as a symptom of economic growth. In 1978, Deng Xiaoping began to reform the Chinese economy[4]. At that time, foreign investments were encouraged. Many companies want to move there because of the cheap labor and potential of a developing country. In addition, China's industrial solid strength has helped China quickly become the world's factory[4]. Since then, global luxury brands such as Chanel and Louis Vuitton entered to have China market cake[18]. Furthermore, after the Chinese people's living standards improved significantly, their consumer culture was promoted. A materialistic lifestyle gradually controlled Chinese society under Deng Xiaoping[18]. Karl Gerth- a historical professor at the University of California San Diego and author of the book "As China Goes, So Goes the World," described China's shopping culture in great detail. He gave much evidence that the Chinese people tended to judge each other by appearance, from watches, clothes, vehicles, Etc. From that consumption habit, it leads to the fact that many consumers also prefer fake goods to real ones due to increasingly materialistic lifestyles[18]. Therefore, the industry of imitation goods has slowly developed. Besides, with the power of industrialization, Chinese factories can create branded products at a much lower price than the market price[18]. In short, the counterfeiting industry in China is like a symptom of industrialization that we can only see in China.
Impact of China Counterfeiters
[edit]According to Karl Gerth, in 2001, it was estimated that the country had been flooded with between $19 and $24 billion in counterfeit goods[18]. Brand owners in China have assumed that 15 to 20% of all goods labeled with famous brands are faked[18]. These items could be mass copied via computer software, and they had a piracy rate of over 90%[18]. The difference in terms of price between real and fake goods has caused significant damage to famous brands.
According to Forbes, counterfeiting was the most significant criminal enterprise in the world in 2018[3]. Total sales of counterfeit and pirated goods are $1.7 trillion per year, more than drugs and human trafficking[3]. It is expected that it will grow to $2.8 trillion and cost 5.4 million jobs by 2022[3]. As The Counterfeit Report stated, "China manufactures 80% of the time counterfeit goods in the world, and we are supporting China, whether they intend to weaken and destroy the US economy, we [people in the US] buy about 60% to 80 % of products." Thus, counterfeit goods in China are one of the deepest concerns of international enterprises regarding intellectual property rights, loss of revenue, and the loss of millions of jobs for people worldwide[3].
Intellectual Property Right Violations
[edit]The United States has repeatedly stated that China has many severe intellectual property rights infringement, especially for the copyrights of American companies. The US government believes that US companies has been lost about $225 billion and $600 billion annually billions of dollars each year due to the theft of Chinese trade secrets[19]. Former President Donald Trump announced new tariffs in March 2017, hitting back at China, calling it an "unfair and harmful acquisition of US technology[19]." Although, at that time, it has come close to a trade deal with China, one of the highlights of the US side is China's disregard for intellectual property (IP) protections, and claims of lawsuits steal technology and trade secrets that Chinese companies have carried out over the years[19]. In 2019, 1 in 5 corporations said that China stole their intellectual property rights last year, according to the CNBC report[20]. Moreover, China has been involved in many intellectual property scandals, especially in the race of green technology. For example, A wind turbine company in China bribed a frustrated employee to steal AMSC's intellectual property and copy their technology[21]. As a result, China no longer had demand buying from AMSC again, leading to AMSC bankruptcy due to the sudden cancellation of orders from China[21]. That is also one of the main reasons why the anxiety of foreigners, mainly Americans, has increased in recent years. The US and China are both interested in green technology, and both want to take the lead in creating new green technology[21]. However, the possibility of intellectual property infringement from China has brought considerable caution to the rest of the world. Therefore, China should have stricter control on intellectual property rights because it reduces tensions between China and the US and benefits China's domestic enterprises.
China Gross Dosmestic Product (GDP)
[edit]China Economy Developing
[edit]
Consequences of China Price
[edit]On Individual
[edit]About counterfeit goods in China, domestic consumers are the customers who directly consume China Price products. From small things like cigarettes, alcohol, clothes, medicine, Etc. to necessary, more valuable things like Jeep Cherokee [11], all there can be forged at a meager price. These products are primarily toxic and dangerous; for example, the Jeep Cherokee broke down after only a few thousand kilometers is a prime example of this point of view [11]. Moreover, inferior quality Chinese goods have manifestations such as diversity in design, flexibility in price, and especially dangerous, rich in types. The danger is shown in that, besides causing economic damage to consumers, it also seriously affects consumers' health. Typically, food, drinks, medicines, and toothpaste are of poor quality, causing illness to customers[1].
[1]The impact of China Price on international entrepreneurs is enormous. Most reputable, branded, and popular brands are at risk of being counterfeited or counterfeited goods. From an economic point of view, fake and imitation goods significantly affect the profits of actual production and business enterprises. The first negative impact is that the above behavior discredits businesses with counterfeit products, misleading consumers and turning away from the product. On the other hand, because there is a price advantage compared to "genuine" goods, counterfeit goods and imitation goods cause genuine products with clear origins to fall into a state of stagnation and decline in sales[1].
Chinese workers are also the sufferers of China Price. Many workers have been bullied into suppressing their income in factories to make cheaper products[1]. Workers and consumers around the world also have to bear the brunt of the consequences. China's Chinese products are available in almost every country in the world. People can easily find products labeled China everywhere, from clothes, phones, food, children's toys, Etc. There are many products with toxic ingredients for users and are banned from the US and other countries worldwide. For example, farmed seafood from China is concerned that it may be contaminated with drugs and other chemicals [1].
[11]Besides, millions of workers around the world have lost their jobs due to China Price. Partly because Chinese goods are below-market prices, and consumer psychology often tends to choose cheaper goods. In addition, labor wages in China are much cheaper than in capitalist countries such as Europe and the United States. As a result, international business owners can save a lot of money by moving their factories to China. According to reports, they can save about 20% to 100% on production costs [11]. Even though, this scenario has benefited Chinese workers, but it has taken away millions of jobs from workers around the world.
On Climate Change
[edit]The environment and climate have also been suffering the consequences of China Price. To make a wide range of consumer products to supply the entire world, China has used many coal and gas fuels in almost every industry[1]. It brings considerable profits to coal mining business owners and small earners around the coal mining area. Moreover, thousands of people wish to get rich around coal mines, and they see it as a tool to get rich in China. Besides, the coal tycoons used their money and power to silence journalists to cover up the dubious work[1]. Their purpose is to let the fewer people know, the richer they will be because they can comfortably mine more coal[1]. Coal, as well as gas fuels, seriously cause negative effects on the earth's climate. The more people use coal, the more polluted the environment will be, and the climate will also increase the temperature accordingly. Furthermore, when China's environment is polluted due to its manufacturing activities, the climate outside China is also affected. For example, some researchers have found traces of carbon monoxide, ozone, and mercury from Asia in Oregon and Washington State, and pollution from Asia is thought to be affecting climate change up and down the coast west of North America [1]. The reason is that everything on earth has a connection with each other, from climate, environment, socio-economic, Etc. and China is a country with a large territory and population. It follows that almost everything China does can also affect the rest of the world, and the same goes for climate change.
Conclusion
[edit][1]China price is both a nightmare and an opportunity to make some people rich. The quality of Chinese products is lower than products from Europe and America, but it also partially fulfills its functions. Moreover, China-made usually has a low price, thus saving money for domestic and foreign consumers. Domestic and international entrepreneurs also enjoy the benefits of China Price, such as cheap labor and guaranteed supply source. However, many low-priced products are counterfeit and toxic goods. In particular, the US and other countries have banned most such items from importing into the market[1]. Despite this, China is still known as the world's factory when providing a series of necessary goods in production and daily life. Large population, rich labor force, and outstanding labor productivity have helped China produce massively products every day. As a result, the price is lower than the market price. However, this also resulted in millions of workers worldwide losing their jobs. In addition, goods that are too cheap for the most part cannot be guaranteed in terms of quality, negatively affecting the health and pocket of consumers. Finally, to produce such a large quantity of products, China must use a lot of gas energy such as coal. Therefore, It has caused severe environmental pollution and led the earth's temperature to warm up, leading to global climate change[1].
References
[edit]- ^ a b c d e f g h i j k l m n o p q r Harney, Alexandra (2009-01-27). The China Price. p. 7. OCLC 0143114867.
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- ^ "U.S. Relations With China". efr. Retrieved 2020-06-03.
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{{cite journal}}: Cite journal requires|journal=(help) - ^ a b Oliver, John. "China and Uighurs: Last Week Tonight". Youtube. LastWeekTonight. Retrieved 5 June 2021.
- ^ View, Bloomberg. "US Needs China More Than China Needs the US". Retrieved 2021-06-03.
- ^ Bragagni, Maurizio. "RAW MATERIALS PRICE INCREASE". Retrieved 2021-06-03.
- ^ a b STEWART, Emily. "China Has a History of Selling Dangerous Products to U.S. Consumers". Retrieved 2021-06-03.
- ^ a b c d e f g Gerth, Karl (2010-11-09). As China Goes, So Goes the World. p. 272. ISBN 9781429962469. Retrieved 2021-05-30.
- ^ a b c Goldstein, Paul. "Intellectual Property and China: Is China Stealing American IP?". Retrieved 2021-06-03.
- ^ Rosenbaum, Eric. "CNBC GLOBAL CFO COUNCIL 1 in 5 corporations say China has stolen their IP within the last year: CNBC CFO survey". Retrieved 2021-06-03.
- ^ a b c Raymond, Nate. "China's Sinovel convicted in U.S. of trade-secret theft". Retrieved 2021-06-03.