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'Made in China' labels don't tell whole story
By David Barboza (The New York Times)
Updated: 2006-02-09 11:50 "I don't think the developed world shifted that much work to Asia," said
Vincent Chan of Credit Suisse. "The places that have seen the most manufacturing
disappear are Hong Kong and Taiwan."
To be sure, American and European
companies are moving more of their manufacturing to China. Dell and IBM
computers used to be primarily made in the United States. Now, most of their PCs
are assembled in China.
Bigger multinationals could be on the way.
Airbus is now considering building passenger jets in China. And General Motors
is considering exporting some of the cars it makes in China.
Thousands
of Chinese factories have created millions of jobs for the country's low-wage
migrant laborers, who earn about 75 cents an hour. But so far, Chinese companies
in these industries have not been able to climb from basic manufacturing into
design work and beyond. China's rise is in striking contrast to that of Japan in
the 1980s, when Japan was producing brands like Toyota, Honda, Mitsubishi and
Sony. China, by contrast, has few if any global brands beyond Lenovo and Haier,
which are still struggling to build name recognition.
"The biggest
beneficiary of all this is the United States," said Tao, the UBS economist.
"Look, a Barbie doll costs $20 but China only gets about 35 cents of
that."
Chinese officials rarely miss an opportunity to argue that the
trade statistics showing huge surpluses for China are misleading indicators of
the country's prosperity.
"What China got in the past few years is only
some pretty figures," said Mei Xinyu of the Ministry of Commerce Research
Institute. "American and foreign companies have gotten the real
profit."
Still, China's economy is booming, and an aggressive class of
entrepreneurs is emerging at home that resembles the overseas Chinese who built
business empires in exile during the 20th century. These are people like Yin
Mingshan, a 68-year-old multimillionaire in the central city of Chongqing, who
is fashioning himself as a Chinese Henry Ford.
"We are the biggest
exporter of motorcycles in China," Yin said.
Yin started out selling
books in the 1980s, then engines and motorcycles in the 1990s. Today, his
company, Lifan Group, has just opened a huge factory. Yin says his next goal is
to export cars to the United States.
Don Brasher, who operates Global
Trade Information Services, said this about the Chinese transformation: "That's
how the Japanese got started. Remember, in the 1950s, the Japanese started
exporting motorcycles. And 20 years later, it was
cars."
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