The Blame on China

I knew that I would write this post only a few minutes into watching the documentary "Death by China" on Netflix. I wasn't entirely shocked to know that Americans blame the outsourcing of production by U.S multinationals to China on the fact that China is not playing fair, but I was surprised to see that no one seemed to be open to viewing the situation from the Chinese perspective, after all, China's responsibility is not to the citizens of the United States.

During the Clinton administration, President Bill Clinton was more than happy to welcome China into the World Trade Organization. As far as most Americans at the time were concerned, the deal was going to be as good as it gets. Americans would get to export to China at lower tariffs, more jobs would be created in the U.S, U.S trade deficit will be reduced and so on. Well, it didn't quite turn out as the Americans expected. Looking back, it is a bit shocking to see how much the United States underestimated the Chinese as it seems as though China was not expected to actually benefit from the deal, or at least not benefit as much as the U.S.  The cherry on top of the whole agreement for the United States is that they would influence China and force it to embrace the democratic system of governance. It was meant to be a jolly ride. $318.7 billion US trade deficit with China later, it is clear that China is not the dummy the U.S assumed it was.

With their abundant human capital and cheap labour, production by U.S companies moved to China leaving U.S citizens jobless. As far as some Americans are concerned, China is to be blamed because of the inhumane conditions it allows its workers to be subjected to - mostly to do with the factory conditions and low pay. What they fail to take into account is that although the work conditions are awful by U.S standards, in a country of 1 billion where things haven't always been good, those conditions, specifically in relation to low pay and lack of amenities U.S citizens are used to, might not be perceived as awful by Chinese workers but rather seen as an opportunity to make sufficient money to lift them out of poverty. That aside, if it were the case that things went as planned and America managed to benefit as much as they anticipated from having China join the WTO, Americans would probably not be so worried about China's labour law. If those U.S companies that saw a chance to produce at lower cost and decided to move manufacturing to China are forced to leave China, there are other countries where manufacturing can be done just as cheaply such as Indonesia or India. Moreover, no one seems to be bothered by the fact that the higher profits U.S companies make from using cheap Chinese labour benefits the U.S.

Based on the accusation that China's currency is being intentionally devalued to boost their exports, the U.S has asked China for a long time to revalue its currency. Maybe that will boost U.S export to China and reduce imports. That is left to be seen.

In my opinion, if during the welcoming of China into the World Trade Organization, the U.S was not so busy thinking about all they were bound to gain from the agreement, and if the U.S. was not so busy trying to influence China politically, some of the ways China would have benefitted from the deal at the expense of U.S citizens would have been anticipated.

It goes without saying that America needs to find other solutions to its problems that does not involve sitting on their hands and asking China to adjust its own policies.