Made in China, bought in America

Chinese products have flooded the American market and a concerned US tries to hit a balance as the ice thaws between the two countries by Maswood Alam Khan

Until recently, whenever I went out to buy anything at a shopping mall in America, I always would read the label to find out whether the product was made in America. I wanted to buy some American products — a few souvenirs or trinkets — to take home as mementos of my visit, but to no avail. In frustration, I’ve given up my search. I’m the last person to buy and carry a product from USA all the way to Bangladesh which is made in any of my neighboring countries like China or India. I no longer check the labels to find out the country a product is made in; I’ve taken it for granted that a product in America must be “Made in China”.

China is omnipresent in the United States. Whatever you touch, feel, smell or taste are all made in China. It won’t be going overboard on saying that American people are also ‘Made (or Nurtured) in China’ as far as their body composition or blood count is concerned. All baby food, toys and cradles are “Made in China”. All food items, except some green vegetables and fruits that are grown in America, are shipped in from China. All exercise equipment that keep Americans’ mind and body fit and sturdy are manufactured in China. All cosmetics and perfumes that keep American ladies chic and elegant are processed in China. All flowers and showpieces that are placed in the living rooms in American homes to keep Americans’ mood perky are made in China. Even all funeral items like the coffins that place the Americans in eternal rest in their graves are “Made in China”.

There was once a saying that ‘anything made in America will invariably be copied in Japan’. Japan in fact prospered by American products copied in their land. The trend of copying American products that started in Japan in the 1950s later became an industrial fashion in the rest of Asia. The new revolution of imitating western products continued in full throttle in countries like Taiwan, Korea, China and India and of late in Bangladesh, Vietnam and Cambodia. Imitation jobs are done so subtly that it does not constitute a copyright infringement.

Every high- or low-technology product China or Taiwan could manage to buy from the USA or elsewhere has always been reverse-engineered, copied and sold. A Chinese firm can thus sell America’s innovations both in China and abroad. US exports thus become Chinese exports within a year. One can forecast that Bangladesh, Vietnam and Laos too are going to be the next models to follow what China is now doing to win the heart and soul of American consumers.

A roaring business thus thrived in Asia in imitating the Western technology and products and selling the imitated products back to the West, especially to America, at damn cheap prices, thanks to cheap labor in Asia and enormous demands of American consumers who are traditionally big spenders and who of late are hungry for cheaper products. Most importantly, thanks to the beauty of American culture which imparts and distributes education and technology to the foreigners who later vie with Americans for their jobs.

China’s president Hu Jintao has just finished his visit to the United States. Everybody in America is talking about growing Chinese economic might. Some analysts predict China’s rise, not in the distant future, to a military power to match America. The US defense budget is still the biggest in the world at around $700bn. China nonetheless has the second largest with its military budget soaring since 1999 as the country’s economy has been growing.

China claims itself a developing country which is true as it is still a poor country when the law of average is applied considering its vast population. But China is a power and well on the way to match America as an economic superpower. The balance of trade between the US and China is starkly in favor of China with US exporting US$ 81.8 billion and importing US$ 344.1 billion. Until the 1990s, the US economy grew strongly while China remained relatively stagnant. Since 2000 China’s growth rate has surged, driven by economic reforms, a huge workforce and massive investment. If China progresses in the present pace and race, some nihilists believe, America could soon find itself in a position of global insignificance.

All these talks and the high-level Chinese officials visiting America perhaps would not have taken place today had there been no thawing of the ice between China and the US about 32 years ago when American President Jimmy Carter met Chinese leader Deng Xiao Ping back in 1979. That historic China visit of President Carter normalized relations between the two countries.

Chinese President Hu Jintao’s recent visit, as American President Obama has hinted, may be the basis for the next 30 years of ties between the two nations.

There are issues that have to be settled: issues like the dispute over China’s currency, the yuan, which America says is kept artificially low to help Chinese exporters. Besides currency, there are other issues of balance of trade, defense and security. The two presidents have promised to co-operate in solving these disputes.

Mr. Hu will obviously try his best to settle these thorny issues between America and China and this visit could be his last chance to forge a lasting settlement as his current visit to America could be his last trip to the US before he hands over his power in 2013.

Today’s world of trade is different from that in the past. By the volume of simple consumer items like T-shirts or lipsticks made in a particular country, today’s analysts do not really measure that country’s economic prowess in the real world of trade. The real prowess lies in the capability of producing the basic foundations on which the products are made: machines that weave the fabrics of the T-shirts, the chemicals that are used to produce the lipsticks or the software that run the machines or the technological strength to make colossal airplanes, jet fighters, missiles, naval ships and submarines fitted with nuclear arsenals.

America has always been eyeing those domains of prowess. China is still a top market for American exports, supporting nearly half a million US jobs. The US is therefore encouraging China to buy tens of billions of dollars of aircraft, car parts, agricultural goods and beef.

Trade between the US and China is worth US$ 400 billion, up from US$ 100 million 30 years ago when the US formalized relations with the communist state. A deal has already been made for China to buy US$ 45 billion worth of American products and services which include a highly sought-after US$ 19 billion deal for 200 Boeing airplanes that would help create 235,000 US jobs, in addition to half a million US jobs already being generated by the United States’ annual US$ 100 billion in exports to China.

China is also looking at the American military and technological prowess. Only the other day China confirmed that it had tested a prototype J-20 stealth fighter, invisible to radar. China has now the capacity to do what America has done during the last few decades, thanks to China holding the world’s largest foreign currency reserves at US$ 2.85 trillion and interestingly a major share of the Chinese reserve is the US government’s debt to China.

What is irking to the Americans is China’s peculiar monetary policy of keeping their currency artificially weak. Observers suggest that China, before it is too late, should address the burning issue of currency manipulation that is causing collateral damage not only to American economy but also to the world as a whole. Chinese President has however promised to cooperate with the US to ensure a level field of international trade by addressing all the disputes over all the economic issues including that of revaluation of Chinese currency.

Reality is that America is a debtor and China a creditor. America may persuade China into enhancing the value of their currency, doing more to address the trade gap, improving their human rights records, doing away with their denial of religious freedom in China, stopping the use of coercive abortion (as a result of China’s one-child policy), bettering their efforts to protect intellectual properties and leashing back North Korea from behaving belligerently and from advancing its nuclear programs. But, China, notwithstanding their cooperative tones, will take its own time and space to address the issues perhaps not as fast as the US world is hoping.

However, one striking difference the world has watched this time is the difference between the current visit of Chinese President to the US with Obama in the White House and the same Chinese President visiting America when Bush was in the same White House. Five years ago, when Bush was in Office, President Hu Jintao’s visit was blemished by upsetting codes of behavior and protocol blunders as the US came away with absolutely nothing. This time round, with Obama in Office, the US could come away with the business community enthusiastically happy with US$ 45 billion in deals and a promise from the Chinese leader to cooperate in solving the issues that are standing in the way of US-China friendship. With a forward thinking and strong President like Obama in command America hopefully can be moved back to the prominence that this country had before 2000.

All said and done, America will remain America as it was. Whenever America was pushed hard, by the British Empire in the 1800’s, by the Japanese at Pearl Harbor in 1941, by the Soviet Union during the Cold War in the last half of the last century, it steadfastly remained a nation that found its will to act upon. This time too this great nation, many optimist Americans firmly believe, will remain a nation that none will dare make their enemy.