Unit 1: Lesson 6

The globalization of China, as we have read in the works of Gittings and Shirk, has been a long and arduous process. But once the economic 'doors were opened' through Deng's economic reform, the Chinese economy has boomed, "having set a world record of 10% annual growth for more than two decades". (Shirk p 131)

But too much growth too quickly in a global market doesn't come without a price for someone as found in the article "China's Inflation Hits American Price Tags".

As the article states, "China latest export is inflation". Of the major Chinese imports to America (80% of toys, 85% of footwear, and 40% of clothing) cost have risen over the past eight months. Ironically this coincides closely to discovery of tainted dog food, toys, and other items. Could this be the price of quality control?

Americans could experience as much as a 10% increase on popular imports. "In the long term, higher costs in China could spell the end of an ear of ultra-cheap goods, as well as the beginning of China's rise from the lowest rungs of global manufacturing", the article states.

The question China faces is whether foreign consumers will pay the higher prices or look to other markets. Chinese factory owner are even looking to relocate to other areas to help reduce cost.

My husband's company imports office furniture from China. Due to increases in prices, quality issues, and the working conditions of the factories, they have already begun to look to Thailand as an alternative resource. There they have found improved working conditions over the Chinese factories.

Beijing still controls the future of China. In recent months they have changed tax rebates, imposed new labor laws and enforced environmental regulations. Could this be in response to the fact they are hosting the Olympics this year and feel a need to put on a "good face" for the world?

Again it appears that China is walking a fine line between success and failure on the global stage.