China – where our things come from
Donald Trump rages in the US Rust Belt: We’re bringing your jobs back. He draws parallels between the dramatic job losses in the former steel and iron strongholds of the USA and China’s entry into the WTO. He is not entirely wrong. In fact, economists are now also focusing on the negative effects of globalization. This is because there have been major job relocations in the “traditional” industrialized countries, particularly in the manufacturing sector. The losers are slowly rising up – protectionist tones can be heard from all right-wing populist parties in Europe and even the Democrats in the USA are now making comments that run counter to the fundamental liberal stance on global economic issues. Resistance to TTIP is therefore also stirring in the USA. Although this is not directed against China, it is along the same lines.
Our shoes – bet they come from China?
An article in the FAZ confirms that 90% of our shoes now come from China. Funnily enough, not the soles, as these are often made in Italy, where a resourceful entrepreneur produces – but has set up research in China. Actually, it’s usually the other way around. The fact is that companies want to produce mass consumer goods where it is cheapest. This is not surprising in economic terms. No matter how much politicians rail against it, it remains a fact. Politicians have never been able to successfully buck economic trends in the long term. Protectionist measures have usually had the opposite effect.
China produces – the West consumes
Since the opening up of the economy, the Chinese Communist Party has systematically pursued the upswing and thus laid the foundations for the Chinese economic miracle. Favorable production conditions, a good workforce and low costs with a gigantic domestic market have developed their own appeal. Production costs remained low and ensured that we in Europe could buy cheap products. And this is where the cat bites its own tail. It would be nice if color TVs were produced in the USA again and thus create jobs. But would consumers be willing to pay many times the current purchase price just so Jim and Mary could have a job in the US Midwest? WalMart once campaigned with the slogan “We buy Amrican so you can”. That has long been history and the volume of trade between China and WalMart alone already exceeds the gross domestic product of an entire nation, mind you, not that of smaller nations.
Interdependence is a reality
There have always been pithy remarks from politicians. In fact, an obstacle to trade between China and Western nations would lead to major upheavals, because – all major companies have invested in China! Corporate profits would therefore shrink and trade would fall. It is an illusion to believe that factory jobs in the USA and Western Europe would then immediately return. At the same time, China would take measures to compensate for the trade barriers. It should not be forgotten that China is also one of the biggest financiers of the US trade deficit. Above all, however, it would severely disrupt consumption, which is beloved by everyone and often seen by politicians as the factor that makes people happy. What environmental activists might welcome would certainly not go down so well with the millions of consumers. The calculation “everything cheap, but from home” does not work.
Understanding China – increasing earnings
Since China is an indispensable big player in the global economy, it is pointless to speculate on whether one should concentrate on the domestic market in the future. However, the more important China becomes, the more important it is to operate with the right strategy and the right preparation in the world’s most populous country. Global Cultures prepares you specifically for this through integrated intercultural training and coaching China . Our seminars are tailored precisely to your needs – because it’s like shoes. The right fit is crucial!
