China Syndrome

I normally never leave the country over the summer break. Mangonui jumps from sleepy coastal village to being jam packed with happy visitors and the mix of surf, beaches, boat trips and buzz makes it hard to leave. However this year China called and I had to visit various suppliers of our Surf brand Coastlines.
The contrasts couldn’t be greater. Suddenly the warm summer temperatures are replaced with real cold, even in Southern China. Embarrassingly for owners of a clothing label, we had to buy more clothes to combat the cold.
Everything is different in China. Different from what you’ve left, different from what you already know and expect and most of all different from the myths held by many back home.
I spend half of January in a communist country and half in a free market economy, half in a static but sound economy and half in a runaway bull market, half in a place where they control what you say and write and half where they don’t care, half in a high tech country and half in one struggling to catch up.
The strange thing is sometimes it’s hard to work out which of those describes NZ and which China.
These guys are serious about business. The scale of new factories is just mind- blowing and they’re not run on slave labour. Not far from our own factories some enormous new supply factories for Walmart have opened, creating serious local labour shortages, not unlike some places back here, but these factories are unbelievable, over 1km long, 100m deep, 5 stories high and looking more like hotels with palm fringed lakes. Rod Donald would turn in his grave!
China and Russia seem to have invented a new economic model mixing the best of central planning and the free market. The centrally mandated free market cluster zone model and it’s going to be hard to keep up with! Someone determines that an area will manufacture shirts or socks or whatever, and then they go for it with lots of local competition for international business. The sock city used to be rural villages only a dozen years ago and now the privately owned competing firms there make 2 billion pairs per year!
Town planning mandates areas for sensitive industries using chemicals and what we would term dangerous goods. One of our suppliers making surfboards is in such an area and surprisingly the environmental standards are way higher than here. Dust free factories with huge extractors pulling the dust past walls with running water and into closed loop scrubbers removing all residues for collection. Not what we are lead to believe at all.
The hotel brochures describe the incentives for opening new business in each local area. High start depreciation and low initial tax rates to get the business over those tough first three years. I compare that with the greedy development levies that local Kiwi councils extract from anyone foolish enough to try here.
The culture shocks go on all day, and even old China hands will tell you "that in China, every day you see something that you don’t see everyday."
The continuous escalation of eating exotica is one of the challenges that must be met by visiting businessmen. There were days when I longed for the simple but wholesome fare the workers received, but as a mark of respect I was dined on such choice but challenging items as pig’s womb soup, followed by barbequed lamb’s penises (small and chewy), then rounded out with fondued donkey.
One way or another we have to come to terms with China and we should be pleased that NZ has made progress nationally towards a Free Trade Agreement. They are already the fourth biggest economy and the transformation is just massive. We can run and hide, or join in and make the most of it.
Just when USA should be using all their wealth to protect their own economy, they are wasting their wealth at the staggering rate of $2Trillion on the war in Iraq, while China is buying up US Bonds to the value of $1Trillion. Let’s not make the same mistake.
WAYNE BROWN