Economics and finance, Trade and industry, International relations, Law | Australia, Asia, The World

24 November 2021

Attitudes toward the ubiquitous ‘Made in China’ label link to larger stories about globalisation, Anthea Roberts and Nicolas Lamp write in their new book.

It’s happened hundreds of times: you’ve bought a new pair of headphones, a toy, or a piece of clothing, and you spot the ‘Made in China’ label. What feelings does this label conjure? What images spring to mind? Whatever your answers to those questions, the label itself has placed customers considering it in the middle of raging debates about the virtues and vices of globalisation.

One feeling might be gratitude, for being able to get fancy stuff at incredibly cheap prices. According to globalisation’s biggest fans, this is exactly right. Just imagine how much that power tool would have cost if it had been made in a factory next door.

But it’s not just the customer who benefits from the transaction: whoever made this new possession is probably better off working in a factory than tilling the fields or scavenging through garbage dumps. This, at least, has long been a dominant view of economic globalisation: everyone is better off for it.

However, reading the label might have another effect on the consumer. Perhaps it’s a reminder of local manufacturing towns that have declined as more and more industries have moved production overseas.

Wouldn’t it be worth paying a little more if it allowed a return to the ‘good old days’, when someone without a high school diploma could get a stable job with benefits and raise a family? Wouldn’t buying an item with a ‘Made in Australia’ label make you feel patriotic and proud? Certainly, former President Donald Trump, and many of the millions who voted for him, seemed to think so about ‘Made in America.’

More on this: Australia’s China supply chain ‘vulnerability’ – much ado about nothing?

Perhaps the label sparks an uneasy feeling. Under what conditions was this item produced? Was it made with forced labour in China’s Xinjiang region? Did the factory run-off pollute nearby rivers? Did the company locate its factory in China to avoid having to pay decent wages and comply with more stringent environmental laws somewhere else in the world?

Perhaps the product was made in an acceptable way. Still, the question remains whether easy access to cheap goods facilitated by globalisation truly makes everyone better off, or whether it simply fuels a reckless consumerism that, along with causing other problems, is driving global carbon emissions through the roof.

All these possible reactions link into larger narratives about economic globalisation that have been vying for dominance in recent years.

What once appeared to be a broad political consensus on the value of free markets and liberal trade among democracies has given way in the last decade to increasingly acrimonious debates about who ‘wins’ and who ‘loses’ from economic globalisation. All things ‘Made in China’ have been at the centre of those debates.

The potent symbolism of the slogan has not been lost on politicians on either side of the Pacific. Concerned about the optics of ballooning trade deficits with China, some leaders have tried to mollify the public by pointing out that ‘Made in China’ does not necessarily mean what it says.

Technocrats at international organisations banded together to create a database on ‘trade-in-value added’ which economists could use to show that many other countries contributed components to products carrying a ‘Made in China’ label.

Some corporations have also sought to affect this narrative by changing their own label. The back of Apple’s iPhone now reads ‘Designed by Apple in California. Assembled in China.’ The message is clear: while Chinese workers play an important role in assembling the phone, the really good jobs – in research, development, and design – remain in America.

More on this: How feasible is decoupling from China?

In China, political leaders branded the country’s signature industrial policy initiative ‘Made in China 2025’. After a backlash, the Chinese leadership abandoned the label, though not the policies, because it had become clear that what sounded positive in China was seen as a sinister quest for technological dominance.

This change in perception of the label is not without some foundation. Over recent decades, the label that had been synonymous with cheap knock-off goods gradually started to appear on products embodying cutting-edge technology. So cutting-edge, in fact, that democratic governments began worrying about the security implications of buying telecommunications equipment and other sensitive products from a country they perceive as a strategic rival.

This sense of vulnerability was heightened further in the early months of the COVID-19 pandemic, when public officials across the world found themselves scrambling to procure personal protective equipment and other essential products, the production of which had largely shifted to China and other developing countries. However fraught their relationship with products made in China had become – not having access to them during the crisis was worse.

France’s president and Germany’s chancellor both rued the day that the manufacturing of essential medical goods moved out of Europe, leaving their countries vulnerable to shortages when a pandemic hit.

Meanwhile, Canada’s vaccination strategy initially faltered when Chinese officials blocked exports of key ingredients, apparently in retaliation for Canada arresting a high-ranking Huawei executive. More recently, Australia too found out that China has few qualms about weaponising its trade relationships when things don’t go its way.

Against this backdrop, ambivalence about things ‘Made in China’ makes sense. Whether it’s the price, the nostalgia about a time when things were made closer to home, concern about labor conditions and environmental impacts, fears about security, or concerns about resilience, complicated feelings about products ‘Made in China’ are a reflection of competing stories about the trajectory of globalisation.

Anthea Roberts and Nicolas Lamp are co-authors of Six Faces of Globalization: Who Wins, Who Loses, and Why It Matters, available from Harvard University Press. The book was launched at The Australian National University in a virtual event on 16 November. It was listed as one of the Best Books of the Year (2021, Economics) by the Financial Times.

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