been rather uncooperative, especially when using Gmail and other
Google services (like this blog).
Monday, May 19th
Photo: NEU students walk between piles of fabric at a slipper factory
outside of Nanjing.
Woo Monday! It looks like it's going to be another busy week with language
class, but we have one week down so I think we can do it!
Today was a pretty average day with classes. However, in the afternoon we
went to visit the Jiangsu Sainty, Runlong Trade Company Ltd where we met
Mr. Yong Zhang. I have a strong interest in international business and
especially how state-owned businesses are run in China after the
dissolution of many state controls after the country's opening in the
1980's and 90's, so having an opportunity to hear about exactly that from
Mr. Zhang, a manager at Sainty, was very enlightening.
I for one didn't realize that in the present day, the Chinese government
mainly acts only as a loan guarantor for state-owned companies and does not
exert much more influence than that. Getting business loans from Chinese
banks is apparently rather difficult, so having an entire country as your
guarantor means that these companies do not ever have issues getting loans,
giving them a significant advantage over non-state owned companies.
After speaking with Mr. Zhang at his office, he brought us over to one of
his factories to look around. This particular factory makes slippers. My
first impression was more or less as I expected: run-down, white washed
walls cracked and graying. We got an inside look at the way they turn the
designs clients provide into slippers, and they talked a lot about how
getting their supply chain together can be an issue because of the
spontaneity of orders. They put a lot of emphasis on price.
I felt a bit uncomfortable the entire time I was in the factory. Walking
around and looking at the (exclusively, except for the male manager) women
in the factory putting together these slippers, I understood in a way I
hadn't before that almost everything I own was made, in China, by human
beings in a situation similar to or worse than the people I was seeing.
I thought it was very interesting to hear from Mr. Zhang and Mr. Pu, the
factory manager, over and over again how little money they made from each
slipper, about $1.50 out of its ~$25 sale price. They used this small
profit margin as an excuse for not renovating the aging factory, as well as
to deflect any other criticisms of their business. They blamed American
companies for demanding ever-lower prices for their products, but I don't
really know if this is the real reason their profit margin keeps shrinking,
and I wasn't sure if I really buy this as an excuse.
I am conflicted about it. As China modernizes, much of the cheap
manufacturing that was profitable because of low labor prices is going to
lose profitability as median wage increases. I think that this is going to
be a larger and larger issue. Where are all of the people going to find
work? And does it make me a morally bad person to help feed the system that
prevents these people from making better wages, so that factory owners and
American companies can make greater profits at the cost of worse worker
conditions?
If the business isn't profitable enough to provide more comfortable working
conditions for its workers, then in my mind it shouldn't exist. However,
this factory is perhaps the only thing keeping the people in nearby
villages from moving into the city and to potentially even more hardship to
find jobs. I don't know if it's better for them to have a less desirable
job and keep their homes and families together or move to the city and have
a potentially higher-paying job but lose their home and family. All in all,
this trip left me with many more questions than answers; ones that I hope
to find some sort of answer to.
- Luther
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