The Change Mariner: The Chinese Century

July 08, 2004

The Chinese Century

Interesting tidbits from cover story of The New York Times Magazine cover story, The Chinese Century:

Because 12 percent of China's exports to the U.S. end up on Wal-Mart's shelves, and because Wal-Mart's trade with China accounts for 1 percent of that country's gross domestic product, the company exerts tremendous downward pressure on prices.

Since 1978, [China's] gross domestic product has risen fourfold; in straight dollar terms, China's economy is the world's sixth-largest, with a G.D.P. of around $1.4 trillion. It has gone from being virtually absent in international trade to the world's third-most-active trading nation, behind the U.S. and Germany and ahead of Japan.

China is home to close to 1.5 billion people, probably, which would make the official census count of 1.3 billion too low by an amount equal to roughly the population of Germany, France and the United Kingdom combined. China has 100 cities of more than a million people.

China has 17 million university and advanced vocational students (up more than threefold in five years), the majority of whom are in science and engineering. China will produce 325,000 engineers this year. That's five times as many as in the U.S., where the number of engineering graduates has been declining since the early 1980's.

In American business this is called the ''China price.'' It is the price American suppliers to other American businesses have to match to keep their customers. It is the price at which Chinese manufacturers can deliver the same goods and services. Last November, the Chicago Federal Reserve Bank noted the complaints that ''automakers have reportedly been asking suppliers for the 'China price' on their purchases.'' It also observed that U.S. suppliers had been asked by their big customers to relocate production to China, or to find subcontractors there.

The fact that in China machines can be replaced by people for huge cost savings and without sacrifice in quality changes the competitive landscape of the global marketplace.

Understanding China : A Guide to China's Economy, History, and Political Culture
Hill and Wang

Amazon Price: $10.20

Wild Swans : Three Daughters of China
Touchstone

Amazon Price: $10.88

ITMB China Map
ITMB Publishing

Amazon Price: $62.97

Chinese Business Etiquette: A Guide to Protocol, Manners, and Culture in the People's Republic of China (A Revised and Updated Edition of "Dealing with the Chinese")
Warner Books

Amazon Price: $10.19

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