Made in China

Sun.Star Cebu - - OPINION - MEL LIBRE li­[email protected]­hoo.com

About a decade ago, when one men­tioned a “Made in China” prod­uct, there was neg­a­tive per­cep­tion among con­sumers. Prod­ucts man­u­fac­tured in China were la­belled as cheap and in­fe­rior, if not fake im­i­ta­tions of those made in the United States, Japan and South Korea. That is no longer true in this age and time.

Len­ovo, Huawei, Alibaba, Xiaomi and Haier are some of the most pow­er­ful brands that have come out of China in re­cent years. Len­ovo was rec­og­nized as the world’s largest per­sonal com­puter ven­dor by unit sales from 2013 to 2015.

Alibaba, founded by Jack Ma, is an over-achiever: the world’s largest re­tailer, one of the largest In­ter­net and AI com­pa­nies, one of the big­gest ven­ture cap­i­tal firms, one of the big­gest in­vest­ment cor­po­ra­tions in the world and re­mains as hav­ing the high­est ini­tial pub­lic of­fer­ing at $25 bil­lion.

Xiaomi is the world’s fourth-largest smart­phone man­u­fac­turer. Haier has the world’s largest mar­ket share in white goods, or do­mes­tic ap­pli­ance.

How did this hap­pen? Let us have a brief re­view of ear­lier eco­nomic mir­a­cles in Asia. From the rub­ble of World War II, Japan pa­tiently and per­sis­tently turned it­self into a First World coun­try be­cause of keiretsu, the term used to de­scribe the close bond among man­u­fac­tur­ers, sup­pli­ers, dis­trib­u­tors, and banks; shuntō or the an­nual wage ne­go­ti­a­tions con­ducted be­tween big busi­ness and trade unions; the sup­port­ive at­ti­tude of the gov­ern­ment; and shūshin koyō or life­time em­ploy­ment in pri­vate en­ter­prises. Kaizen or con­tin­u­ous im­prove­ment was a con­cept partly bor­rowed from the Amer­i­cans, and was closely as­so­ci­ated with The Toy­ota Way.

South Korea used to be a back­ward na­tion de­pen­dent pri­mar­ily in agri­cul­ture. The dic­ta­tor Park Chung Hee pro­moted in­dus­tri­al­iza­tion in the ‘60s tap­ping chae­bol, or strong fam­ily en­ter­prises, to de­velop new in­dus­tries with the gov­ern­ment and the bank­ing sec­tor as part­ners.

Deng Xiaop­ing sowed the seeds of China’s eco­nomic mir­a­cle when he adopted the mar­ket econ­omy in De­cem­ber 1978. By open­ing the Chi­nese mar­ket to for­eign in­vestors and re­form­ing state en­ter­prises, Deng may have set aside Mao’s “Lit­tle Red Book” to change the out­look of the cit­i­zenry. Lo­cal en­trepreneurs soon de­vel­oped into as­tute busi­ness peo­ple, who saw the po­ten­tial of the ris­ing mid­dle class in China and later pro­moted growth out­side of the bor­ders and into the world.

To­day, China ($14 tril­lion) is se­cond to the United States ($20.4 tril­lion) as the largest econ­omy in the world. Far third is Japan at $5.1 tril­lion.

The US must be feel­ing the heat, though, as shown by the hos­tile at­ti­tude of Pres­i­dent Don­ald Trump to the Chi­nese lead­er­ship and, just this week, the ar­rest of Meng Wanzhou, Huawei’s chief fi­nan­cial of­fi­cer and daugh­ter of the founder. She was ar­rested in Canada and will be ex­tra­dited to the US on charges of try­ing to evade US trade sanc­tions with Iran.

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