World Changing #2

Lauren Korany

In the chapter “Understanding Trade”, Abrams addresses the role of China in our global market. China is rapidly becoming the “world’s factory” (pg 41). We have seen the same argument in Collapse, as it is a very relevant one. China creates 13? Of the global economic output, its economy is twice that of Japan’s, and Wal-Mart imports most of its inventory (70%) from China. Let’s think about Wal-Mart’s slogan, “rolling back prices”… there is a reason why the goods the company sells are so cheap. It is obvious to most of us that it is directly tied to the country of exporting goods. However, there are two specific reasons of why the goods are so cheap. The first deals with currency valuation (pg 42). China’s Yuan has been “floating” and was not at a fixed rate equivalent to the U.S. dollar or the Euro. The price of buying and making goods was inexpensive. The second reason is labor costs, one that we are more familiar with hearing. The labor costs are considered extremely low on U.S. terms. In the U.S., labor jobs receive hundreds of dollars per month, but this is not the case for Chinese workers. The other issue is the unregulated working conditions. Certain groups are not allowed to work in the city, such as rural inhabitants. So in order to work, they do it under illegal supervision and are paid as cheaply as possible. They do not complain because they technically would have no job if it weren’t for the illegal factories.

The low prices China give the world sacrifices the environment. China is a large contributor to sweatshop labor. An example of sweatshop-free sourcing is from Lesotho. The export garments to the U.S. retailers such as Levi Strauss and GAP. The country was able to improve its environment during this working change. Yet, as China becomes more prominent in the international garment market, it is expected that their contribution will swell from 20% to 40% (pg 44). Countries will buy from China because they will remain cheaper. Issues will arise with the condition that the production places on the environment. It is a frightening issue, and we must come to solutions quickly before we cannot step back from the market when it gets out of control.