THE BAIT AND SWITCH OF THE CHINA MIRACLE
The 21st Century Will Belong to China, Demographics is Destiny
In July we 2024 we still reflect upon our humble beginnings as a nation, and what a miracle it was that the Colonists were able to defend American soil against the British and win their liberty. The framework created by the Founding Fathers allowed individuals to create their own communities and put the individual in charge of their liberty.
Today we have large number of people who want a centralized plan from technocrats to make recommendations for us. This stand in stark contrast with our founding ideals, as globalism requires us to subordinate our goals and interests to a greater plan for those who are not our neighbors, let alone our fellow citizens. A central authority tell us this, and we are to assume there is indeed a benefit that has been passed on to others.
“The World Is Flat” by Tom Friedman extolled the virtues of a global economy, and it became the de facto talking points for liberal intelligentsia to declare “Demographics is destiny, China will own the 21st Century”. This best predetermined future described by Tom Friedman and Paul Krugman of the New York Times has become so ingrained in our business strategies and culture, we became convinced that this prognostication was indeed an accurate forecast as we sent manufacturing offshore.
On many occasions Friedman wrote about the superior organization of cities, industry and transportation in China. While lamenting censorship, you get the sense that Friedman felt that the inconvenience of backward US urban planning and lack of centralized societal engineering outweighed well intentioned censorship. China was building great things, better things than the US, so that is the price to pay.
It actually started well, on Kau Sai Chau, an island off Hong Kong, where I stood on a rocky hilltop overlooking the South China Sea and talked to my wife back in Maryland, static-free, using a friend’s Chinese cell phone. A few hours later, I took off from Hong Kong’s ultramodern airport after riding out there from downtown on a sleek high-speed train with wireless connectivity that was so good I was able to surf the Web the whole way on my laptop.
Landing at Kennedy Airport from Hong Kong was, as I’ve argued before, like going from the Jetsons to the Flintstones. The ugly, low-ceilinged arrival hall was cramped, and using a luggage cart cost $3.
ADV China offers a well balanced look at China. Watch this video, it is central to this article.
Yes, this is the typical America bashing we have been accustomed to for decades, and in the past, comparisons of Europe to the US has been the foundation of those criticisms. But watch the video included with the article, and you’ll see that there has been a bait and switch swindle that has occurred in China. ADV China, two ex-patriots with businesses in China rightly report how the Ghost Cities in China are crumbling. Yes, after only three years, they are crumbling. Three. Years. The video will show you the construction techniques used, and most telling is that where ree rod and mess should have been used in concrete, wood has been used instead. No wonder these buildings are crumbling and dangerous.
Krugman and Friedman have propped China for nearly two decades, and the result has been investment that has fueled the “miraculous” growth, as well as the myths that China, under technocratic guidance, is the destiny of a sustainable and managed society. China is no longer a communist nation, it has been shaped into something far more sinister. It is a technocratically engineered society that benefits a small group of elite globalists. That is, through the use of technology and under the helm of scientific elitism, a centralized and tightly controlled society has been created which answers to the global elite, not merely the CCP. There is top down control of expression of opinion, and when required, violence is used to subdue uprisings like we saw during the COVID lockdowns of Shanghai. But cell phones with a tightly controlled internet are the tools that give the Chinese government the ability to measure and manipulate population and the economy. The Chinese population is a resource that is farmed out to global manufacturing concerns, cheap labor, which attracts investments that the CCP use to fuel their controlled economy. In the early days of communist China, education and science was discarded for approved thought from communal groups. It was consensus, but not based on sound principles of economics, commerce and science as we define them in the west, that drove activity. Today, technocracy is what runs China. It’s far different. It does use economics, science, and demographics to inform planning decisions, but the technocrats securely capture the output and other activities of the Chinese people.
In our documentary Rationed State, we detail how the proponents of sustainability are actually technocrats who are of the same mindset as Friedman and Krugman: let the smart, elite employ scientific principles, unfettered, to reshape society. China is the model, they know how to get things done. Look at all the cities they have built in record time.
But the result is that the cities are falling apart. Not in a decade, but within years. This is what the “architects of the future” are delivering in the model for the world to see. Why would you trust them to craft superior food manufacturing or delivery systems for you?
Coming to America: We Turn To China To Teach Us About Manufacturing
When you read the headlines from media based in Michigan you would think that a revolution in manufacturing is occurring, and that the World Economic Forum’s prediction that Michigan as a central focal point for the Fourth Industrial Revolution is coming to fruition. In 2023 2 billion dollars was funneled from the state legislature via the Michigan Economic Development Corporation to the emerging Electronic Vehicle manufacturing sector.
Along with misconstruing tax funds for prosperity and actual industrial production, there has been a reboot of the 1980’s comedy Gung Ho in the form of a documentary named American Factory that is now on streaming services with a message of hope for the American Midwest. Yes, China is depicted as a savior. While the new jobs are indeed welcomed in Ohio, notice that this trailer highlights that the US workers are clumsy, they need to be retrained, they are a burden. Despite the triumphant music playing throughout that swells your heart with hope, what is not included in the trailer is how manufacturing was outsourced overseas by our own auto industry and that practice has been encouraged by our legislators. Whether due to increased labor costs, union travails or burdensome regulation, the manufacturing know-how and opportunities were brought by the Big Three automakers and other US industries to mainland China. Indeed, I have a neighbor who, as an engineer for Ford, spent years in China training his counterparts.
The documentary itself depicts a different story. A more tragic one. Cao Dewang, Chairman of Fuyao, invested considerable money in the Moraine Ohio facility. 2000 local workers were hired to be trained and eventually run the facility as a subsidiary. From the start it’s easy to see that Chao has his plan and is not interested in input from local expertise. In one scene his American management team tells him that for the opening ceremony in October, they need a canopy over the presentation area in case of rain. Chao assures them that the weather in October is not much different than in July, and it will not rain. As the movie progresses Chao is clearly unconcerned with regulations and local construction ordinances. He has a deaf ear to how those are laws and must be followed. Safety is not a high concern for Chao, and the movie depicts serious injuries that result for the environment that the workers must contend with. There is a scene with a group of American Fuyao management in China where they are brought to the defect disposal sector of the plant. Chinese workers are picking shards of glass while wearing no protective gear other than thin gloves. One of the Americans comments that the gloves are not adequate for protection.
The filmmakers did not include the OSHA violations and the fatality at the Fuyao plant:
In November 2016, OSHA proposed $226,937 in penalties for 23 serious safety violations and one other-than-serious violation. These violations included machine safety issues exposing workers to amputation risks, lack of personal protective equipment, electrical hazards, failure to train workers about hazardous chemicals, and unmarked exits.
https://www.dol.gov/newsroom/releases/osha/osha20161110
https://www.daytondailynews.com/business/fuyao-response-osha-are-laser-focused-safety-and-quality/nMecLXh01DN6WK0PdBl5GM/OSHA inspected the Fuyao plant 12 times in four years, indicating ongoing safety concerns. OSHA fined Fuyao $724,380 for "nine repeated and 13 serious violations". These violations included electrical safety issues, failure to evaluate permit-required confined spaces, inadequate training on lockout/tagout procedures and confined space entry, lack of machine guarding, insufficient hearing protection, and failure to require fall protection.
https://www.daytondailynews.com/business/osha-prepares-enforcement-action-against-fuyao/IxhCGGoD9zFcD1GYIgxIfPIn March 2018, OSHA proposed a $7,000 fine following the death of a worker, citing Fuyao for not ensuring proper safety measures when employees were cutting banding on heavy pallets of glass sheets
https://www.daytondailynews.com/business/osha-prepares-enforcement-action-against-fuyao/IxhCGGoD9zFcD1GYIgxIfP
One thing that the Chinese manufacturers are known for is their ability to produce high volume for highly reduced labor costs. This issue is that what they lack in quality, they make up with their volume. In a Just In Time (JIT) manufacturing environment, that is a show stopper. As quality and efficiency guru W Edward Deming maintained, rework is far more costly because the defects are passed on to multiple stops along the process, including the customer. That has huge effects. Chao and the Chinese management team are shown to be driving the Americans to work faster in order to make up for the flaws in the product. Again, Deming demonstrated that in manufacturing, it is the process that produces a high rate of defects. A worker moving a sheet of safety glass from point A to point B has little say in how far that distance is. In the film there is a scene where a forklift driver explains to Chinese management that the forklift is not capable of moving the weight as expected. There is no bottom up communication, the workers with direct hands on knowledge and years of experience are ignored.
The starkest contrast between the trailer and the film itself is the story of workers. I have to say the film is far better, as it depicts a much grimmer picture than what the trailer portrays. Safety issues became the main issue while working at the plant. One gentleman with 30 years experience, never having had an injury while working at the same facility while it was owned by GM, was severely injured when his entire shin was sliced by a shard of glass. At the outset, the American employees express their extreme gratitude for the opportunity to work again. But when the safety concerns are addressed, when Chinese management has dumped paint and other chemicals without proper disposal procedures, talk of unionizing arises. The movie does an excellent job of portraying how Fuyao opposes American unions. Yet in China, the Fuyao union, a subsidiary of the CCP and run by Chao’s brother, works harmoniously with the manufacturer. 12 hour shifts, one day a month off. While attempts to unionize are ultimately unsuccessful at the Ohio Fuyao plant, the tragic layoffs that occur despite that are presented. People who had been loyal to the Chinese management were spied on, and even with their loyalty, they were fired from their jobs as younger workers were hired. A true bait and switch.
Michigan Farmland: Best Place For A Factory?
We have not only lost these opportunities to maintain a strong economy, we became accustomed to the predictive programming that Friedman and Krugman chanted that the rise of China was inevitable as our government at state and local levels created environments that gave the Big Three automakers and other industries an excuse to move offshore. This is not the trend of economics alone at work, as Toyota has run successful manufacturing facilities in Tennessee for years. Yet with American Factory, the premise in the trailer is certainly biased against our work force retaining qualified knowledge. Yes, as Governor Whitmer and others from Michigan, including Ford, have stated “we need Chinese expertise.”
The trend in my state of Michigan is to suspend all questions of zoning, denying local communities their rights to information regarding new manufacturing facilities in their farming communities and potential impact as we race to build factories that will use the most toxic substances on Earth to create electric vehicles. City and county commissions have ignored their voters to usher in the new saviors. It is a bait and switch, as the companies are foreign entities and not US based. This limits the wealth that will be recirculated back into the economy. They are not US subsidiaries of Chinese companies but are licensed entities from mainland China. They are CCP companies. This had been withheld from the public until after the 2022 election, and both Republican and Democrats were well aware of the parties involved with these projects. These plants will not reside in the Detroit region which has the infrastructure for waste disposal and transportation of materials via rail and truck; instead, we will destroy farm communities and locate these plants on the state’s largest watersheds. One battery plant will require 715,000 gallons of groundwater a day.
China has a terrible record with regards to environmental stewardship, and these facilities will be situated far from regions where industrial inspections currently take place. It does make you wonder what recourse the citizens of Michigan will have should environmental issues arise, will a Chinese entity respond in court to lawsuits, or will special interests looking to protect their relationships further obfuscate operations of these facilities?
Finally, despite all the fanfare regarding the return of jobs, have we as a country truly lost our expertise in critical manufacturing industries? There were no other US startups that could be considered viable instead of foreign corporations?
This bait and switch will continue. Maybe the miracle is if we could truly awaken to the false promise of government guiding success in our economy. Sometimes the experts have answers that are not in our best interests. You should ask yourself why we ally ourselves with foreign interests over our own. Consider that the World Economic Forum has stated that there will be 75% reduction in total vehicle ownership and you may have a clue as to how productive these new factories will actually be.