When you do business in China you are helping more people than you are hurting

I am always amazed at the fervor of the anti-China sentiment that I see in online discussions in places like Linked In and Google plus. For example, if you join a furniture community on Linked In and initiate a discussion on China sourcing then chances are you will receive at least a couple of hostile anti China messages, usually from companies who have lost business to China.

Many people resent China because of the effect China’s rise has had on their own local economies, in the form of industry shut-downs and job losses. Yet, people who criticize China fail to realize that in spite of the problems it has created, China’s rise over the past generation has done more good than harm for the world. China’s remarkable growth has created far more jobs than it has lost and has pushed down costs on a lot of consumer goods, enabling more people to live better lives. In fact in a recent NY Times round table discussion, the same point was made.

NY Times Round Table

There is no better example about the irrationality of China bashing than in the Smithfield Foods story. Smithfield, America’s largest producer of pork has signed a tentative deal to sell the company to a Chinese pork manufacturer, Shuanghui Foods. If the deal, valued at over seven billion dollars, goes through it would be the largest ever takeover of a US company by a Chinese company. There are a lot of concerns now that the takeover would threaten the safety of the US food supply because China’s struggles with food safety are well publicized. This at least is what one reads in the headlines. However, since the US will not be importing pork from China under the deal these concerns are misplaced. The deal is more to allow Shuanghui to acquire the technology and additional supply it needs to fulfill consumer demand in China. China consumes more pork and has more pigs than any other country but this is still not enough to feed its demand. Pork consumption in America, however is declining, and for this reason the deal would ensure that Smithfield’s 46,000 employees could keep their jobs. In fact the deal would probably allow the company to add new jobs as it ratcheted up to meet growing demand from China for pork products. Make no mistake about it the deal would be beneficial to the US as well to China.

Just as a lot of China business is good for the US.

IMG_7966

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s