The China Price, Alexandra Harney, Penguin, $15Till Chinese manufacturing gets its Upton Sinclair, this book will do wonderfully as an eye-openerSome american capitalists and their politician friends called Upton Sinclair, whose journalistic investigation of conditions in Chicago meatpacking plants in the turn of the 20th century deserves to be read even now and forever, a muckraker. Doubtless, some Chinese capitalists and their communist party friends are equally unprepared to say anything flattering about books like The China Price and authors like Alexandra Harney. But Harney, whose journalism is excellent — of course, you get only one Sinclair every century or so — is a foreign muckraker. On reading her and agreeing with her premise, that Chinese manufacturing in many ways is a scare story wrapped in success, you wonder when China can produce its own muckrakers, for they are the necessary condition for reform. This book, therefore, is another occasion to ask the great question of our time: whither Chinese capitalism minus Chinese political change?Harney’s reportage, a fine combination of life stories and economic facts, is probably the most readily accessible source for the following truths about China’s manufacturing revolution. One, low price is China’s trump card. Two, to maintain that low price, China’s factory owners are prepared to sacrifice both quality and minimally acceptable working conditions. Three, terrible working conditions can’t always deter China’s rural migrants whose industrial employment in places like Guangdong makes them more money than they can earn in villages. Four, when you see a nice Chinese factory, assume that it is a front for gullible visitors and a cover for dreadful sweatshops.But, of course, China is not unique as far as factory horrors are concerned. All countries that have transformed themselves into industrial societies have similar dark chapters. Think England, the Industrial Revolution and pre-teen chimneysweepers and factory hands. Think the America Sinclair was investigating. Think the current India and its carpet factories and its construction workers who do not even have basic safety equipment like hard hats and harnesses. The scale of China’s manufacturing is so gargantuan and its primacy as the world’s cheap goods provider so astounding that it attracts extra critical attention. India would have too if its manufactured goods dominated retail shelves.But the big and crucial difference is that India, like England and America but unlike China, is not a one-party autocracy. There are, in this country of uneven regulation and almost institutionalised corruption, journalists, NGOs, the courts, the odd politician or the bureaucrat and the weight of public opinion — all potential muckrakers working in a free country, who can shift rules and laws. Remember, to quote an example that’s slightly different but wholly appropriate, when SARS hit China and the world panicked, Beijing was tightlipped but in India the then health minister Sushma Swaraj was grilled by the media for every visitor coming in from “affected” regions.Harney argues that Beijing must enforce rules better. But that is, first, over-optimistic because no central government can enforce countrywide rules, and second, misses the point about Beijing’s political-economic DNA. China’s economic success is built on increasing exports-plus-investment and keeping consumption low; India’s share of mass consumption in GDP is similar to that of western countries, but China’s is much lower. This model goes with factory-floor horrors because both draw power from the political system’s ability to keep a lid on popular disaffection.Crucially, the factory’s economics may be changing a bit for China. Inflation is up and so is the currency — you don’t see so many stories about the undervalued yuan anymore — and those fabled low-export prices are under pressure to rise. Harney, interestingly, wrote in Slate recently, speculating whether cheap Chinese goods will get expensive.If the export model faces more pressure, will China respond by making its factories even worse, so that the price advantage is not lost? You really need homegrown muckrakers for that question to be asked effectively.EXCERPTThe story of China’s emergence as the world’s workshop starts with the story of one of its most enthusiastic customers: the United States of America. In the aftermath of World War II, American officials decided that the country’s foreign policy interests were best served by helping rebuild the global economy. Policymakers were convinced of the economic and security benefits of free trade, and US businesses wanted markets for their products overseas. Washington poured money into reconstruction of industry in Europe and Japan and encouraged imports to rejuvenate foreign economies through “trade, not aid.”Reversing earlier policies that protected American industry by keeping import tariffs high, postwar officials lowered them. President Truman reassured the public that “American labor can now produce so much more than low-priced foreign labor in a given day’s work that our workingmen need no longer fear, as they were justified in fearing the past, the competition of foreign workers.”Over the following years, the American government continued to promote free trade. By the time, China emerged from three decades of relative isolation in 1978, American customers were accustomed to seeing foreign labels on their shoes, clothing and toys. And American manufacturers were in the habit of fighting back.Long before there was a China price, there was a Japan price, a Hong Kong price, a Taiwan price and a Mexico price though they weren’t known as such.
