The China Price

by Ralph Nader

"Meet the "China Price" or else." Remember that phrase -- "meet the China Price," because you'll be reading much more about what it means to this country, its working families and its communities.

U.S. chartered corporations are telling their suppliers that if they do not meet the "China Price", they can either lose business, cut their employees' wages and benefits further, or close down and open up their production facilities in China.

WalMart is a gigantic pressure cooker in the "meet the China Price" rat race or else. With a relentlessness comparable to its low-wage, union-busting practices, WalMart tells its suppliers to find ways to meet the "China Price" or pick up and move to China with its hardworking, non-union, 30 or 40 cents per hour workers.

The Wall St. Journal reported that the Big Three auto makers are outsourcing through their parts suppliers. A leading aluminum wheel manufacturer in Van Nuys, California -- Superior Industries International, Inc. -- was told bluntly by General Motors and Ford Motor Co. to match the prices they were getting from Chinese wheel suppliers. The message was clear -- if Superior did not comply, the two companies could buy from China or some company that did. So Superior is opening a joint-venture plant near Shanghai.

Superior's President, Steve Borick, was quite open about the situation: "We have to take the posture that we are going to continue to work with our major customers. . . .who keep pressing us to be in China." "All of this" the Journal declares "is contributing to the disappearance of U.S. jobs in the parts industry." "The China Price" is emptying out many factories even in Mexico that were set up by U.S. corporations a few years ago. Apparently, one dollar an hour is too much to pay for Mexican labor.

In the U.S. from 2000 to 2010 there will be a loss of 260,000 jobs from the auto parts industry alone, according to a Roland Berger study. Both the furniture industry and the textile industry have been losing large numbers of jobs as the "China Price" manufacturers have been collapsing companies in such states as North and South Carolina.

Consider the irony. Here are U.S. corporations -- pampered for years with lower taxes, de-regulation, and taxpayer subsidies of various kinds -- aggressively turning their backs on America and American workers in favor of production facilities inside a communist dictatorship. A self-described conservative, President George W. Bush is not only silent but is presiding over policies that favor such flight to China and other low-wage, authoritarian regimes.

By bringing these regimes into the World Trade Organization (backed by Clinton and Bush) and by Congress providing China with most-favored nation status, Uncle Sam's hands are quite tied. There is no more tying trade to human rights standards by the United States.

A few months ago, however, a U.S. government panel found that some Chinese furniture makers were "dumping" products into the U.S. at below cost. If upheld, this will presumably lead to tariff sanctions.

Generally, the accelerating impact of the "China Price" will hold wages down in this country or hollow out communities reliant on manufacturers and suppliers that have pulled up stakes and gone to China. The number of lost jobs will grow faster in the next decade.

Our government and both Parties (with few exceptions) are leaving our workers defenseless. You cannot have Free Trade with a dictatorship that controls labor and other prices. So we the people better start focusing fast on this exodus.