Every regulatory regime in China is organized along similar lines: with competing and overlapping bureaucracies, horizontal and vertical fragmentation, arbitrary and inconsistent enforcement, and, ultimately, ineffective oversight.<\/p><\/blockquote>\n\n\n\n
Wherever you fall on this ideological spectrum, America by comparison is arguably centuries ahead of China in terms of its regulatory system. For one thing, there’s a functioning system of laws and enforcement. Of course, our system is not without corruption \u2013 high and low. Critics point out how many regulators, such as the FDA and Nuclear Regulatory Commission, are far too cozy with industry. Others lament the corrosive influence of big money in our political system. However, on the whole, there is a bedrock rule of law in America, a system to redress cases of fraud, abuse, and liability, and a civil society, which has the freedom to speak out against abuses. Not so in China. Parents who have complained about the melamine poisoning of their kids have been put in prison for disrupting social harmony.17 Also, though we are certainly not free from our own lapses in safety in manufacturing and agriculture, the proof of our system’s superiority is in the pudding. We have lapses, but we don’t have thousands of them over the course of a few years \u2013 spanning the breadth of basic manufacturing and agricultural industries, from food and drugs to infrastructure and consumer goods. And, truth be told, often the safety lapses in American products can be traced to Chinese imports.<\/p><\/blockquote>\n\n\n\n
When imported food is restricted, such as with baby formula, Chinese consumers will engage in very creative ways to purchase it. They’ll have their kids attending college overseas send back baby formula via FedEx. Or they’ll even smuggle the goods into China from Hong Kong, Taiwan, and other Asian nations where western-made baby formula can be purchased. A New York Times article of July 25, 2013 describes how the Chinese are buying baby formula anywhere they can lay their hands on it around the world, causing shortages in at least six countries. The large retailers Boots and Sainsbury’s in the United Kingdom have instituted a new limit on baby formula to two cans per customer. And Hong Kong customs is enforcing the two-can limit as well for anyone trying to spirit baby formula through Hong Kong into China. A recent sting by Hong Kong customs officials targeted three baby formula smuggling syndicates, with the arrest of ten people and the confiscation of nearly 220 pounds of contraband.19 Chinese don’t even trust the imported milk powder being sold on Chinese retail shelves. Since the melamine scandal of 2008, there have been media reports of imported formula being mixed with Chinese-made formula. So consumers insist on buying formula outside China.<\/p><\/blockquote>\n\n\n\n
China supports millions of jobs in our economy through trade and investment. As China struggles to make things safely and reliably, it must import them.<\/p><\/blockquote>\n\n\n\n
If you really want to minimize your exposure to unsafe Chinese imported foodstuffs, stop buying processed foods. Anything in a box, jar, bag, bottle, or can is suspect. Even if it’s labeled organic. Because China still does not grant the United States permission to inspect its farms. So any additives coming from China that go into an organic product need only be stamped \u201corganic\u201d by two independent Chinese authorities. Unfortunately, document forgery is practically its own industry in China. You can actually buy fake receipts on the street to provide your boss for expense reimbursement. And these shenanigans go on in the inspection industry all the time. China’s law that pork imports must be free of a hormone called ractopamine has spurned a whole cottage industry in which fake ractopamine-free certificates are mocked up after the ractopamine-full pork is imported.<\/p><\/blockquote>\n\n\n\n
The only way you can be sure that your food is not coming from China is to buy fresh fruit, vegetables, meat, poultry, and fish from local sources, like farmers’ markets.<\/p><\/blockquote>\n\n\n\n
If you want to avoid unsafe Chinese imports, avoid dietary and herbal supplements. Get your vitamins from fruit and vegetables. And if you must take supplements, you’ve got to do diligent research on the efficacy of the companies in question and their quality control methods.<\/p><\/blockquote>\n\n\n\n
Politicians bash China because it’s politically expedient. The pollsters tell them it wins votes. It plays on our fears and anger. And it distracts our attention away from the real issues in domestic policy that need to be addressed.<\/p><\/blockquote>\n\n\n\n
\u201cUS students, who once led the world,\u201d according to Newsweek, \u201ccurrently rank 21st in the world in science and 25th in math.\u201d This kind of talk gets louder around the time when the results are posted from the big global evaluations on education, such as the Programme for International Student Assessment (PISA) and the Third International Mathematics and Science Study (TIMSS). But let’s consider a few facts. Tom Loveless, a senior fellow at the Brown Center on Education Policy at the Brookings Institution, who is an expert on PISA and TIMSS, reminds us that we need to put these test results in perspective. First, China is a very large, poor, rural country that cannot possibly administer this kind of assessment nationwide, so only discrete parts of China participate. Shanghai participates. Beijing participates. Yes, Shanghai scored first place on the PISA, but that tells us nothing about how China as a whole would do. That’s like having Manhattan compete on the PISA and claim the results represent America as a whole. Loveless writes that \u201cShanghai’s municipal website reports that 83.8% of high school graduates enter college. The national figure is 24%. The American figure is about 66%.\u201d Second, the notion that America is in free fall from a perch as number one in the world for math and science is also a myth.<\/p><\/blockquote>\n\n\n\n
To build the next Google or GE or invent a cure for cancer, you need good math and science fundamentals, but you also need much more. The ability to think creatively, the ability to buck authority \u2013 not kowtow to it \u2013 and the ability to inspire others in helping to implement your vision. These are traits vital to an innovation economy that are not reflected on the PISA test but, arguably, are more important than whether kids ace their math and science scores.<\/p><\/blockquote>\n\n\n\n
China is one of the toughest places to do business in the world. It’s highly complex. And fraught with risk. Attempts to mitigate that risk are usually met with stiff resistance. Authorities prevent you from proper inspections. Business owners bar their doors. But remember: in any commercial interaction, the buyer holds tremendous leverage. With costs coming closer and closer to parity between China and the United States \u2013 plus the added risk of unsafe business practice that comes with China sourcing \u2013 the case for making something in America is strong. So companies have a choice. Be prepared to push hard in insisting that you forward-deploy your resources up the entire length of China’s supply chain. You need to inspect your contractors, your subcontractors, and your sub-sub-subs. To truly mitigate risks, you actually need to rationalize your own supply chain, eradicating middlemen that add risk but little value. Like Mattel, even if you own factories in China but still employ outside vendors, you’re at risk.<\/p><\/blockquote>\n\n\n\n
If you want to start a business or grow your current one, just look at the trends where China is expanding. You don’t need to source products in China to do business there. Sell them something. To be sure, some Chinese industries are closed or highly restricted to foreign investment and exports. Don’t plan on opening up your own bank or oil field anytime soon. But most industries are open for business. All that is required is your persistence and creativity.<\/p><\/blockquote>\n\n\n\n
American consumers actually do demand that their food is safe and that, when they buy food, they’re not going to be putting poison on the dinner table. The FDA must do a much better job to protect American families, and so must the top leaders of our federal government and Congress. We have no business sourcing anything in such a dangerous market as China if we can’t do a much, much better job of making sure that what we import is safe.<\/p><\/blockquote>\n\n\n\n
In many ways, our economic competition in the coming century is not with China at all, as the conventional wisdom holds, but with Europe. China’s lower-value, assembly-driven operations largely complement American advanced manufacturing. Europe’s exports of food, high tech, and services are much more directly in competition with America than with China.<\/p><\/blockquote>\n\n\n\n
It’s misleading statistics that are the basis for so much political and journalistic rhetoric \u2212 how the moderator in a presidential debate can say that Apple products are manufactured in China, when they’re only put together there; how broadcast news reports can claim that millions of jobs are being lost to China because of a greatly exaggerated and misleading trade imbalance; how institutions like the IMF can claim China will overtake the United States economically in just a few years. These claims are all based on bad data.<\/p><\/blockquote>\n\n\n\n
We tend to remember as far back as the last media cycle as we lurch from tweet to tweet. It’s worth remembering that a deep undercurrent of fear and self-doubt runs through the American psyche. We saw this in the 1980s when Japan’s economy was expanding. Americans believed Japan would rule the world economically. And many serious academics agreed. Before that, in the 1970s, America feared rising Middle East Gulf States like Saudi Arabia, which were investing their oil riches in US assets. And, before that, there was the fear of a rising Soviet empire, encapsulated in the Sputnik moment.<\/p><\/blockquote>\n\n\n\n
It’s easy to assume that because Japan moved up from low value to advanced manufacturing, China can too. But Japan and China are radically different. Japan in the 1960s was a society ruled by law, with a business culture that painstakingly mastered technology and organizational excellence from the bottom up.<\/p><\/blockquote>\n\n\n\n
China, on the other hand, flailing in a system with no rule of law and still healing from the national trauma of Mao’s mass murder, aims to get rich quick by trying to leapfrog development through any means necessary \u2013 counterfeiting, making products for western brands, reverse-engineering. But the fact remains that to build something reliably, you need transparent, well-run companies with trained workers in a context of enforceable laws and effective regulators. Merely having the spec for a stealth bomber or bullet train doesn’t mean you can build and operate it safely.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"
These highlights are from the Kindle version of Unmade in […]<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":15162,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"yoast_head":"\n
Unmade in China Highlights<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n\t \n