Why China may be more vulnerable than we think
Though many have argued that China will inevitably rise to the status of world economic and manufacturing superpower, Perry Sainati, president and CEO of American joint manufacturer Belden Universal, begs to differ.
In a two-part series on Manufacturing.net, Sainati provides some solid arguments as to why China might not be as much of a threat to the U.S. manufacturing industry as once thought, and why China’s own manufacturing sector is becoming increasingly vulnerable.
The number one reason Sainati believes “China’s future as the biggest manufacturing dog on the block” is not definitive is because of what he calls “The Lead Paint Factor”; aka the fact that China consistently produces unsafe products:
“Chinese manufacturers have never had to operate with the kind of regulatory oversight faced by their American counterparts. ..If Chinese manufacturers want to cut corners and compromise safety in the pursuit of lower costs, let them. If they want to value profits over, say, kids’ lives, let them. But in the end they’ll pay.”
Another great point comes in the form of Sainati’s Reason #3: The rising Chinese middle class. Sainati explains that China’s middle class is growing—and that the middle class workers who expect wages and benefits comparable to those found in the U.S. have displaced the Chinese laborers of the past (who were willing to work long hours for little pay). He believes that this shift in the workforce will soon dull China's edge over competitors:
“As a manufacturing-based economy that values price over quality, how long do you think it will be before that dynamic starts eating away a the only significant edge China has over its global competitors -- namely, the low cost of its products?”
Sainati also lists six other reasons why he believes China’s future isn’t as bright as many make it out to be, including rising inflation, America’s highly competitive technology landscape, and the fact at some point, Chinese citizens will fight back against their overbearing government.
These are all excellent points that should be more widely incorporated into the discussion of China’s rising power, and the steps we must take to ensure that the U.S. manufacturing base remains competitive in the global economy.
Click here to read part 1 in the series.
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