Dark side of China’s manufacturing prowess
Last year, foreign direct investment (FDI) into China rose to nearly $106 billion, reaching a new peak in a trend that has accelerated with globalization and China’s entrance to the World Trade Organization.
Such strong inflows of investment have supported an annual economic growth of 9.2 percent – formidable when one considers what the rest of the global economy is going through.
Many would point toward “cheap labor” as the key attraction here, but a Jan. 21 New York Times story by Charles Duhigg and Keith Bradsher shows there’s much more to it than meets the eye.
The report focuses on Apple’s contractors in China and how they cope with “impossible” demands from the management and breathtaking production volumes. Almost all of the 70 million iPhones, 30 million iPads and 59 million other Apple products that were sold last year were manufactured in non-U.S. plants and through a chain of mostly Chinese contractors. These contractors employ around 700,000 workers, the story says.
This long quote should show it’s not just about cheap labor but flexibility to the level of inhumane:
“One former [Apple] executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight. A foreman immediately roused 8,000 workers inside the company’s dormitories [...] Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift, fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.”
Of course, to produce at such dizzying rapidness, the worker must work and act like a slave: Live in company premises under terrible conditions, not knowing when you’ll be called to the assembly line, work for long shifts and receive pay that’s a tiny fraction of what an iPhone sells for in the market.
That’s why the late Steve Jobs declared these manufacturing jobs “will not come home” – at least not before the American worker accepts similar conditions!
And there’s no better symbol of those conditions than “Foxconn City” in Shenzen. This complex, which assembles our iPhones, among other gadgets, has 230,000 employees. Over a quarter of the workforce lives in company barracks, and many workers earn less than $17 per day.
“When one Apple executive arrived during a shift change, his car was stuck in a river of employees streaming past,” the NY Times says. “Foxconn employs nearly 300 guards to direct foot traffic so workers are not crushed in doorway bottlenecks.”
Of course, there’s the seemingly endless “engineer supply,” too: Apple analysts forecast that finding and bringing together 8,700 industrial engineers to oversee 200,000 workers would take “as long as nine months” in the U.S. But in China, it took only 15 days to do this.
It’s ironic that to produce the latest-technology gadgets at the speed that we so require, hundreds of thousands should be willing to work under terrible conditions. I’d say the solution to this irony will also determine the future of China, the “red dragon” of today’s global economy.