Wandering China

An East/West pulse of China's fourth rise from down under.

#China Bashing Bears Fruit: Apple Moves Bring Manufacturing Home [Huffington Post]

Navarro and Autry: ‘You just can’t stay in a deal where only one side is required to follow rules or behave in a civilized manner. It is time for Washington to take off the gloves and fight for American jobs like the 700,000 other ones Apple has left in China.’

In open support of the encirclement and containment of China, alluded when Syria, Iran, and North Korea are propped up in the conversation. This to me, interestingly suggests that the logic of domestic protectionism over global production networks is good business for a global marketplace of cyclical consumption and planned obsolescence.

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China Bashing Bears Fruit: Apple Moves Bring Manufacturing Home
by Greg Autry
Source – Huffington Post, published July 7, 2012

Navarro and Autry in a global call to action against China: looking back when Apple was made in the US.

Navarro and Autry in a global call to action against China: looking back when Apple was made in the US.

2012-12-07-MacUSA-thumb
I’m going to take a little (very little) victory lap here. Several times in this space, I’ve suggested that Apple needs to move manufacturing back home. Each time I’ve gotten comments like “that’s not going to happen” or “they will just move to Vietnam or the next cheapest labor market.” However, Apple CEO Tim Cook announced on Thursday that he is going to manufacture a line of Macintosh computers in the U.S. Firstly, good work Tim, and thanks for finally listening to the vocal minority of us who have been complaining about this situation for years.

I still have my first Macintosh, with its anemic 128k of RAM. When that plucky little beige beastie greeted the public it was assembled at a state-of-the-art plant in Fremont, Calif. Yes, that California, the one with the high taxes, tough labor laws and the environmental crazies. To be fair, Apple moved Mac production out of the state within a couple of years and out of the country not long after. Apple production was done in various places including Cork, Ireland, before finally settling in China about a decade ago.

Now, the specifics of the Apple plan were light and the statement that the capital investment will be a mere $100 million suggests this first foray back into American manufacturing won’t be a big deal for a firm that keeps about 1,000 times that in the bank. However, that is a fine start. Frankly, re-shoring can’t happen over night, because America’s manufacturing infrastructure and workforce will need years to recover. When I interviewed executives at Foxconn City a couple years ago, they told me they didn’t think most of what they built in Shenzhen could be built in the U.S. at all. The fact is, that many segments of the electronic product assembly supply chain and production engineers experienced with the latest hardware are hard to find in the U.S. Read the rest of this entry »

Filed under: Beijing Consensus, Charm Offensive, Chinese Model, Communications, Culture, Domestic Growth, Economics, Education, Finance, Foxconn Suicides 2010, Government & Policy, Human Rights, Influence, Intellectual Property, International Relations, Media, Migrant Workers, Politics, Population, Soft Power, Strategy, Technology, The Chinese Identity, The construction of Chinese and Non-Chinese identities, Trade, U.S., , , , , , , , , , ,

Foxconn Plant Closed After Riot, Company Says [New York Times]

Taiyuan,  Shaanxi province: On the back of a string of suicides beginning in 2010 that gave the Taiwanese-owned Foxconn (one of the largest employers of Chinese with more than 1.1 million of them on payroll) its public image and internal practices a beating, just as the iPhone 5 is launched. An unfortunate convergence of economic imperative and global production networks perhaps, as the free market demands a product that is priced right for a competitive worldwide market. In China it is the displaced migrant worker who facilitates SIRI being a part of affluent networked societies. There are 79,000 workers in the Taiyuan plant. After 2,000 workers rioted, state media reported 5,000 police were despatched to restore order.

Foxconn cited police as saying 40 people were taken to hospital and a number were arrested, while the state-run Xinhua news agency added that three people were in serious condition.

Source – 5,000 police sent to quell mass Foxconn brawl (ABC News Australia, September 25, 2012)

Authorities in the northern city of Taiyuan sent 5,000 police to restore order after what the plant’s Taiwanese owners Foxconn Technology Group said was a personal dispute in a dormitory that erupted into a mass brawl.

Foxconn China plant closed after 2,000 riot (Reuters, September 12, 2012)

When a major new product such as the iPhone 5 is heading to stores, even more stress is put on that fast-growing manufacturing chain. Apple sold 5 million iPhones over the weekend (up from 4 million for the first weekend of sales for the iPhone 4S), and could sell 10 times that amount by the end of the quarter that closes December 31. Meeting that demand has required an epic buildup of materials, infrastructure, and labor, all while satisfying Wall Street’s need for bigger, more historic profits.

Riots, suicides, and other issues in Foxconn’s iPhone factories (CNet, September 25, 2012)

An English-language domestic report from Xinhua is also available here
40 Injured in Foxconn Brawl by NewsLook

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Foxconn Plant Closed After Riot, Company Says
By David Barboza and Keith Bradsher
Source – New York Times, published September 24, 2012

Workers cleaned up glass from the broken windows of a security room at an entrance of the Foxconn Technology plant in Taiyuan on Monday.
Source – New York Times, 2012.

SHANGHAI — Foxconn Technology, a major supplier to some of the world’s electronics giants, including Apple, said it had closed one of its large Chinese plants Monday after the police were called in to break up a fight among factory employees.

A spokesman said some people had been hurt and detained by the police after the disturbance escalated into a riot involving more than 1,000 workers late Sunday.

The company said the incident was confined to an employee dormitory and “no production facilities or equipment have been affected.” It said the cause of the disturbance was still under investigation. Read the rest of this entry »

Filed under: Beijing Consensus, Charm Offensive, Chinese Model, Domestic Growth, Economics, Foxconn Suicides 2010, Greater China, Human Rights, Mapping Feelings, Media, Migrant Workers, Migration (Internal), Modernisation, People, Poverty, Social, Taiwan, Technology, The Chinese Identity, The construction of Chinese and Non-Chinese identities, Trade, U.S., , , , , , , , ,

Foxconn workers get Taiwan vacation [China Post]

Foxconn: is the major supplier for Apple Inc. making amends or could it be public relations choreography? 216 Outstanding Foxconn workers get all-expenses paid (with vacation pay) seven-day trip to Taiwan. This comes as Hon Hai, its parent company posted ‘NT$789.94 billion (US$26.8 billion) in unconsolidated sales, up 42.59 percent from a year earlier’ (Taipei Times, April 23, 2012).

An incentive tourism group of Chinese workers from Foxconn arrive at the Taiwan Taoyuan International Airport, yesterday. Source - CNA

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Foxconn workers get Taiwan vacation Source –  China Post, published April 23, 2012

TAIPEI–A group of Chinese workers from Foxconn Technology Group arrived at Taiwan Taoyuan International Airport Sunday for a seven-day tour of the country, courtesy of their employer.

The 216 Foxconn employees from 17 provinces and 21 factories in China are scheduled to visit many popular tourist sites, including Taipei’s Shilin Night Market, Taipei 101, the National Palace Museum, the scenic Sun Moon Lake and Alishan in central Taiwan, and Kaohsiung’s Lioho night market.

Many of the employees expressed excitement upon arrival on their first visit to Taiwan, and thanked the company for providing such a wonderful opportunity to experience the country’s culture. Read the rest of this entry »

Filed under: Chinese Model, Domestic Growth, Economics, Foxconn Suicides 2010, Human Rights, Migrant Workers, Trade

Red, Delicious, and Rotten: How Apple conquered China and learned to think like the Communist Party. [Foreign Policy Magazine]

From righteous upstart to luxury item where the Chinese want to show off their ‘Apple Identity’. Christina Larson from Foreig Policy magazine reveals some interesting statistics in this revealing article.

‘…Today an iPhone 4 16GB sells for 5,000 yuan, or about $775. Of course, that’s still an extraordinary sum in China. By comparison, a simple Lenovo or Nokia phone typically runs less than $100 in China. This in a country where the per capita income in 2010 was just $4,260, according to the World Bank. An iPhone, let alone an iPad or MacBook, is no casual purchase.’

Also of particular note – are the allusions to the sacrifices fellow migrant worker Chinese have to make to produce these goods for more affluent Chinese, and reported many times, at the expense of health and life.

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Red, Delicious, and Rotten
How Apple conquered China and learned to think like the Communist Party.
BY CHRISTINA LARSON
Source – Foreign Policy, AUGUST 1, 2011

Photo – Foreign Policy Magazine Online

A friend in Beijing recently told me a story about the time a China Telecom technician came over to install the Internet connection for her Apple laptop. The man, an experienced worker, puzzled over the slim, silver device. He picked it up gingerly, holding it away from his body as one might inspect a suspicious package. After a few minutes, he set to work, but then grew frustrated when he couldn’t find the familiar pull-down menus to configure the connection.

That was just three years ago. Today, it’s highly unlikely that any Chinese technician would be similarly flummoxed. Since the first Apple Store opened in Beijing on July 19, 2008, the company has made astonishingly rapid inroads into the Chinese public’s pocketbooks and imagination. In any high-end coffee shop like Starbucks or Costa Coffee in central Beijing or Shanghai, the ratio of Apple devices (iPhone, iPad, MacBook, etc.) to non-Apple devices is often more than 1-to-1.

Apple now has four flagship stores in China — two in Beijing, two in Shanghai — and plans to open an additional store in Shanghai and its first Hong Kong location within a year. There are also hundreds of licensed Apple resellers in major Chinese cities, as well as many more unlicensed venders (including the elaborate fake “Apple Store” in Kunming unmasked two weeks ago by an American blogger). And these stores are packed with customers: As the company’s chief operating officer, Timothy Cook, revealed on a recent earnings call with reporters, “Our four stores in China [are], on average, our highest traffic and our highest revenue stores in the world.” Each attracts as many as 40,000 people daily (to accommodate crowds, Apple’s stores in China are designed to be much larger than in the United States). From 2010 to 2011, revenue in greater China has ballooned 600 percent, totaling $8.8 billion for the first three quarters of fiscal year 2011. Read the rest of this entry »

Filed under: Beijing Consensus, Domestic Growth, Economics, Foreign Policy Magazine, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Human Rights, Media, Resources, Technology, The Chinese Identity, The construction of Chinese and Non-Chinese identities

Tree orders up, profits down in China [Straits Times]

A sign of things to come – China as the world factory may not be able to keep its prices down for much longer. With the cost of labour in Shenzhen increasing by up to 30 per cent this year in response to the widespread protests for higher pay this year, ‘The Chinese clearly did not foresee the leap in wages and raw material prices that would eat into their profits, even when they had raised prices by 10 per cent this year. Mr Liao said that although he received 30 per cent more orders this year, his margin was wiped out by the 15 per cent rise in his 200 workers’ wages. ‘

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Tree orders up, profits down in China
By Lee Choo Kiong
Source – Straits Times, published December 19, 2010

Orders for artificial Christmas trees have picked up after the financial crisis, but their Chinese makers are not cheering.

To them, Christmas is blue this year as a stronger yuan and rising costs ravage their profits and threaten to shut them down.

The impact has been felt by over 200 factories in Shenzhen city, a key production base for the pine in southern Guangdong province, even though orders from Europe and the United States have spiked. Read the rest of this entry »

Filed under: Domestic Growth, Economics, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Human Rights, Lifestyle, Population, Social, Straits Times

Chinese iPhone workers poisoned by chemical: ABC [The Age]

The sooner people start to realize that this is not an insular Chinese problem but one intertwined by the wider society’s consumerist desires for cheaper and better, the better off we will be. Someone is doing something somewhere to get better margins and more profit out of the world’s factory. It is not a simple case of human rights abuse. More updates to come.

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Chinese iPhone workers poisoned by chemical: ABC
Source – The Age, published October 26, 2010 – 4:21PM

Workers who say they were assembling Apple computers and iPhones in southern China have spent months in hospital after being exposed to a harmful chemical, the ABC has reported.

ABC journalist Stephen McDonell said he gained access to the Number Five People’s Hospital in Suzhou where he spoke to a group of women who said they were left unable to walk after being exposed to n-hexane.

“At first the symptoms were pretty obvious,” one woman said of her reaction to breathing in the chemical, which was used to clean and stick logos on products. “My hands were numb. I could hardly walk or run,” she added. Read the rest of this entry »

Filed under: Australia, Chinese Model, Culture, Domestic Growth, Economics, Environment, Foxconn Suicides 2010, Health, Human Rights, Migrant Workers, Population, Social

iPhone maker faces new criticism over China labour practices [The Age]

Market research firm iSuppli estimates that a 4G iPhone costs $US6.54 to make in China, or just around 1.1 per cent of its retail price, while Apple’s profits margins hover above 60 per cent. It is no wonder that labour practices are as such – it is not just a Chinese problem, it is a problem of those who develop, and those who consume these products. In the grander scheme of things, as we want things cheaper, better and faster, something has got to give. It is too easy to push the blame on the obvious targets. 60% profit margins?

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iPhone maker faces new criticism over China labour practices
Reuters
Source – The Age, published October 13, 2010

Terry Gou, founder of Taiwan's Hon Hai Precision Industry company, the mother company of Foxconn, gestures during a shareholder conference in Tucheng, Taipei county, June 8, 2010. Photo: Reuters

Hon Hai, maker of Apple’s iPhone, faces new allegations of worker abuse at its sprawling China plants in two reports that claim conditions have not improved despite company promises after a rash of suicides.

One report, based on interviews with over 1700 workers by 20 universities in Hong Kong, China and Taiwan, criticised Hon Hai for long working hours, a “militaristic” work culture and mass employment of low-wage vocational college students and interns on production lines to cut costs.

Hon Hai and its Hong Kong based Foxconn unit, which make iPhones and iPads for Apple and goods for Dell and Hewlett-Packard among others, dismissed the report’s “unsubstantiated allegations” and said it treated and paid its workers well. Read the rest of this entry »

Filed under: 52 Unacceptable Practices, Culture, Domestic Growth, Economics, Education, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Influence, International Relations, People, Politics, Population, Social, Technology, Trade

Chinese university students investigate life on the factory floor [China Labour Bulletin]

The great thing about Hong Kong is, despite being under Chinese rule again, it has bandwidth to maintain its press freedoms. This is worth a read if you are interested in an investigation into life in China’s factory floors, and not the fleeting press reports that only cover the marco details. It raises questions on the interconnectedness of the global production networks, and a strong look at the Chinese psyche – have they softened? After all, their parents would have survived far worse – the Civil War, the Cultural Revolution and the Great Leap Forward combined.

“…The shift was 12 hours long nearly every day. Once you started, you hardly dared to think about the drudgery, but after you got into it, you found that you simply did not have time to let your mind wander. You were a machine. You just worked, and your brain did not need to be engaged at all, you just needed to carry out the same action repeatedly. That was all that was required.”

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Chinese university students investigate life on the factory floor
Source – China Labour Bulletin, published July 21, 2010

Chinese university students investigate life on the factory floor
During this year’s summer break, three students went “undercover” as migrant workers at a small shoe factory in Dongguan’s Houjie township. Their report, widely circulated in various forms on the Internet in China, details the pay and conditions of employees, the attitude of migrant workers towards employer abuses and their awareness of the law. It shows how the students tried to “raise the consciousness” of the young migrant workers at the factory and their frustration at their lack of success. The report also looks at the conditions at larger factories in the Pearl River Delta that pay more but also demand more from workers, and discusses the options available now to the younger generation of migrant workers, compared with their parents.

The essay reveals as much about the attitudes and values of young socially concerned urban intellectuals as it does about the subjects of their report, and as such provides insights into the 90s generation at either end of the social scale.

China Labour Bulletin has translated and edited Random Thoughts on Factory Life below. The original Chinese language report can be read here. Read the rest of this entry »

Filed under: 52 Unacceptable Practices, China Labour Bulletin, Chinese Model, Culture, Domestic Growth, Economics, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Human Rights, Influence, International Relations, Media, Population, Social, The Chinese Identity, Trade

Foxconn to hire more workers in China [BBC]

‘The new hirings will boost Foxconn’s workforce in China to 1.3 million.’

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Foxconn to hire more workers in China
By Cindy Sui
Source – BBC News, Taipei, published August 20, 2010

Foxconn, the Taiwanese electronics manufacturer and maker of the Apple iPhone, iPod and iPad, says it plans to hire up to 400,000 workers in the next 12 months.

The move follows a spate of suicides at its factories in China.

Officials said it would enable the company to cut employees’ overtime while maintaining production. Read the rest of this entry »

Filed under: BBC, Chinese Model, Domestic Growth, Economics, Environment, Foxconn Suicides 2010, Human Rights, International Relations, Media, Population, Social, Taiwan, Technology, U.S.

‘Made in China’ – but for how long? [China Daily]

An introspective piece that draws all the dots on China’s already present challenges (wages, Foxconn Suicides, the automotive strikes, et al) in staying as the world’s factory. Definitely worth a read as it sums up the significant events in the past year, plus the Chinese shift away from mere manufacturing to more all value activities. Is China’s global role as the most powerful mass producer over in just under twenty years?

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‘Made in China’ – but for how long?
Source – China Daily, published July 19, 2010

Editor’s Note:

The Chinese horn, or vuvuzela, buzzed throughout the World Cup, which ended a week ago, bringing resounding success to Chinese manufacturers and showing the overwhelming ‘Made in China’ power to the world.

Photo: China Daily

For the past decade and more, China has been the manufacturing workshop of the world. But rising labor costs may cast a shadow on the future of the ‘Made in China’ strategy.

‘Made in China’ faces vague future

Foreign investors considering relocating production

Strikes at Honda have also aroused concerns among foreign investors about labor unrest in China.

Two large US companies, Ann Taylor Stores, the women’s clothing retailer, and Coach, the luxury handbag maker, are poised to relocate production to countries, where labor rates are cheaper.

Mike Devine, chief financial officer of New York-headquartered Coach, which makes luxury hand bags, said at a conference recently a move was in the pipeline. Read the rest of this entry »

Filed under: Automotive, Beijing Consensus, Charm Offensive, China Daily, Chinese Model, Culture, Domestic Growth, Economics, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Influence, International Relations, Politics, Social, Soft Power, Trade, U.S.

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