[aquadayAquaks]

http://select.nytimes.com/2007/05/24/opinion/24kristof.html?n=Top%2fOpinion%2fEditorials%20and% 20Op%2dEd%2fOp%2dEd%2fColumnists%2fNicholas%20D%20 Kristof

Fred R. Conrad/The New York Times
Nicholas D. Kristof.

On the Ground

This is a city you’ve probably never heard of, yet it has a population of 10 million people who fill your dressers and closets. By one count, 40 percent of the sports shoes sold in the U.S. come from Dongguan.

Just one neighborhood within Dongguan, Dalang, has become the Sweater Capital of the World. Dalang makes more than 300 million sweaters a year, of which 200 million are exported to the U.S.
Keep towns like this in mind when American protectionists demand sanctions, after the latest round of talks ending yesterday made little progress. Some irresponsible Democrats in Congress would have you believe that China’s economic success is simply the result of currency manipulation, unfair regulations and pirating American movies.

It’s true that China’s currency is seriously undervalued. But places like Dongguan have thrived largely because of values we like to think of as American: ingenuity, diligence, entrepreneurship and respect for markets.

The people in Dalang, the Sweater Capital, used to be farmers, until a Hong Kong investor opened a sweater factory at the dawn of the 1980’s. After a few years, the workers began to quit and open their own factories, and both the bosses and the staff work dizzyingly hard. One factory worker here in Guangdong Province told me that she works 12-hour shifts, seven days a week, 365 days a year, not even taking time off for Chinese New Year. She chooses to work these hours to gain a better life for her son. If protectionists want somebody to criticize for China’s trade success, blame that woman and millions like her.
Remember that China isn’t like 1980s Japan, which had a sustained huge surplus with nearly everybody. China’s global surplus has surged in the last five years, but traditionally its global trade position has been close to a balance, and it still has a trade deficit with many countries.

China imports components, does the low-wage assembly, and then exports the finished products to the U.S. — so the whole value appears in the Chinese trade surplus with the U.S., even though on average 65 percent of the value was imported into China. When a Chinese-made Barbie doll sells in the U.S. for $9.99, only 35 cents goes to China.

Sure, China pirates movies and software — but the U.S. was even worse at this stage of development (when we used to infuriate England by stealing its literary properties without paying royalties). Pirated DVDs are sold openly on the streets of Manhattan, while sellers in China can be far more creative. A couple of days ago, I dropped into a small DVD shop in Beijing to check its wares. Everything seemed legal.

Then the two saleswomen asked if I wanted to see American movies — and tugged at a bookshelf, which rolled forward on wheels. Behind was a door; one of the saleswomen whisked me into a secret room full of pirated DVDs. That’s piracy — but also capitalism at its harshest and hungriest. There are plenty of reasons to put pressure on China, including its imprisonment of journalists and its disgraceful role in supplying the weaponry used to commit genocide in Darfur. But whining about the efficiency of Chinese capitalism is beneath us.

All that said, the Chinese development model is running out of steam.

Labor shortages are growing and pushing up wage costs. Factories are having to spend more money to improve worker safety and curb pollution. The environment is such a disaster that 16 of the world’s most polluted cities are now in China.
China will also be forced to appreciate its undervalued currency, further pushing up costs. The “China price” will no longer be the world’s lowest, and millions of jobs making T-shirts and stuffed toys will move to lower-wage countries like Vietnam and Bangladesh.

So if China is going to continue its historic rise, it will have to move up the technology ladder and shift to domestic consumption as its economic engine. Yet the share of consumption in China’s economy has fallen significantly since 2000.
So as one who has been profoundly optimistic about China for the last 25 years, I think it’s time to sober up. President Hu Jintao is China’s least visionary leader since Hua Guofeng 30 years ago, and China has the burden of unusually weak leadership as it navigates a transition to a new economic model as well as a political transition to a more open society.
I’m betting China will pull it off, but I don’t think the world appreciates the risks and challenges ahead.

You are invited to comment on this column at Mr. Kristof’s blog, www.nytimes.com/ontheground. Also, Mr. Kristof has been filing regular video reports from his journey across China. The latest video, "Factory of the World," is from his visit to a sweatshop in Guangdong Province.

[Qeiafib]

Yep, Capitalism at it's grandest:

"It’s true that China’s currency is seriously undervalued".

"One factory worker here in Guangdong Province told me that she works 12-hour shifts, seven days a week, 365 days a year, not even taking time off for Chinese New Year."

"She chooses to work these hours to gain a better life for her son."

(perhaps if she were being properly paid, she wouldn't "choose" (?) to work "12-hour shifts, seven days a week, 365 days a year. Aren't these places called "sweatshops"?)

"If protectionists want somebody to criticize for China’s trade success, blame that woman and millions like her."

(MILLIONS like her?.... yep... sounds like a workers paradise... hardly worth criticizing...)

"When a Chinese-made Barbie doll sells in the U.S. for $9.99, only 35 cents goes to China."

(lovely)

"But whining about the efficiency of Chinese capitalism is beneath us."

http://news.bbc.co.uk/1/hi/programme...nt/2139401.stm

"The environment is such a disaster that 16 of the world’s most polluted cities are now in China."

[rorsvierwelia]

Look I hear ya and all but I am not sure your comments are germane to the article. RIght now, China ranks 6th in the world in GNP. At current growth rates they will leapfrog Western Eurpean economies of the French, Gernams, and Briish and move up to 3rd in 5 -10 yrs. And in 20yrs time they will overtake Japan and the US. And when they do so, it will not be because of protectionism, chile labor, or sweat factories.. they will have done so through hard work and drive.. and India is right behind them

I am a pretty liberal guy, but I gotta tell ya, The Chinese and Indians are out working us and more importantly out learning us. The world is getting flatter and flatter and market places are becoming more and more global and transparent. We will reach a point where we wil lose our marketplace leadership positions in technologcially advanced commodities.

And it is scary. Here is a country that holds a considerable amount of our debt and is becoming more and more wealthy. Creditor staus brings leverage and wealth brings influence. Look at the French.. clearly they see it coming hence the recent election results.

[Xutrsavf]

When you are hungry, you work harder.

These countries are still hungry. They will get as lazy as the Italians in no time, don't worry!!!

[*Playergirl*]

China is so corrupt that at least 1/5 of its GDP is wasted through deficiencies through out the economy. Not only is it destroying it's environment at a break neck pace, it is condemning it's citizens to disease and environmental problems for centuries to come. Some of the pollution in central China is so bad that the average life expectancy there is less then in sub Saharan Africa.

Chinese middle class is smaller then in most DEVELOPING countries as a percentage of the whole population. The state bureaucracy is so pervasive it is almost out of reach to the regular Chinese and only responds to bribes and massive payoffs by foreign companies.

China has a byzantine justice system, there is no presumption of innocence, nor respect for the defendants rights.

Thousands of people are shot without trial every year. Political dissent is suppressed brutally, citizens rights are a foreign concept. Human rights are ridiculed and forced abortions are a ROUTINE PRACTICE. Children are indoctrinated at an early age to be atheists and believe only in the power of the communist party and money. There is huge army which has many entities and is a domineering factor in society. Defense spending is growing at almost 20% a year, China is building new weapons at a break neck pace.

China is a BACKWARDS society just like RUSSIA and other authoritarian systems. It will take MANY DECADES for it to be able to catch up with the west where peoples rights would not be violated daily.

THERE CAN BE NO LIFE WITHOUT FREEDOM AND DIGNITY

[apatteopipt]

All hail China!

All hail the 84 hour work-week!

[KneefeZes]

When you are hungry, you work harder.

These countries are still hungry. They will get as lazy as the Italians in no time, don't worry!!!

I guess that is my point or at least one of them...

The other side of the coin has to do with the Wesern world's complacency in the area of micro and macro economic matters. . Our econony is fueled by high consumer consumption rates, alarming debt, low personal savings, trade inbalances,and huge national debt held with other countries. And the US is not the only country with problems... far from it... in the EU, the french rejected a EU constitution last year for fear that it would undercut the treasured 35 hour work week, the Germans have been in econonmic funk for years.. Personally, i applaud work/life balance priorities... but the people in the world who do not share this view are going to eat our lunch if we are not carefull ... or maybe even if we are...

Sorry, but that is the way it is....

China is a BACKWARDS society just like RUSSIA and other authoritarian systems. It will take MANY DECADES for it to be able to catch up with the west where peoples rights would not be violated daily.

All the more reason to be concerned. They do not share our values, but they hold our debt and are quickly becoming a global economic powerhouse. Think more pragmatically and less idealistically for a moment .. the world is flat and we are all connected. With wealth and creditor status come geopolical leverage the more debit/wealth they hold, the less influence we have over them. If China were to dump USD's from there treasury into the Global FX market, the value of the USD would plummet, the US economy would suffer hyper inflation, the rest of the world would follow. They are unlikely to do so at this point in time n consideration of their own self interests but they may not always be so dependent upon us and it is still not a very comfortable position for us to be in. Do you realize the foreign policy implications?

[bashansasasasa]

but they hold our debt and are quickly becoming a global economic powerhouse.

Have to go; no time for this complicated point, but it has been discussed on other threads, and there are published articles about such a scenario.

A creditor nation dumping treasuries would never happen.

Japan has been the #1 US debtholder for years, and they are a global economic powerhouse.

[JTS_tv]

^^ In general, I agree... but I do worry about about a point where China becomes less concerned and dependent upon US economic health.And irrespective of weather or not that day comes, there is no question that their status as a large creditor nation impacts our diplomatic standing with them. You do not see the US government exerting all that much pressure on the Chinese over human rights issues, do you?

I would also put to you that Japan falls into a different bucket in so far as they have been a geopolitical aly of the US for 60 years and share similar economic/social values and strategic interests. The Japanese are also dependent upon the US for defense.

In tems of the attached article, I am not sure if the message portrayed is a good or bad thing ... but the contrast vis-a vis the China article is striking in terms of value differences with work/life balance, and self- actualization vs the greater good. In addition, there are references to the degree in which differences in child rearing and coddling/nurturing effect expectations in the workplace.

Sorry about the link... i tries to cut and paste but was not able to ...

http://www.usatoday.com/money/workpl...06-gen-y_x.htm

[GWRIeEQp]

Ninja, could you please explain your comment : "These countries are still hungry. They will get as lazy as the Italians in no time, don't worry!!!"

-----

In the meantime: Data for 2005 (article published February 2007) shows Italian worker productivity higher than Japan. Higher than Canada, Germany, and the UK:

http://www.statistics.gov.uk/cci/nugget.asp?id=160

[lungumnentibe]

For the record, the title of that article was "Pirates and Sanctions."

In my opinion, any country that has a society with so much internal repression, so many restrictions on foreign investment, such a poorly-established system of laws and standards, and a central government planning virtually the entire economy doesn't equate to capitalism. Capitalism at its finest? Far from it. Check back in a few decades.

[scoundtrack]

For the record, the title of that article was "Pirates and Sanctions."

In my opinion, any country that has a society with so much internal repression, so many restrictions on foreign investment, such a poorly-established system of laws and standards, and a central government planning virtually the entire economy doesn't equate to capitalism. Capitalism at its finest? Far from it. Check back in a few decades.

For the record, I am not condoning the lack of rule of law in China nor denying that govt repression still exists, but that does not detract from the fact that Chinese people have a work ethic that has long passed us by. And it is that work ethic togethe with a cultural bias toward living a frugal life style and within ones means, a sense collectivism, and a willingness to sacrafice that drives the growth we see today. . They are out working us pure and simple, and that is what I mean by capitalism at its finest.

One of the article's main theme is that US protectionalist trade and IP policies are to an extent red herings because, because while unfair practices and violations exist, those factors are not the primary drivers of China's economic boon. Production output, foreign investment, and industrialization are driving China right now. The Chinese Govts record on human rights violations and social, political and religous freedoms is reprehensible. But that does not take away from, nor is it a primary driver of their economic performance in terms of GNP growth, improving living standards, and by extendion Global infuence. If we do not face up to that we are simply hiding our head in the sand.

China still needs to provide a citizen living standard that would enable greater domestic consumption, but they are leaps and bounds ahead of where other industrialized countries were at this point in thier development

[milfovoxapl]

I liked the article, but oh, my weary eyes. In the future, please post the link to the article, and break the article up into paragraphs here and there. It was a good reminder, though, for ole Punzel to get her trifocals updated.

[j2Y6Ysmb]

^
NP. I thought we didn't like NY Times links though b/c they disappear over time.

[avaincmolla]

It's true, NY Times links are notorious for vanishing. But please post them anyway, for that period of time that they are still up. Further reading, (additional) photos, and other related media often accompany Times articles. Also, some people subscribe to NY Times online and can view archives of the link free of charge. Thanks for being so quick to respond.

[Siuchingach]

Hi,

Added the link and paragraph breaks. Not sure if the link is usable thouhg because this may be a subscriber only article.

[Nglvayhp]

http://select.nytimes.com/2007/05/28/opinion/28kristof.html?n=Top%2fOpinion%2fEditorials%20and% 20Op%2dEd%2fOp%2dEd%2fColumnists%2fNicholas%20D%20 Kristof
Kristoff is on a roll with China.

More examples of what we need to do in order to secure our future as a Global power. We need leaders with vision who understand the value of longer term investments in education and other social and economic infrasturcture, as opposed to the babble we hear today about unfair trade pactices.
-------------------------------------------------


Op-Ed Columnist
The Educated Giant

by NICHOLAS D. KRISTOF
Published: May 28, 2007
Taishan, China


With China’s trade surplus with the United States soaring, the tendency in the U.S. will be to react with tariffs and other barriers. But instead we should take a page from the Chinese book and respond by boosting education.
One reason China is likely to overtake the U.S. as the world’s most important country in this century is that China puts more effort into building human capital than we do.

This area in southern Guangdong Province is my wife’s ancestral hometown. Sheryl’s grandparents left villages here because they thought they could find better opportunities for their children in “Meiguo” — “Beautiful Country,” as the U.S. is called in Chinese. And they did. At Sheryl’s family reunions, you feel inadequate without a doctorate.

But that educational gap between China and America is shrinking rapidly. I visited several elementary and middle schools accompanied by two of my children. And in general, the level of math taught even in peasant schools is similar to that in my kids’ own excellent schools in the New York area.
My kids’ school system doesn’t offer foreign languages until the seventh grade. These Chinese peasants begin English studies in either first grade or third grade, depending on the school.

Frankly, my daughter got tired of being dragged around schools and having teachers look patronizingly at her schoolbooks and say, “Oh, we do that two grades younger.”

There are, I think, four reasons why Chinese students do so well.
First, Chinese students are hungry for education and advancement and work harder. In contrast, U.S. children average 900 hours a year in class and 1,023 hours in front of a television.

Here in Sheryl’s ancestral village, the students show up at school at about 6:30 a.m. to get extra tutoring before classes start at 7:30. They go home for a lunch break at 11:20 and then are back at school from 2 p.m. until 5. They do homework every night and weekend, and an hour or two of homework each day during their eight-week summer vacation.

The second reason is that China has an enormous cultural respect for education, part of its Confucian legacy, so governments and families alike pour resources into education. Teachers are respected and compensated far better, financially and emotionally, in China than in America.

In my last column, I wrote about the boomtown of Dongguan, which had no colleges when I first visited it 20 years ago. The town devotes 21 percent of its budget to education, and it now has four universities. An astonishing 58 percent of the residents age 18 to 22 are enrolled in a university.

A third reason is that Chinese believe that those who get the best grades are the hardest workers. In contrast, Americans say in polls that the best students are the ones who are innately the smartest. The upshot is that Chinese kids never have an excuse for mediocrity.

Chinese education has its own problems, including bribes and fees to get into good schools, huge classes of 50 or 60 students, second-rate equipment and lousy universities. But the progress in the last quarter-century is breathtaking.

It’s also encouraging that so many Chinese will shake their heads over this column and say it really isn’t so. They will complain that Chinese schools teach rote memorization but not creativity or love of learning. That kind of debate is good for the schools and has already led to improvements in English instruction, so that urban Chinese students can communicate better in English than Japanese or South Koreans.

After I visited Sheryl’s ancestral village, I posted a video of it on the Times Web site. Soon I was astonished to see an excited posting on my blog from a woman who used to live in that village.

Litao Mai, probably one of my distant in-laws, grew up in a house she could see on my video. Her parents had only a third grade education, but she became the first person in the village to go to college. She now works for Merrill Lynch in New York and describes herself as “a little peasant girl” transformed into “a capitalist on Wall Street.”

That is the magic of education, and there are 1.3 billion more behind Ms. Mai.
So let’s not respond to China’s surpluses by putting up trade barriers. Rather, let’s do as we did after the Soviet Union’s launch of Sputnik in 1957: raise our own education standards to meet the competition.

You are invited to comment on this column at Mr. Kristof’s blog, www.nytimes.com/ontheground.

[enactolaelant]

For the record, I am not condoning the lack of rule of law in China nor denying that govt repression still exists, but that does not detract from the fact that Chinese people have a work ethic that has long passed us by. And it is that work ethic togethe with a cultural bias toward living a frugal life style and within ones means, a sense collectivism, and a willingness to sacrafice that drives the growth we see today. . They are out working us pure and simple, and that is what I mean by capitalism at its finest.

For you, the work ethic is proof enough. For me, it's only one piece of the puzzle. Capitalism is not sustained alone by hard-working people: I can guarantee you that in virtually every other type of political economy, be it feudalism, communism, or military dictatorship, the vast majority are working hard, long hours every day to survive. And that's just the problem with China (for now): too many people lack the freedom to survive without working in sweatshops for poor pay, in poor conditions, having many of their basic freedoms of expression trampled upon.

Capitalism is inseparable from freedoms, and freedoms mean individual choice. Ask anyone what the greatest achievement of capitalism is, and the answer you get will be some form of: "I don't have to worry about survival." Once you solve that elemental problem, you're *free* to pursue other areas of self-expression - through the work that you do, the way you spend leisure time, the way you live your life. I see little of that in today's China, which - as you say - has a strong collectivist strain still in it. And the Communist politicians, ever fearful of losing more control as the country comes closer to prosperity, do their best to prevent the spread of freedom through prosperity.

China still needs to provide a citizen living standard that would enable greater domestic consumption, but they are leaps and bounds ahead of where other industrialized countries were at this point in thier development Tough to do that when the modus vivendi seems to be: "live frugally, live obediently". I also doubt your claim of China being "leaps and bounds" ahead of its predecessors. Sounds made up.

[Aozozbag]

Ask anyone what the greatest achievement of capitalism is, and the answer you get will be some form of: "I don't have to worry about survival." Once you solve that elemental problem, you're *free* to pursue other areas of self-expression - through the work that you do, the way you spend leisure time, the way you live your life. That is a ridiculous statement. How does capitalism remove the need to worry about survival? One still has to worry about earning enough money to eat and stay well, doesn't one? And to raise children that will survive also, no? People in capitalist societies worry as much as anyone else, so what on earth are you talking about??
I guess if you're rich, or have a rich mommy and daddy, you might not understand how intense the worrying can be for those that struggle every day to keep enough food on the table and a roof over their family's heads.

[Buyemae]

I specifically said achievement of capitalism. As an economic system, it's not a magic wand that solves the problem of survival miraculously and instantaneously. The legacy of it, as demonstrated over the years in a country like the US, is that it has created an average standard of living that's high enough to put aside the worry over the most basic of necessities to survive - food, clothing, and shelter.

I don't think that's an outlandish statement at all, especially when taken into a historical context and compared to non-capitalist systems. Also, I'm not rich.