China Inc. – The 800-pound dragon in the room

2 minutes estimated reading time

The New York Times has a great review of China Inc. by Ted C. Fishman which highlights the growing economic might of China. Some interesting facts and figures featured in the review of the book include:

  • From 1982 through 2002, the United States economy grew at an annual rate of 3.3 percent. China’s economy grew at an annual rate of 9.5 percent,
  • In 2003 China bought 7 percent of the world’s oil, a quarter of its aluminum and steel, almost a third of its iron ore and coal, and 40 percent of its cement.
  • China makes 40 percent of all furniture sold in the United States
  • China has 3,000 Christmas-decoration factories which exported more than $900 million tree trimmings and plastic Santas in the first 10 months of 2003.
  • China still only makes one-twentieth of everything produced in the world
  • China can rely on a vast low-wage army, working for an average of 40 cents an hour, that can turn out consumer goods of every description
  • American and Japanese companies spend $1 billion to $2 billion to develop a new car
  • New super-cities like Shenzhen, a fishing town of 70,000 20 years ago that now has 7 million people, making it larger than Los Angeles or Paris, swelled by migrants from the countryside looking for a better life in the city
  • Up to 300 million Chinese have migrated from the country to the city over the past 20 years
  • The Asian Brown Cloud, a wind-borne industrial smog that originates on China’s east coast, can be seen in California as it rides the jet stream
  • China has seven of the world’s ten most polluted cities

The book also provides some insights into the differences between the rise of China and Japan. Unlike Japan, China Inc. is driven by local enterprises rather than the central analysis and planning carried out by Japanese Ministry of International Trade and Industry (MITI) [now known as the Ministry of Economy Trade and Industry] to find key markets to conquer. There is a certain irony in the socialist state using the brutal darwinism of the marketplace in a way that Adam Smith would have appreciated.

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