Thread about my experience today shipping an oversized package in China. It’s a small window onto how the country has maintained a big cost advantage in the production and export of goods, even as tariffs rise. (1/x)
— Simon Rabinovitch (@S_Rabinovitch) September 1, 2019
I needed to send a single mattress (9kg) 600kms, roughly the distance from NYC to Pittsburgh. Here it is, wrapped up.
— Simon Rabinovitch (@S_Rabinovitch) September 1, 2019
Total cost? Just 38 yuan ($5.30) for two-day delivery. (2/x) pic.twitter.com/o7ADVJ9EiK
How’s that possible?
— Simon Rabinovitch (@S_Rabinovitch) September 1, 2019
Low wages & severe limitations on workers’ rights are big factors. So, too, are top-notch infrastructure (from digital services to highways), plus intense competition in private sector. (3/x)
App gave me a choice of 32 different delivery companies (here’s the screenshot). Delivery is a classic example of an industry in China that is open to private-sector firms, hence extremely competitive. (4/x) pic.twitter.com/JspsfQouWn
— Simon Rabinovitch (@S_Rabinovitch) September 1, 2019
It’s also an example of a sector in which workers are mistreated and underpaid, in part because they’re barred from collective bargaining. Gig-economy nature of the job makes things even worse. (5/x) https://t.co/hH6G0v9GoH
— Simon Rabinovitch (@S_Rabinovitch) September 1, 2019
Sure enough, it’s a Sunday, and the courier came within two hours of my placing the order. This was standard, not express service. (6/x)
— Simon Rabinovitch (@S_Rabinovitch) September 1, 2019
But the speed is not just about labour: it also reflects a logistics industry that operates at a big-enough scale to make deliveries around the clock, and that benefits from very good roads. (7/x)
— Simon Rabinovitch (@S_Rabinovitch) September 1, 2019
Yes, it’s just one shipment. But it points to the norm across much of Chinese manufacturing: low cost, high speed. (8/x)
— Simon Rabinovitch (@S_Rabinovitch) September 1, 2019
This type of cheap labor-driven convenience is one of the reasons that make many middle class Chinese convinced that China is a better-run country than most other countries, including the US. The question is how long this could last. https://t.co/mwn5aHN7Qr
— Li Yuan (@LiYuan6) September 2, 2019
Ironically, it’s never been a ‘China Miracle’—economic success was always tied to artificially low wages workers have been forced to systemically take w/no real ability to protest inequities, seek legal redress or freely move to improve their lot #中国模式 https://t.co/T6p3gVXBAe
— Wes Andrews (@Wes_Andrews) September 2, 2019
China’s economic success via the ‘Chinese Model’ #中国模式 has never been a ‘miracle’—it’s come at the cost of low paid Chinese workers & via an unwillingness to compete fairly as agreed to under WTO (price fixing, subsidies, non-transparency & IP theft). https://t.co/5expJEV6bj
— Wes Andrews (@Wes_Andrews) September 2, 2019