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Wednesday, October 1, 2008

Made in China

The current crisis in Milk seems strange for a country such as China that has made such huge economic strides and where Made in China has in many areas become a symbol of quality. So many items are manufactured in China including my iPhone. I suggest the reason for this has been a focus on growth at any cost at a local level and at a national level keeping everything calm (ie if there are no problems reported, the people won't get upset).

China's top leadership are Engineers, so they are great at making huge projects happen. The Beijing Olympics, The three gorges dam, and the recent space walk. All amazing accomplishments, but all Engineering focused. Disclaimer, my under-graduate is in Engineering.

A challenge for the central authority, is outside of huge projects where they can apply enough pressure, is dealing with the small stuff. This is delegated or taken care of by the local authorities, and only when it becomes a huge problem does Beijing step in (local governments try to avoid this at all cost). I would compare the local governments to warlords, without the ability to fight each other. They control everything from how laws are applied and often have ownership of local companies. Because of the power of their position, and lack of oversight by the public or central government, this gives them a lot of opportunity to do whatever they want. The press is controlled, which removes the public oversight. The response has been civil disturbances (87,600 of them last year), and when they are big enough the central government intervenes. The use of IM has increased the ability of groups to quickly form.

My modest suggestions on what China can do.

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