Poorly Made in China
– Paul Midler, Jan 2011
The author goes through stories of North American traders and their dealings with Chinese factory owners. While his trials and tribulations are interesting, some of his overall observations are enlightening.
Quality cannot always be guaranteed
A store will set out specifications for a product, but if the factory makes minor or even major changes the product is already being shipped and no modifications can be done. Quality cannot be checked because on most products it is too expensive for the manufacturer or importer. The responsibility and cost then lies with the retailer, which by then is too late.
-savings: a single minded pursuit for savings can compromize quality
-factory causes the quality problem, wants the agent to pay to fix it
-quality fade over time: substitute of inputs, slowly over time, so no one notices, until they do
-counterfeit is part of culture
-short-term vs long-term thinking: take small steps forward, then reassess, vs thinking long-term
Trade Theory: China’s Two worlds of IP and non-IP
An interesting trade theory is presented in the last chapter of the book. The author says that China trades within two worlds: the IP regulated world of the First World, and the non-IP world of everyone else. This includes South America, Africa and most of Asia. The IP world is much smaller than the non-IP world.
What’s Wrong With China
– Paul Midler, Nov 2017
wo shangle zeichuan
-optimize profits, economically optimal point -> morally agnostic
-low trust culture > social weakness, chaos > totalitarian rule
-intermediaries
-support both sides more beneficial
-symbols of modernization
-exceptionalism / collective narcissizm: China is smartest, superior in methods and practices
-one-on-one relationships, not what they did in the past
-no tradition of philanthropy, suspicious of aid
-flexible partnerships, evaluate along the way
-paochia system of shared responsibility
-autonomous, self-regulating systems
-informalizm: flexible but uncoordinated: less written down, more people oriented, but quite a lot of coverup for informalizm errors
-rule of man, not rule of law: loose rules -> flexibility
-severe penalty, lax enforcement
-social harmony: partial blame to both parties, less loss of face
-quick penalties even for minor offences
-witness accounts mistrusted -> biased
-rely on confessions -. torture
-cycles of wealth
-wealthy factories have less to worry about, go supernova
-nibbling as a negotiating tactic
-cat’s paw approach: getting others to intercede
-reach tech goals before the cycle collapses, then bask in the history of accomplishment
Addendum 2018 Apr 03
A recent book published by Paul Midler entitled “What’s wrong with China?” suggests that in the deep national psyche of the Chinese, everyone including the rulers “have internalized the dynastic cycle” and have “no faith in the permanence of their political arrangements.”…
According to the book, from this mindset towards political authority stem several noticeable traits including; “the passion to get while the getting is good, the gambling instinct, and the leaders’ determination to put off the inevitable day of dissolution as long as possible.” As discussed above, the recent proposal to enthrone Xi does seem to echo that last point, and it may be that there is a kind of moribund resignation shared among China’s leadership about the potential future straits of the party’s governance. source