Thursday, April 10, 2008

FC Blog: The Upside of No Cheap Chinese

Crossposted from my Fast Company blog:

Recently, articles in both the New York Times and Slate have warned that American stores may no longer be so awash in supercheap Asian imports. Not only is the dollar weakening, but inflation and economic growth in countries like China and Vietnam are inexorably raising the costs of doing business. And there are few obvious backup countries ready to step into the wings as cheap manufacturing powerhouses.

We're dealing with complex global economic factors here, but I wanted to point out the potentially positive side to this shift from both human rights and environmental perspectives. The first is stated directly in Alexandra Harney's article:

"China is rolling out wage increases around the country and tightening its labor laws. Wages are rising at double-digit rates in coastal China...China's Generation Y, the children born after the one-child policy came into effect, are increasingly aware of their rights to a legal wage, health insurance, and a certain number of days off every month."

Now, I shop at Forever 21, H&M and Tar-zhay just like everyone else. But it's a pretty heartless person who would grudge their tanktops going up from $5 to $12, if the tradeoff was better working conditions for the poor in developing countries.

The possible environmental benefits here are more conjectural. Critics of globalization have devoted much scholarly ink to the outsized environmental costs of export-oriented agriculture and manufacture. Increasing volumes of raw materials and finished products are crossing the globe, with bigger and bigger CO2 trails following them in the form of airplane, ship, train, and truck fuel, not to mention the environmental impact of all those highways, roads, ports, canals, locks, bridges, and airports (see this story about the new China-financed Asian superhighway linking Cambodia, China, Laos, Myanmar, Thailand, and Vietnam.)

Global trade made economic sense despite the distance because of extremely cheap labor and extremely cheap fuel. Now that the costs are rising, just maybe, the advantages of re-localized, sustainable supply chains have a chance to come to the fore.

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