The Chinese Industrial Revolution Right Before our Eyes

Steven Horwitz

The Portland, OR paper has an absolutely fantastic article on Chinese "sweatshop" workers who have now earned enough to own houses (paying cash!) and multi-unit apartment buildings, as well as becoming small business owners and generally aspiring to bigger and better things for them and their children.  This is particularly true of young women.

What's striking about the piece is that almost everything that's happening there is an instant replay of what the West went through 150 or 200 years ago, right down to the female-dominated mill towns of the northeastern US.  One snippet:

Chu Zhiling, a young woman at Beijing Topnew garment factory, sends 80 percent of her income home to Inner Mongolia -- a region with 19 percent economic growth last year, the highest in China.

"I'd like to open a shop, like my friend who has a boutique selling coats," Chu said. "Now that I've seen the world, I have so many more choices than my parents had."

U.S. journalist Leslie Chang followed young Chinese assembly-line workers for her recently published book, "Factory Girls." Chang says money sent home, and migrants moving back, are changing rural China.

Line workers, she says, can earn several times the average $200 annual income of a farm family.

"They're sleeping 12 in a dorm, and it looks like a pretty crappy life," Chang said. "But you don't hear workers say, 'Oh, I have no hope, I'm a slave.' They say, 'I want to save some money. My dream is to be Bill Gates or to own a restaurant.'"

Chang views sweatshop critics as condescending. She notes that the 19th-century U.S. industrial economy developed in a similar way, as Vermont and New Hampshire farm girls migrated to work in Massachusetts textile plants, sending savings home. She says savvy Chinese workers, not preachy activists, are securing better conditions and wages in China's fast-developing economy.

There's no doubt that the very short run effects of industrialization are not pleasant, but the medium and long-run ones are strongly positive, both in terms of the narrowly economic benefits and the ways in which urbanization and wealth and the cultural mingling it brings open up the world to young people, especially young women. 

As they say, read the whole thing.

Comments

[Current]

But, I think we must agree that the whole idea of the "American Dream" is a fraud. It is similarly a fraud in other countries - probably much more so in China.

Though it is good that people are becoming richer it is disappointing that they have unrealistic expectations.

[The_Orlonater]

Unrealistic expectations about what? You're post is extremely incomprehensible, what kind of "American Dream" are you talking about? When you equivocate the way you do, you leave a lot of questions and implications.

[Aidan]

A couple of years back the National Geographic did a piece on new industrial cities in China. They quoted from Chinese job advertisements for the new factories being set up. All of which ended with the phrase: 'Must be willing to eat bitterness and work hard.'

Sounds like the best and most accurate description of working for any organisation anywhere.

[Ann]

It's interesting to link what's happening in China to the same shifts in the US so long ago, but there are many more recent examples, including Japan and later the Asian Tigers (Singapore, Hong Kong, Taiwan and South Korea). There were plenty of sweatshops in Hong Kong in the 1970s, helping people to become so prosperous that factories eventually had to move elsewhere to find cheaper labor. This then started to bring prosperity to other countries such as Malaysia, Indonesia and Thailand. Finally China began to get its act together, and now even Vietnam is making progress.

I lived in Hong Kong in the 1990s and was surprised at the vehemence of the hatred there towards the anti-sweatshop people. It's a pretty common belief in Asia that the people pretending to be against sweatshops out of concern for the workers are simply 'dogs in the manger' (although they might not word it that way). The anti-sweatshop people are seen as saying 'we got ours and now we're going to stop you from getting yours'.

[Pablo Kuri]

How will the economic historians tell Chinas story? For a sample of the bias read Capitalism and the historians, edited by F.A. Hayek.

[Current]

The_Orlonater,

What I'm complaining about is stuff like this:

> They say, 'I want to save some money. My dream is
> to be Bill Gates or to own a restaurant.'

It is an unrealistic expectation that someone in that situation can become rich as Bill Gates did. Though whether it's an unrealistic expectation that they can become a restaurateur I don't know.

[Globalglassonion.blogspot.com]

http://marketwatch666.blogspot.com/2010/03/coming-chinese-hegemony.html

[The_Orlonater]

Current,

People have many ways of expressing themselves verbally, hyperbole is one of them. I don't think interpreting them literally is something that should be thought about with regards to economic policy. Who knows, maybe for them a middle class income is like being Bil Gates, considering what their older generation went through.

[Current]

Fair point. Without knowing the context we don't know.

[happyjuggler0]

This shouldn't come as a surprise for anyone who has thought things through while trying to think like a savvy local would.

1) Government (i.e. Deng's, followed by others) gets out of the way (more or less).

2) Impoverished people (due to pre-Deng policies, i.e. Maoist economic stupidity) are willing to work for very low pay because that is a step up from where they are.

3) Savvy capitalists (e.g. Nike) come in and give them what they want, which is a better job than they have at better pay.

4) They (i.e. workers) save money because they live cheaply and have no time to spend it anyway.

5) They take their savings and then move back to their home village where everyone is poor and making even less than they did at allegedly vile sweatshops. They then use those savings to become entrepreneurs (a la Bill Gates, who saw an opportunity and grabbed it), in the process hiring those dirt cheap workers in a win/win situation. (The new workers win because their lives just took a turn for the better, or they wouldn't have taken the new job).

6) Chinese people move up the ladder economically because they used their natural resource of cheap labor at market prices, despite the best efforts of ignoramuses on US college campuses and writers at rags like the Huffington Post.

To make a long story short, cheap labor is a great invitation for foreigners to profit from, and then locals with newly found money to profit from, and all this pushes up those low wages, even in a country with ~1.4 billion people.

Wealth is not a zero sum game. All it takes is for government to get out the way enough to let people's natural desire for self-betterment to take over.

[Rafe Champion]

If it was good enough for Charles Dickens to support himself by working in a "sweatshop" when he was 12 years old and his parents were in the debtors prison, it is surely good enough for grown up Chinese to put their foot on the ladder in so-called sweatshops. The point is that people have to confront the choices that are available at the time and place where they live.

On "Capitalism and the Historians", the chapter by Bill Hutt is on line. It describes how lies about the factories were written into the standard historical accounts of the period.
http://www.the-rathouse.com/Revivalist4/RC_FactorySystem.html

If you think that was weird, the same thing is happening right now in Australia regarding the so-called stolen generation of Aboriginal children. In fact somthing like 10% to 30% of some generations were taken into care, mostly for their own good but in the wake of a report compiled in the same manner as the Saddler report of 1830 a bogus account of this "crime" is likely to be taught to all children, starting in pre-school.

Sorry if this is off topic but it shows the power of single-minded interest groups to manipulate public opinion. The factory owners in 1830 thought that the facts in the Sadler report were so wide of the mark that nobody would take them seriously.

I am surprised that libertarians are not more active in disputing the contents of standard schoolbooks and undergraduate texts in history and economics.

[topills.com review]

Sorry if this is off topic but it shows the power of single-minded interest groups to manipulate public opinion. The factory owners in 1830 thought that the facts in the Sadler report were so wide of the mark that nobody would take them seriously.