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China, Inc.: How the Rise of the Next Superpower Challenges America and the World

China, Inc.: How the Rise of the Next Superpower Challenges America and the World

4.3 6
by Ted C. Fishman

The updated edition of journalist Ted C. Fishman's bestselling explanation of how China is rapidly becoming a global industrial superpower and how the American economy is challenged by this new reality.

China today is visible everywhere — in the news, in the economic pressures battering the globe, in our workplaces, and in every trip to the store.


The updated edition of journalist Ted C. Fishman's bestselling explanation of how China is rapidly becoming a global industrial superpower and how the American economy is challenged by this new reality.

China today is visible everywhere — in the news, in the economic pressures battering the globe, in our workplaces, and in every trip to the store. Provocative, timely, and essential — and updated with new statistics and information — this dramatic account of China's growing dominance as an industrial superpower by journalist Ted C. Fishman explains how the profound shift in the world economic order has occurred — and why it already affects us all.

How has an enormous country once hobbled by poverty and Communist ideology come to be the supercharged center of global capitalism? What does it mean that China now grows three times faster than the United States? Why do nearly all of the world's biggest companies have large operations in China? What does the corporate march into China mean for workers left behind in America, Europe, and the rest of the world?

Meanwhile, what makes China's emerging corporations so dangerously competitive? What will happen when China manufactures nearly everything — computers, cars, jumbo jets, and pharmaceuticals — that the United States and Europe can, at perhaps half the cost? How do these developments reach around the world and straight into all of our lives?

These are ground-shaking questions, and China, Inc. provides answers.

Veteran journalist Ted C. Fishman shows how China will force all of us to make big changes in how we think about ourselves as consumers, workers, citizens, and even as parents. The result is a richly engaging work of penetrating, up-to-the-minute reportage and brilliant analysis that will forever change how readers think about America's future.

Editorial Reviews

William Grimes
Mr. Fishman describes China's miracle economy with a mixture of fear and admiration. He is a lively writer, and some of his most vivid pages are devoted to the wrenching transformations brought about by the government's controlled experiment in free enterprise. He paints a neon-lit portrait of Shanghai, the showcase city of the new China. He also walks through the market stalls and factory floors of new super-cities like Shenzhen, a fishing town of 70,000 20 years ago that now has 7 million people, making it larger than Los Angeles or Paris, swelled by migrants from the countryside looking for a better life in the city. They are part of the largest human migration in history, a tide estimated to be as high as 300 million Chinese who account for the dynamism of the Chinese economy.
— The New York Times
Publishers Weekly
A lively, fact-packed account of China's spectacular, 30-year transformation from economic shambles following Mao's Cultural Revolution to burgeoning market superpower, this book offers a torrent of statistics, case studies and anecdotes to tell a by now familiar but still worrisome story succinctly. Paid an average of 25 cents an hour, China's workers are not the world's cheapest, but no nation can match this "docile and capable industrial workforce, groomed by generations of government-enforced discipline," as veteran business reporter (and Chicago Mercantile trading firm founder) Fishman characterizes it. Since Mexican wages were (at the time) four times those of China, NAFTA's impact has been dwarfed by China's explosive growth (about 9.5% a year), and corporations and entrepreneurs operating in China have few worries about minimum wages, pensions, benefits, unions, antipollution laws or worker safety regulations. For the U.S., Fishman predicts more of what we're already seeing: deficits, declining wages and the squeezing of the middle class. His solutions (revitalize education, close the trade gap) are not original, but some of his statistics carry a jolt: since 1998, prices in the U.S. have risen 16%, but they've fallen in nearly every category where China is the top exporter; a pair of Levis bought at Wal-Mart costs less today, adjusted for inflation, than it did 20 years ago-though the company no longer makes clothes in China. First serial to the New York Times Magazine; author tour. (Feb.) Copyright 2005 Reed Business Information.
Library Journal
As China starts making more stuff more cheaply, how will the rest of the world stay afloat financially? Journalist Fishman is facing a six-city author tour. Copyright 2004 Reed Business Information.
Kirkus Reviews
Will China soon own the world? Perhaps. "The opportunities now in China are too big to miss," writes business journalist Fishman in his timely look at the Pacific Rim's most powerful economic tiger. The national economy is expanding at annual rates (officially, 9.5 percent) that seem scarcely imaginable and scarcely sustainable. The impetus behind that growth is simple, the author notes: With a population of somewhere between 1.3 and 1.5 billion, the number of new businesses launched in the last generation exceeds 120 million, while the number of workers who have left the countryside to work in the cities exceeds the entire US workforce. China's growth is without equal in modern history, Fishman argues, and it has disturbing implications for workers in the US and Europe. China is not only capturing more and more of the world's market share in consumer goods, it's making increasing inroads into the more significant trade in "the infinite number and variety of components that make up everything else that is made," from gaskets to bolts to computer chips. Yet another great economic engine is small business; hundreds of millions of small concerns are on hand in China to provide whatever the market is calling for-never mind that those goods are so often cheap and of low quality. (Where, after all, would WalMart be without China?) Fishman is a little alarmed by China's growth, but also ready to comfort readers with the prospect of ever-falling prices thanks to its abundant low-wage labor pool. He is more alarmed, however, at a seeming codependency that is emerging, in which Americans buy Chinese goods with money that is in essence on loan from China. "The United States," he warns, "cannot takeon ever-bigger debt and amass huge trade deficits indefinitely."A thought-provoking and accessible forecast of strange times to come. First serial to the New York Times Magazine; author tour. Agent: Sloan Harris/ICM
From the Publisher
"Alan Sklar has a deep and musical voice. He reads us the bad news with enthusiasm." ---AudioFile

Product Details

Simon & Schuster Adult Publishing Group
Publication date:

Read an Excerpt

China, Inc.

How the Rise of the Next Superpower Challenges America and the World
By Ted C. Fishman


Copyright © 2005 Ted C. Fishman
All right reserved.

ISBN: 0-7432-5735-9

Chapter One

Taking a Slow Boat in a Fast China

The banks of the Huangpu River running through Shanghai do not just bend. They mind-bend. For a century and a half, the currents of change coursing through modern China have been more visible from Shanghai's banks than from anywhere else. Here Western powers pushed in most aggressively in the mid-nineteenth century, and later the Japanese made their claim in 1895. The foreigners established an all-but-independent city-state to run their China trade. Western tastes mingled with China's on such a grand scale that The Bund, then Shanghai's commercial center on the west bank of the river, looked like the gleaming boulevard of a great European capital.

In the early twentieth century - until China and the world unraveled in the 1930s - Shanghai counted as one of the world's five most important commercial centers together with London, New York, Paris, and Tokyo. The city was also the world's second-busiest port. Its banks, housed in the imposing hodgepodge of broad European money palaces and slim towers on The Bund, were flush intermediaries in an irresistible trade with Western and Japanese sellers of machines, cotton cloth,medicines, and opium. Chinese factories poured out clothing, paper, and other simple manufactured goods at prices foreigners could not match at home. Commodities in vast quantities moved in both directions.

While foreigners created Shanghai as a world port, the city soon proved a magnet for Chinese looking to work in factories or, during periods of social unrest, for sanctuary. The large migration into Shanghai, and the foreigners' fears that their city would be engulfed, helped lead to the system that ultimately divided the city into separate zones, gated sections of town for the colonists, known as concessions, and the rest for Chinese. Paradoxically, the division also created China's first modern city when the Europeans imposed a formal municipal government over Shanghai. Previously, Chinese cities, though often large, did not have single municipal governments. Interestingly, the English word modern was transliterated into Chinese for the first time in Shanghai, and the city became synonymous with the new.

This Chinese city reborn with Western management built the country's tallest buildings, was home to its most prominent banks, had streetcars and running water, beauty parlors, business suits, and French fashions. The city's modernizers were not always Europeans or Americans of the standard colonial mold. Since Shanghai's modern beginning it was also the home of a small but extraordinary group of Jews, many from Iraq, Spain, Portugal, and India. Controllers of property, entertainment, and financial interests, the Hardoun, Kadoorie, and Sassoon families helped create the new world of Shanghai that was neither Occident nor Orient.

The city, however, was never new enough to wash away old prejudices. Stories are told of the notorious sign outside the British Huangpu Park that forbade entry by "Dogs or Chinese." Shanghai then, as now, collected the world's contradictions. Asia's capitalist hub was also the site in 1921 of the first meeting of the Chinese Communist Party. The city that gave birth to the verb shanghaied also played host to the lost. In World War II, the city, which stood apart from the world of nations, became a refuge for as many as thirty thousand European Jews fleeing the Nazis.

In 1949, the Communists seized the country, and for the next forty years the creative power of Shanghai turned away from enterprise. Commercial life stopped dead. Shanghai's grand European architecture and the pre-1940s brick blocks that reflected the city's worldly blend withered.

Today Shanghai is again China's most proudly modern and global city. Yet the city's history of foreign domination is one of China's enduring national wounds. That collective hurt helps to fuel the insistent drive of the Chinese today, as well as China's ambivalence about what it is willing to give and take from outsiders. Historical Shanghai was corrupt but glamorous, barbaric but sophisticated, repugnant but remunerative. The Chinese government routinely trots out this darker side of Shanghai's past. The government uses the colonial history of Shanghai, once painted "The Whore of Asia," to remind its public that there's an enemy world ever ready and willing to humiliate their proud civilization.

Thus, if ever a people had chips on their shoulders, it would be the Shanghainese, chips they are urgently stacking into skyscrapers. Despite, or because of, their historical feeling of humiliation, the Shanghainese are perhaps the most assured - other Chinese would call them arrogant - among their countrymen. The Shanghainese consider themselves China's best businessmen and -women, most capable public administrators, most global in outlook, and most daring risk takers. It is no accident that a disproportionate number of the Communist Party's highest leadership came from this city, or that China has singled out Shanghai as the city that will first displace Hong Kong as the mainland's top financial center and then take its place as one of the top business and financial centers of the world.

So the middle of the Huangpu is good place to witness the rhythms of the city past and present. Traffic piles up on the water in the same way that it does on the city's overcrowded roads, and the afternoon boat tour takes travelers right into the heart of the maritime rush hour, when hundreds of barges, some shaped like oversize sampans, others like floating mountains of sand or coal, line up four or five across the width of the river under the shadows of orange-hulled oceangoing cargo ships or natty gray vessels that look like floating factories but carry gas and chemicals.

The tour boat is billed as a catamaran, but looks and rides like a slow-moving barge - with a three-story restaurant slapped on top. Except for two giant bug-eyed brass dragonheads jutting from the bow, the boat feels like a low-rent Chinese banquet hall. Filled with baroquely carved and generously marred throne chairs, banquet tables with starched but stained tablecloths, and an immobile, bored staff, the vessel is a floating ambassador from the state-run tourism sector, a nationwide empire of shabby hotels and restaurants. The boat service, one of China's first commercial tourist ventures, still peddles the Communist version of glamour even as it plies the wide gray river for three and a half hours, working its way slowly toward the intersection of the Yangtze River and the East China Sea.

Despite the river traffic, Shanghai was until recently fairly self-contained, bordered close in by a countryside of farms. When the boat tours commenced shortly after China's economic liberalization began in the early 1980s, one could still gaze across the water and see rice and vegetable fields, yards with chickens, pigs, geese, and shady trees. The Bund had grown dowdy from decades of Communist disdain, and for years few businesses saw any good in it. The grandest buildings had been taken over by regional and municipal agencies with ideological grudges to bear against the old foreign banks and hotels. Even as Shanghai bloomed throughout the 1990s, The Bund remained largely dormant, like an urban set from a 1930s Hollywood movie extravaganza that had never found another script.

Then, as Shanghai earned back its commercial bearings, it attempted to restore some international elan by leasing space in one of the big Bund buildings to a giant Kentucky Fried Chicken outlet, which at the time was a luxurious taste of the West for locals. Today, KFC is gone from The Bund, but has found new homes all over the city where it has settled into place as a popular indulgence. The Bund, meanwhile, gains the luster delivered in all world capitals by the international purveyors of lifestyle. Now one can find there Italian chocolates, Evian Spa, spruced-up boutique hotels, and world-class restaurants run by superstar chefs from Paris and New York. Three on The Bund, an entertainment complex on the waterfront, occupies an old office tower that underwent a $50 million renovation steered by one of the world's most prominent architects, Michael Graves. It includes what may be the world's most spectacular site for an art gallery, high above the river with windows out onto the water traffic and the riverfront's dancing curtain of colored light.

Making all this change possible is a city with real wealth. Average incomes in town are ten times higher than outside, with a sizable middle class that makes $10,000 or more a year, and often much more. There's an official name for the money that people make above the income they report: "additional sources." Plenty of people seem to have them. Jammed on The Bund and elevated highways are private cars that cost thousands more than they do in the United States or Europe. The Shanghai municipality requires drivers to pay a $5,000 permit just to buy one. Top models are back-ordered nonetheless. The boom in private apartments, many costing $100,000 and up, wouldn't happen in a city without lots of additional sources. A boom is fueling the boom. Shanghai property values climbed so fast that they created a whole new moneyed class in the city. Locals with enough currency and nerve to enter the housing market in the mid and late 1990s saw their property climb in value at least 20 percent year over year. Many properties doubled in price in less than three years. People bought more. Sold some, bought still more. A local scandal erupted on the news that one-third of Shanghai's new crop of luxury apartments had been bought and sold again before they were ever occupied. The result of the boom is a demographic of young Shanghainese who do not truly grasp where their wealth has come from, feeling that if they just stick their hands in the air, money will fly their way.

One of the triumphs of the Communist Party was its success in spreading the easy use of Mandarin Chinese among nearly all of China's population. The Shanghainese, of course, speak superb Mandarin these days, but immigrants to the city from other areas of China are now for the first time studying the city's local tongue, Shanghainese. Phrase books and dictionaries that help Mandarin speakers pick up the dialect are appearing in local bookstores. Shanghainese language schools have begun to pop up. All because the city's Shanghainese upper stratum of managers talk among themselves in Shanghainese, even in the presence of outside workers, executives, or public officials. The knowing nods and glances make others suspect the Shanghainese are keeping secrets. Foreigners wonder the same. Language-learning materials have begun to appear on eBay for American and European buyers.

The goal of learning the local language is to capture for oneself whatever particles of the city's energy one can absorb. Colonial Shanghai once prospered by peddling opium to locals hooked on oblivion. Now energy is Shanghai's drug, craved more powerfully by a population pouring into the city to seize its supercharged moment. Shanghai's young glow with an optimism that comes of living in a time when the local economy doubled, redoubled, and doubled again.

Behind The Bund and just visible from the boat, the city is pushing against every boundary north, south, and west. The world's construction cranes started migrating en masse to Shanghai in the late 1980s, stretching the boundaries into the sky too. More than five thousand new buildings over fifteen stories tall were built by 2004.

If the river is the best place to look up at the city, the best place to look down on it is not from one of the city's tall buildings. From those heights one must peer through a sickeningly brown smog that floats along the upper reaches of the skyline like the film at the top of a coal miner's bath. The clearest view of Shanghai's shape is found in the Shanghai Urban Planning Exhibition Hall. One of the fantasy oddball showpieces on Renmin (People's) Park, Shanghai's festive answer to Tiananmen Square, the Hall is a gleaming glassy white box of a building about the size of an urban department store. It is topped with four giant canopies shaped like inverted circus tents, making it one of the cheeriest buildings in town.

Inside one may see how thoroughly Shanghai is obliterating its low-rise past and building a high-rise future. On the third floor is a scale model of the entire city with nearly every building extant or planned, rendered as a little colorless tower. The model covers an area the size of a basketball court, and no building is more than four inches tall. What other city in the world would take a parcel of its most valuable real estate bestride its main park and devote it to a building celebrating the civic leaders' plans for the future? In another city there might be a computer image of future schemes on a Web site somewhere, a model under glass in city hall or the science museum. But not a whole building. In Shanghai, even civic propaganda falls under the spell of gigantism. And it works. Even scaled down to insect size, the burgeoning city feels like a living thing that is spreading over the earth, its horizon receding out of view.

Locals walk the elevated platform that surrounds the model looking for their homes, or the high-rises that have taken the place of their homes. The model would have looked entirely different not long ago. In Shanghai, people grew up in neighborhoods with local schools (often housed in the former mansions of the city's foreign elite), small shops, and street vendors, and closely quartered two- and three-storied homes, all of which made for intimate, self-contained communities. Kids played ball, moms hung laundry, and granddads played mah-jongg or sat with their caged birds. Today, young people who go off to school in another city or abroad, or graduates who leave the city for work, can return home after a year or two away and find that in place of their little house is a complex the size of New York's U.N. Plaza. The experience is not just physically dislocating. It gives one the sense that no matter how muscularly it is remade, the city is impermanent, that the only thing that will endure in Shanghai is ambition.

The Exhibition Hall competes for attention along Renmin Park, where the city's huge but graceful Grand Theater, designed by a Frenchman and opened in 1998, looms like a Pompidou Center reassembled as a Chinese temple. Across the street is the round Shanghai Museum, built of pink Spanish granite and designed to resemble an ancient Chinese bronze vessel, complete with rooftop arches in the shape of handles. The museum was China's first planned on the modern American model. Appeals for money and artifacts went out to philanthropists, especially overseas Chinese millionaires wanting to give something to the motherland - and perhaps get something back from the motherland too. It is the place in Shanghai where foreign tourists feel most comfortable, connecting the majesty of ancient China with the new. Through the galleries move a throng of foreigners mind-numbed by jet lag and five thousand years of Imperial display.

How Taiwan Invaded Shanghai

Not all of Shanghai's ambition is homegrown. Far from it. Though the model at the Urban Planning Exposition Hall means to give the impression that the city is in control of its destiny, the view from outside reveals how much the current Shanghai has been remade by foreign energy, money, and world-class talent pouring in. One area of Shanghai once well out of view that now rises in the skyline is the city's newest foreign enclave, the locus of Shanghai's resurgence.

In the 1990s, foreigners began rushing in again, and a whole district of the city, the Gubei New Area, was reconfigured for them. For the newcomers, the welcome mat replicated - no, topped! - the relative opulence of Taipei, Hong Kong, and other Asian cities. Huge deluxe apartment complexes the size and subtlety of giant Las Vegas hotels sprang up. Though set back several miles from The Bund, the Gubei complexes - together with those of Shanghai's other new skyscraper districts - are so enormous that they make the older buildings look like a row of town houses. And, like the international settlements of old Shanghai, which catered to the creature needs of the Europeans and Japanese, Gubei is now a city within Shanghai that replicates the prosperous Asia that lies outside China.


Excerpted from China, Inc. by Ted C. Fishman Copyright © 2005 by Ted C. Fishman. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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What People are Saying About This

From the Publisher
"Alan Sklar has a deep and musical voice. He reads us the bad news with enthusiasm." —-AudioFile

Meet the Author

Ted C. Fishman is a veteran journalist and former commodities trader who has emerged as a leading expert on the People's Republic of China. His essays and reports have appeared in the New York Times Magazine, Harper's, and Esquire, among others.

Audie Award finalist Alan Sklar has narrated nearly two hundred audiobooks and has won several AudioFile Earphones Awards.

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