Cambridge Business Association
The China Price
Book

The China Price

The True Cost of Chinese Competitive Advantage

Alexandra Harney
Penguin, 2008
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8

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Recommendation

Shoppers know that the ubiquitous “Made in China” labels on everything from basic food and clothing to high-end electronics usually mean low prices. But most consumers don’t realize the full extent of the repercussions that the “China price” extracts from the Chinese and the rest of world. Journalist Alexandra Harney undertakes an in-depth investigation into what Chinese workers must endure to save the average American family $500 a year: low wages, crushingly long work days and brutal – sometimes deadly – working conditions. But she also reveals the hidden costs the world pays for the China price, including climate change, air pollution, unemployment and unsafe products. Harney gained unprecedented access to secret factories, workers’ homes and government offices to hear the personal, often chilling stories of what China’s economic boom has meant for millions of people. Although Harney’s argument ignores some mitigating factors, such as China’s right to industrialize and the good that growth in China has achieved, getAbstract strongly recommends reading this book before your next shopping trip: Reflect on what that “$3 T-shirt or $30 DVD” player really costs the world.

Summary

At What Cost?

China now is the world’s third-largest manufacturer of all types of products, from low-end consumer goods to high-end electronic equipment, and it is poised to usurp the United States for the top spot by 2020. What China makes, it sells abroad: Its exports rocketed from $26 billion in 1984 to $1,218 billion in 2007. Walmart “buys at least $18 billion worth of goods from China every year.” Samsung, IBM, General Motors and numerous other multinationals buy extensively from China. The tremendous low cost of Chinese-produced merchandise – “the China price” – has catapulted the country to new economic heights.

The China price derives largely from the country’s huge, low-cost working population. Some 104 million laborers work in China’s manufacturing and assembling industries – the equivalent of all the manufacturing employees in the US, the UK, Canada, Japan, France, Germany and Italy combined, times two. Most of China’s laborers are migrants from the poor rural interior, who relocate to manufacturing centers for work, often living in crowded, squalid dormitories. Their average pay – $0.57 per hour in 2002 – is lower than the average wage that an Industrial...

About the Author

Alexandra Harney is a journalist who has covered Asia for The Financial Times.

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