China, Inc.: How the Rise of the Next Superpower Challenges America and the World [Hardcover]

Ted C. Fishman (Author)

Book Description

Publication Date: February 1, 2005

China today is visible everywhere - in the news, in the economic pressures battering America, in the workplace, and in every trip to the store. Provocative, timely, and essential, this dramatic account of china's growing dominance as an industrial super-power by journalist Ted C. Fishman explains how the profound shift in the global economic order has occurred - and why it already affects us all.How has an enormous country once hobbled by poverty and Communist ideology come to be the supercharged center of global capitalism? What does it mean that China now grows three times faster than the United States? That China uses 40 percent of the world's concrete and 25 percent of its steel? What is the global impact of 300 million rural Chinese walking off their farms and heading to the cities in the greatest migration in human history? Why do nearly all of the world's biggest companies now have large-scale operations in China? What does the corporate march into China mean for workers left behind in America, Europe, and the rest of the world?Meanwhile, what makes China's emerging corporations so dangerously competitive? What could happen when China will be able to manufacture nearly everything - computers, cars, jumbo jets, and pharmaceuticals - that the United States and Europe can, at perhaps half the cost? How do these developments reach around the world and straight into the lives of all Americans?These are ground-shaking questions, and China, Inc. provides answers.Veteran journalist and former commodities trader Ted C. Fishman paints a vivid picture of the megatrends radiating out of China. Fishman's account begins with the burgeoning output of China's vast low-cost factories and the swelling appetite of its 1.3 billion consumers, both of which are being driven by historically unprecedented infusions of foreign capital and technological know-how. Traveling through China's frenetic landscape of growth, Fishman visits the factories, markets, streets, stores, towns, and cities where the story of Chinese capitalism is being lived by one-fifth of all humanity. Fishman also draws on interviews with Chinese, American, and European workers, managers, and executives to show how China will force all of us to make big changes in how we think about ourselves as consumers, workers, citizens, and even as parents. The result is a richly engaging work of penetrating, up-to-the-minute reportage and brilliant analysis that will forever change how readers think about America's future.

--This text refers to the MP3 CD edition.

Editorial Reviews

Amazon.com Review

China has the world's most rapidly changing large economy, and according to Ted Fishman, it is forcing the world to change along with it. "No country has ever before made a better run at climbing every step of economic development all at once," he writes, in China, Inc.: How the Rise of the Next Superpower Challenges America and the World. China is currently the largest maker of toys, clothing, and consumer electronics, and is swiftly moving up the ladder in car production, computer manufacturing, biotechnology, aerospace, telecommunications, and other sectors thanks to low-cost, high-tech factories. China is also where the world is investing. In 2004, for instance, the city of Shanghai alone attracted over $12 billion in direct foreign investment, roughly the same amount as all of Indonesia and Mexico received. In tracing China's ascendancy over the past 30 years (with annual growth of an astonishing 9.5 percent), Fishman presents a flood of facts, figures, forecasts, and anecdotes and examines the implications of this unprecedented growth for China, the U.S., and the rest of the world.

Calling China's huge population "arguably the greatest natural resource on the planet," Fishman details how hundreds of millions of peasants have migrated from rural to urban areas to find manufacturing jobs, providing an unlimited, low-wage workforce to power China's economy. In the process, this shift has changed both Chinese culture and the global business climate in significant ways. Simply put, American companies can't compete with wages as low as 25 cents an hour and lack of regulation and oversight, so are forced to move their operations to China or completely change the focus of their business. And it's not just a problem for the U.S.--even Mexico is outsourcing to China. Though it remains to be seen whether this will truly be the "Chinese Century" as Fishman asserts, China, Inc. is a brisk and informative look at why so many American corporations, and American jobs, are heading to China. --Shawn Carkonen

From Publishers Weekly

A lively, fact-packed account of China's spectacular, 30-year transformation from economic shambles following Mao's Cultural Revolution to burgeoning market superpower, this book offers a torrent of statistics, case studies and anecdotes to tell a by now familiar but still worrisome story succinctly. Paid an average of 25 cents an hour, China's workers are not the world's cheapest, but no nation can match this "docile and capable industrial workforce, groomed by generations of government-enforced discipline," as veteran business reporter (and Chicago Mercantile trading firm founder) Fishman characterizes it. Since Mexican wages were (at the time) four times those of China, NAFTA's impact has been dwarfed by China's explosive growth (about 9.5% a year), and corporations and entrepreneurs operating in China have few worries about minimum wages, pensions, benefits, unions, antipollution laws or worker safety regulations. For the U.S., Fishman predicts more of what we're already seeing: deficits, declining wages and the squeezing of the middle class. His solutions (revitalize education, close the trade gap) are not original, but some of his statistics carry a jolt: since 1998, prices in the U.S. have risen 16%, but they've fallen in nearly every category where China is the top exporter; a pair of Levis bought at Wal-Mart costs less today, adjusted for inflation, than it did 20 years ago—though the company no longer makes clothes in China. First serial to the New York Times Magazine; author tour.(Feb.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

See all Editorial Reviews

Product Details

• Hardcover: 352 pages
• Publisher: Scribner; First Edition edition (February 1, 2005)
• Language: English
• ISBN-10: 0641783531
• ISBN-13: 978-0641783531
• ASIN: 0743257529
• Product Dimensions: 6.3 x 1.1 x 9.4 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 3.8 out of 5 stars  See all reviews (94 customer reviews)
• Amazon Best Sellers Rank: #550,901 in Books (See Top 100 in Books)

More About the Author

Ted C. Fishman's essays and reports have appeared in The New York Times Magazine, Money, Harper's, Worth, Esquire, USA Today, GQ, Chicago magazine, and Business 2.0. A former floor trader and member of the Chicago Mercantile Exchange, he ran his own trading firm until 1992. A graduate of Princeton, he lives in Chicago.

Most Helpful Customer Reviews

97 of 107 people found the following review helpful

5.0 out of 5 stars From Middle Kingdom to Global Juggernaut March 25, 2005

By Izaak VanGaalen

Format:Hardcover

"China Inc" reminds me of the "Japan Inc" of the 1980's. The Japanese business model, at the time, was very successful and feared by many as superior to our own. Since then, we've had the longest economic expansion in our history and Japan has had the longest recession since the end of World War II. Should we feel complacent? Definitely not. The economic juggernaut that is emerging in China is different and it will be more difficult to compete against. Our present government policies and our patterns of consumption are feeding the beast. We are a primary component of China Inc.

Ted C. Fishman is a veteran journalist and former commodities trader who has traveled widely in China and interviewed many workers, managers, and exucutives of Chinese and American companies. He gives us an avalanche of facts detailing the incredible growth that the Chinese economy has experienced in the last 20 years (averaging about 10% annually as opposed to our meager 3%). Can this growth rate be sustained. Fishman doesn't have the answer but he gives us a multitude of statistics to draw our own conclusions.

There is, in retail and manufacturing circles, something known as "the China price." Goods manufactured in China cost anywhere from 30% to 50% less than what they could possibly be made for in the US, in many cases it is less than the cost of materials. American multinationals - such as GM and Wal-Mart - are telling their suppliers to meet the China price or else - which means that the suppliers either set up shop in China or go out of business. Never mind trying to compete on price, China has an abundance of production workers that are willing to work for 40 cents an hour. Even at the high end they have chip designers that are willing the work for $2,000 a month, overtime included. The supply of labor is almost endless, keeping wages at a minimum. Anywhere from 100 to 300 million people migrated from farms to factories in the last two decades. China also graduates more scientists and engineers than the US, making the high-tech industries increasingly more competitive. And among the scientists and engineers that graduate from Americian universities one will find a large percentage are Chinese that will go back to China to work, even at a lower salary.

By meeting the China price multinationals are accelerating the industrialization of China by moving production there and, by the same token, they are deindustrializing here. It has been a major factor in the 2.7 million jobs lost in manufacturing since 2000. Even many small and medium size companies have no choice: move to China or go out of business.

Multinationals alone are not to blame, the American consumer has a seemingly endless appetite for low-cost goods. Low-cost Chinese goods have saved the American consumer more money than last year's tax cuts. What this leads to is a gigantic trade deficit with China of about 150 billion a year - and climbing (the US balance-of-payments deficit is nearly a record 6% of GDP). Add this to the record federal budget deficit and it should come as no surprise that the value of the dollar is in decline. If this situation is not rectified the global financial system will be in for a shock.

The Chinese are benefiting from our relationship in the short and the long term, the US is benefiting in the short term because they are receiving low-cost goods, however the long term outlook for the US is grim. Not only do the Chinese buy up many of the T-bills that finance our federal budget deficits, they buy up mortgages on the secondary market in order to keep us supplied with low-cost money. They are, in effect, lending us money to buy their products. The burgeoning trade and federal budget deficits are a serious problem. It is, however, not a Chinese problem, it's an American problem. The only legitimate complaint that we can make is that they keep the yuan tied to the dollar. No matter how low the dollar goes it won't help close the trade deficit with China.

Fishman has an excellent chapter called "Pirate Nation." He describes how setting up production in China is a double-edged sword for American companies. Everyone knows that these products are studied, analyzed, and reproduced perhaps with a few minor differences for local color. For example, GM spent billions of dollars producing a car for the local market. It was exhibited at the Shanghai Auto Show with a sticker price of $9,000. At the same show a Chinese auto company had basically the same car - called the Chery - for only $6,000. The Chinese auto company was owned in part by Shanghai Auto, GM's local joint-venture partner. Similarly, Microsoft is well aware of the fact that only about 10% of its software is actually purchased and the other 90% is pirated; they have no choice but to stay in the Chinese market. Indeed, at the World Economic Forum, Bill Gates seemed more optimistic about the Chinese economy than the American economy.

China contiues to develop at a frantic pace. They add 4 to 6 million cell phone subscribers every month - over a year they would be adding as many as the entire cell phone market of Germany. The Chinese are adding infrastructure every month that is the equivalent of a Houston, Texas. They are in fact lifting more people out of poverty than any country in the history of the world. We can all applaud their achievements.

While I was reading this book, I kept thinking this is good news for China, bad news for the US. This book should be read by those who are concerned about America's place in the 21st century, because it might well be known as the Chinese Century. China, too, faces some daunting challenges but they seem to have the edge in optimism and dynamism - that which America had at the beginning of the 20th century.

27 of 31 people found the following review helpful

5.0 out of 5 stars Somebody Finally Gets It Right about China March 22, 2005

By Steve Koss VINE™ VOICE

Format:Hardcover

I spent most of the period from 2001 - 2004 living and teaching in Suzhou, China, a smallish city by Chinese standards that, in the last decade, has come out of nowhere to have the fourth largest GDP in the country. I have also read dozens of books attempting to describe what's going on in China. Most get parts of the picture right, but many are badly dated. Regardless, no one has done as good a job as Ted Fishman in describing the business and economics of today's China. If you truly want to understand how China's business engine works and how it is changing the rest of the world in ways we have barely begun to recognize, CHINA, INC. is an essential read, and easily the best book published on the subject.

Mr. Fishman approaches his subject matter from a wide variety of informative angles, supporting his arguments with factual data, statistics, and numerous anecdotes, any number of which I recognized from Chinese news reports. He begins with a look at Shanghai's transformation into one of the world's leading cities. He next steps back in time to present an historical perspective on how China's peculiar brand of "rule-breaking" capitalism came into being, illustrated by a fascinating look at the city of Wenzhou. He traces the rise of Shenzhen in southern China and the growth of the real estate and personal automobile markets. Chapters 6 through 9 are the strongest in the book, detailing China's impact on business in Pekin, Illinois and Rothenburg, Germany, the role of Wal-mart, the global impact of the "China price," technology transfer, and product counterfeiting and piracy. Throughout, these topics are illustrated with plentiful stories, specific examples, and commentaries from executives in the effected industries.

Fishman makes it clear that China has become a formidable global competitor, with the potential to become an economic juggernaut. The numbers are enormous, the entrepreneurial drive is remarkable, the educational system is extraordinarily focused a single goal, and the speed of adaptation and ability to capture market share in every industry they tackle are frightening. Combine this with massive government subsidies and a laissez faire attitude with regard to patent and intellectual property rights, and you have the makings of a country in which anything is possible, at the least cost imaginable. China's steady capture of manufacturing jobs from the West, its enormous build-up of American dollar and Treasury bond holdings, its thirst for oil and natural resources, and its steady production of science and engineering graduates create the distinct possibility of a huge international power shift over the next 30 - 50 years. CHINA, INC. presents these arguments clearly and forcefully, in an engaging and very readable manner.

CHINA, INC. is at its best describing the country's entrepreneurial spirit, springing from peasants, small villages, and hungry neo-capitalists starting on a shoestring. Their no-holds-barred drive for economic success and quick payoff leads tens of thousands into every corner of the business world. For example, Fishman illustrates effectively how migrant peasants struggling for a toehold in Shanghai have discovered eBay and the Internet. More significant, he shows how entire Western industries like furniture, buttons, socks, shoes, and Christmas ornaments have been rocked by competition from small-scale Chinese entrepreneurs. No State agency planned and studied these industries, no management consultants prepared market potential reports or competitive analyses, and no governing body stepped in to create rules and regulations. They happened because small businessmen smelled opportunities and pursued them ruthlessly. That's the competition America faces for the next fifty years. CHINA, INC. draws a clear picture of what it looks like and what it portends.

My biggest criticism of CHINA, INC. is that I believe Mr. Fishman has somewhat overstated his case by downplaying China's negatives, of which there are many beyond the obvious ones of rural poverty, wealth imbalance, and industrial pollution (sounds like the U.S. prior to 1940, doesn't it?). First, the country has a totally dysfunctional banking system, burdened by weak controls, massive frauds and embezzlements, and non-performing loans on the order of 40% or more. Second, China's stock markets are nothing more than poorly regulated casinos - it's no coincidence that their stock markets are off by nearly half over the last 3-4 years while their GDP has skyrocketed. Third, the same lack of intellectual property rights protection that enables China to copy almost anything will inhibit its own best talents from creating anything new out of the same fear of counterfeiting. Fourth, China's form of capitalism almost completely lacks a rule of law - contracts are meaningless, courts are unhelpful, and connections matter far more than right or wrong as defined by law. Finally, China stands one day to find itself repeating Japan and Korea's experience once its labor rates begin to rise and manufacturing jobs begin to migrate once again, perhaps to India, or maybe Africa. History has a way of repeating itself in this regard.

Although I found CHINA INC.'s organization a little loose and the material wandering occasionally, I heartily commend Mr. Fishman for pulling a wealth of information and analysis together to draw an appropriately alarming picture of a country we understand too little and ignore too often (just as we once did with Japan). CHINA, INC. is an excellent, fact-filled study of how China is playing the global economic game today, and it is right on target. This book deserves to be read by anyone trying to understand the world economy today, and it should be required reading for everyone in Congress and the White House.

19 of 22 people found the following review helpful

4.0 out of 5 stars A very good starting point but not perfect as a whole March 29, 2006

By Tolga BALCI

Format:Hardcover

Before reading this book I was wondering about how could China could manufacture everything from simple wooden materials to highly technological electronic parts. As the laws of economics state the product is a mixture of capital and labor. A small wooden backgammon set can be manufactured with a high input of labor and small amount of capital. But considering the mainboard of the computers, the capital must be intense to make the products. You can't just fit these tiny pieces of electronic parts in place just by people's hands.

Taking the perspective from the macroeconomic sense, countries are usually concentrated on "high capital" production [say rmany, United States, Japan] or "high labor" production [African countries]. Where can we put China in this perspective where they can do both?

With these in mind, I split the book in two parts: The first part gives us the unusual things that China did so far. Really astonishing figures for the reader in terms of population, economic forces and the like. I can say that this part is "what they did". The second part is more economy-based, a rather "how they did".

The book is an easy-to-read one. There are in-depth explanations, presentations but they are not mind-bending and you are not lost in the paragraphs. Perspectives of the Chinese and American workers, consumers, manufacturers are well analyzed and presented. "Pirate Nation" and "China Prices" are two of the most striking chapters in the book.

At the end, after finishing reading it I had many of my questions answered, but I am left with a couple of questions more: The book concentrates the impact mainly on United States and to some extent Germany. But there are other countries in the world who can/will be affected by the Chinese giant. I would better find some more pages onIndia, Malesia, Indonesia etc where there are also low production costs. Especially India deserved much more attention. The influence on the other nations could also be presented: Say what will be the picture look like for the Middle East/Western European/African countries? What will the situation be (both for China and the rest of the world) if China stops its anchor on the currency? What will the picture be when the forces of economy come into the scene; say more income to China will inevitably give a rise to the wages of the workers. In turn the production costs will increase. In the other parts of the world, the same laws will come into the scene in an opposite way: the wages will decrease, efficiency will increase and all will come to a balance. So, is China now a place which companies must take advantage of? In other words, is it a "hype" now? Why 99.9% of the examples are about a couple of brands but not more? For example, why brands like Jeep, Harley Davidson, GM, Volkswagen etc are examined but not brands like Honda, Toshiba, Sony, Dell, Ducati are not? In economic terms, why did not the author mention about the purchasing power parity; which is one of the major measures of an economy: at the very minimum, how many loaves of bread can I buy with 1 yuan?

I can give this book a fair of 4 stars, because it presents many of the facts clearly. I deducted one star because:

1. The book is lacking the points above. You may not have these questions at the end, but I did.

2. The author has some kind a negative prejudice against China. This is not obvious by the sentences, quotes or else, but by reading between the lines. OK, I can understand the author on this point because he is American and he is aggressive by the consequences of the Chinese workforce. Ok, He greatly stands in the midpoint and takes an objective point of view. But if I feel this negativity ...