¡Méndigos Chinos!
The reasons for the profusion of Chinese consumer goods being purchased by the public in so many countries, including Mexico and the U.S., are the same reasons Wal-Mart is the leading retailer of the world: Generally good (not outstanding, but adequate) quality, reasonably low prices, and a policy of plowing back much of the profit into expanded inventory, advertising and outlets.
The Chinese are major consumer goods exporters in large part because of a very large, low-paid, generally well-educated work force, traditional acceptance of the concept that profits in business are a worthwhile goal and should be encouraged, and an equally traditional work ethic in the population as a whole. They are also supported by the present international mobility of capital, which operates with little regard for nationality. When a company finds it can increase profits and reduce overhead by having its products made in less-developed Country X, (assuming a welcoming Government regime), for sale there and elsewhere, it can usually move manufacturing to that location without substantial risk. Most developed countries today do not significantly penalize national companies for outsourcing or even large-scale manufacturing in another country.
Before World War II there were innumerable examples of the de-nationalizing of manufactures, usually resisted for a time by the original country of origin. One remembers early Chinese and Japanese attempts to prevent foreigners’ thefts of silkworms, 16th and 17th century Spanish efforts to stop manufacture of chocolate products abroad, and Dutch edicts to prevent the exports of tulip bulbs. In the 17th and 18th centuries British manufacturers tried to stop importation of products made in the colonies at much lower prices (a major reason for the revolt of the Americans). Since 1945 the process has accelerated, and
The usual method used by importing countries to try to limit or eliminate this is imposition of import tariffs, today usually within international trade agreements rather than unilaterally. Because of public affection for low-priced goods in the receiving countries, as well as Governmental aversion to policies which encourage inflation, and the ability of the exporting countries to use the international trade process to punish importers’ draconian duties, it has had limited success.
However, in every case the process has had its own natural limits built in. As the economic conditions of countries to which the manufacturing has moved gradually become more and more similar to those of the country of origin, demands by labor for improved pay and conditions, by Government for increased revenues from their companies, and by consumers for improved quality all contribute to higher production costs and thus higher prices.
Since, for most consumers, it is the product price above all which attracts them, inevitably they turn to less expensive products from whatever source. After
As we learned from such former concerns as that Japan, for instance, was on the way to total economic dominance (before their severe financial problems began in the 1990’s), these economic phenomena have a habit of changing, often in very unexpected ways, and sometimes almost overnight.
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