[lbo-talk] The Chinese assembly line: where's the other $19.65?

[Sean Johnson Andrews]

> The following article from today's New York Times is a good illustration 
> of
> how the record $200 billion US trade deficit with China is not a 
> reflection
> of the decline of US industrial capitalism - a fiction shared by demagogic
> US politicians and parts of the left - but of its resurgence since the
> opening of the Chinese labour market in the past quarter century. 
> Especially
> in the past decade, American and other OECD corporations have used China 
> as
> a low-wage assembly line for the export of computers, textiles, toys,and
> other manufactured goods to world markets. According to the report, the
> multinationals control 60% of the country's exports, and virtually all of
> the profits from that trade; only an estimated 35 cents of every $20 
> Barbie
> doll sent abroad stays in China.

 But isn't it also true that little of this profit is really beneficial to 
"America" since little of it is reinvested in US infrastructure, most of it 
is kept abroad, even if it doesn't stay in China?  So it would indicate the 
decline of industrial capitalism in so far as it is a) in the US or b) 
economically beneficial to the US, except that we can possibly offer the 
CEOs of these corporations services (like serving them food, judging from 
job growth sectors) or investment instruments.  So I guess my question is, 
in what way does the pilfering of profits from exploited Chinese workers do 
anything to increase the strength of US industrial capitalism?  Giving 
workers cheap goods only counts as Fordism if they are actually working and 
getting paid.  Perhaps the numbers are there, but you seem to be arguing 
inductively.  The other evidence (if only in the number of jobs lost and 
factories closing) seems to be that none of this money ever really comes 
back to any state, except for the british virgin isles or one of those other 
caribbean tax havens.  Maybe they've done some more home or office 
construction, but helping to pump up the real estate market is hardly a gift 
at this point, even if there are jobs in building.

As for China's lack of brands, mentioned near the end as being blamed for 
it's weak profit margin, this is definitely true in the regular economy, but 
I wonder how many US brands are actually Chinese on their domestic market? 
Last year about this time, if I remember, the US govt. basically got China 
to agree to an informal extension of the multi-fibre agreement quotas by 
threatening to go after them more aggressively on IPR; in other words, they 
got tacit permission to keep operating the black market if they would allow 
the "legit" markets more restricted access to their cheap labor.  That's my 
take on it, though, so if I am off base, set me straight. Either way, it 
seems that it is true that this is beneficial for the US way of life in the 
short run.  Though all it will take is a bit of labor activism in China, a 
downturn and a little demand management (by Chinese gov't and MNCs) in that 
country and sooner or later, they'll be the consumers driving the world 
economy and we'll be hunting and gathering or working on plantations.  That 
is, unless the military gets involved.  That always changes the scenario. 
(Though the "State Department sees exodus of weapons experts" story seems 
like a bad sign on that front as well)

Either way, thanks for the article.  very interesting stuff.