Time to separate the pretenders from the contenders, and see who has, in fact, been checking the blog every 2 or 3 days as instructed by the syllabus and FAQ document. Thus far only a small number of students planning on going to China have submitted posts and/or comments, and I am not thrilled by the signal that sends. To again reiterate — I won’t award 4 units of graduate school credit and/or a decent grade attached to it those who just go through the motions.
Assignment, Due Wednesday, November 21, by 5:00 pm:
A number of good, thoughtful and insightful posts and comments have been submitted thus far. Nice job to those who have jumped in.
But in reading through some of the comments, it is apparent that some foundational understandings about economics, capital flows and trade, finance and globalization are missing. If you were Masters in Philosophy or Masters in Viticulture students, I would not be terribly concerned. But because you are MBA and MS in IT students, I am concerned. You must understand how this works and its complexities, to hold the credible title of MBA or MS in IT.
For example, China’s economy has been growing at a hefty pace for a number of years now. No reasonable person disputes that. Further, when China’s economy grows, that too, is good for the US and our own overall economy, as the two have become inextricably interlinked. Again, no reasonable person disputes that. Finally, no reasonable person doubts that one reason China’s economy has and is growing so fast is because of its lax standards, rules and particularly its poor enforcement re: things like IP protection, the environment, coal mine safety, labor and employee protections, etc., as without said constraints the cost of doing business in China, for foreign and Chinese firms, would be higher.
So, if we ask China to raise the bar on a number of these fronts and thereby slow down their economic growth, won’t that in turn hurt us and our own overall economy in a number of ways?
(My hypothesis is that “raise the bar” will be the majority consensus of the group, and nothing wrong with that; but I am asking you to think about this at a deeper level than the usual American throwout of, “well, those Chinese need to treat people better and pass more laws and all will be well” offered as the business and political solution. If it were that simple, heck, wouldn’t that have been done some time ago?)
If we slow down their growth are you in turn willing and ready to step up and pay higher prices for goods, pay a higher interest rate on the mortgage you take out when you buy a house (a mere 1 percent up-tick in your loan rate makes a HUGE difference on what you pay for a house in California over the life of a 15 or 30 year loan; and if you are making a California mortgage payment, like me, you know all too well the pain of which I speak), are you willing to have a harder time getting access to affordable capital so you can start or grow your business, etc.?
Relatedly, you are taking statistics right now and are learning what is good data, how to gather it, how to interpret it, etc., so are things like the lead paint toy reports and antifreeze in the toothpaste cases reported by the press outliers, or, do they represent the statistical mean? How many other products does China import into the US other than toys and toothpaste category and any problems with those?
Which economic poison do you pick, and why? And if this bothers you, either way, can it be fixed and if so, how? What is politically possible? Should Americans lose out more than Chinese on this, or vice versa, and why? Discuss.
Turn in your assignment/thoughts/response by the above noted deadline, via your comment below. It should take you no more than 10 or 15 minutes, max, to think about this issue and type something up. Amount of points for this assignment to be determined later. Your initial comment and any subsequent comments you make to/in this particular post does not count as one of your required quarterly blog posts.
Later in the day Prof. Carr Addendeum:
And below are three China Law Blog posts that adds some background to the above that you might find helpful as you wrestle with this issue. The info in these links suggest that the belief that that China is not trying to move forward on these issues my be more urban legend and reality. Maybe these developments show that China is on a normal progression to solving these problems that’s in line with how other countries have economically developed over the past few centuries? See, e.g., this related A Nation of Outlaws. Uuuuuhh, Beavis …That Would Be You and Me post I wrote some time ago, and this is why to understand many of these issues, Dr. Morris is right, you have to know and understand something about the history of our own country and the world:
Lots of talk and speculation above re lead paint in toys coming from China, poison in food, etc.
This article in the NZ Herald highlights why I always beat on people to “show me the data” and not repeat what Lou Dobbs said on CNN or Bill O’Reilly on Fox.
China Not To Blame For Most Toy Recalls
The article discusses a study (data!!) just out by Paul Beamish, professor at the Richard Ivey School of Business in London, Ontario, and Hari Bapuji and Andre Laplume with the Asper School of Business in Winnipeg, Manitoba, that found that toys made in countries other than China had a higher rate of recalls on a proportional basis. In other words, toys made in China are “no more a danger than toys made elsewhere.”
The article also notes:
Another surprising finding of the study was that design-related problems, such as the use of detachable parts, outpaced defects attributed to manufacturing issues such as the use of lead paint or toxic chemicals.
“It’s astounding to us, this disconnect between the general perception that most of the problems are manufacturing and most of the problems are lead,” said Beamish. “People have got to get lead paint off the mind.”
You know that it’s our engineers here in the US that design these toys and those specs are sent to China for the Chinese to make them, right?
So yes, some of toy recalls in the news as of late are China’s fault, but this study suggests not all of them. (Of course, if the absolute numbers of toys being sourced from China is high, it does not make the problem go away — I want to try and get a hold of their paper so I can see if/how they factor this into their analysis and conclusions.)
And on this note I segway into what Mark Twain once said, and I highlighted in a recent post :
“We should be careful to get out of an experience only the wisdom that is in it – and stop there; lest we be like the cat that sits down on a hot stove-lid. She will never sit down on a hot stove-lid again – and that is well; but she also will never sit down on a cold one anymore.”
What do you think he meant by this, and how is this relevant to the above?