China’s Industrial War On The World: Dad’s Anecdote
After coming home from picking up 3 pairs of socks and a bowtie, I complained to my dad that everything I bought was made in China. I started lamenting how we don’t make anything in the United States, and my dad, as per usual, decided to tell me a story.
My dad works for one of the largest polyethylene producers in the world. His company makes a lot of plastic you use everyday. Back when CDs became the storage choice de jour of companies around the world to replace floppy disks and in the music industry cassette tapes, American companies were generally buying their cases from Taiwan or making themselves. China went to Taiwan, replicated their case making machinery, and sold them to the United States. This put the Taiwanese companies out of business. At the same time from my father’s company, China bought the rights of the formula to the casing plastic.
As American companies were installing their new machinery, they went bankrupt because China began selling the CD cases for a far lower cost than the American companies could. Many of the smaller companies went out of business and the larger companies got out of the business. These companies couldn’t find buyers for their scarcely used or brand new machinery so Chinese companies bought them back pennies on the dollar.
Some of my dad’s friends went to China to help install the machinery back into Chinese factories. Thankfully at the same time, USB drives and memory sticks came into widely adopted use by the tech industry. So shortly after installation, those Chinese stolen, sold, and repurchased machinery remained unused.
The whole story illustrates to me the power of China’s resources by exploiting billions of people and the necessity of the developed world to constantly innovate because we will never be able to match the absurdly low labor costs of the Chinese workers.