Producing in China is extremely cheap. At least, that’s the appearance, especially when we hear that western production units have been transferred in China. However, appearance is often misleading.
Manufacturing in China is cheap to the detriment of workers. Holidays, social security contributions, unemployment insurance and safety on the job are expensive. Since China is on his way towards development, it is hard to imagine that there could be any job protection or whatsoever insurance or social security.
If Chinese workers are hard-hitting machines, the machinery used substantially lag behind the international standards of efficiency and pollute more than plants situated in other countries. The laws to protect the water, air and soil exist, but the real problem is the enforcement of environmental regulations. Very often, the production objectives established by the local factories in an area have to be pursued at any cost and the environment has to pay the expenses. It has been estimated that 60 % of the precipitations are constituted of acid rains for more than 1/4 of the Chinese territory (World Bank, 1997). As a matter of fact, China is the world leader in production of SO2 and NOx. Taking a look at the lakes, we see that 75% of them are considered to be polluted. The drinking water available to each inhabitant is estimated to be just a quarter of the world average. The machinery and plants used in China use more energy and produce more waste and pollution.
Most worryingly, the products made in China are made with materials that are not in conformity with western standards of safety because toxic. Very often, the products are of such a lousy quality that you have to throw them away after two usages, thus augmenting the amount of waste existing on our planet.
Is it worth to produce such expensive and often useless goods that require a huge amount of labour and raw materials? Besides everything, China is very thirsty of raw materials, such as oil or steel. The boosting demand of raw materials from China is driving up the world prices. If prices increase, and firms want to keep margins, manufacturing becomes more expensive and many firms have to close down or to move their production units where something else (the labour- the environment) is cheaper. More and more people will lose manual skills and craftsmanship, thus production could be nowhere else than in China.
World eats from the same pie: if someone gets a bigger slice, then someone else has to grab smaller slices. A price is not just a tag that have influence on your wallet. If decisions are price oriented, they should take into account the costs of environment and labor rights.
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