Saturday, October 22, 2011

Apple and China and the Dark Side

The right wing is filled with glee about a revelation in the soon-to-come authorized biography of the late Steve Jobs. It seems that President Obama sought out a meeting with Jobs. At that meeting, Jobs scolded Obama that it was easier to open a factory in China than in America. Jobs told Obama that he might be a one-term president.

So: Jobs says we should be like China. Should we? Not if it’s the China that I know about.

1. Marriage: it takes bribes (or a lot of travel).

A friend of mine taught college in China, like I did. He fell in love with a beautiful Chinese student, and they decided to marry.

My friend was a man of principle. He was determined to get the signatures and certificates that would allow him to consummate their betrothal, and he was determined to do that without paying bribes. He ended up traveling great distances within China to find officials who would do their duty without demanding extra payment.

Here’s a rhetorical question to my married friends: how many officials did you have to bribe to get married in America?

2. Civil negotiation: theft.

I knew the American president of a Christian trucking company in China. One of his drivers had a collision with a Chinese police officer. The company investigated and found that the officer caused the collision. The officer’s colleagues demanded substantial payment for the seriously injured police officer – enough for him to live comfortably for the rest of his life. The company refused.

But after much pressure, the company offered to pay the officer’s medical bills. This was a compromise, but the police didn’t see it that way. They said that it was an admission of fault, and they continued to demand extravagant payment. The company continued to refuse.

Then one of the company’s big rigs was hijacked at gunpoint. When the company tried to make a police report, the police refused to report the truck as stolen.

And when the company tried to collect on their theft insurance, they were rebuffed again. The Chinese insurance company refused to pay, according to the insurance company, because it was widely known that the truck hijacking was merely self-help by the police to settle the civil dispute.

Here’s a rhetorical question for my business friends: how often do the police steal from you?

3. Opening a business: it takes more than planned.

In a book about doing business in China, I read about of a foreign business in Guangzhoe that made contracts for long-term rent and other necessities for opening their business in China. Then the business bought and installed its costly equipment. With the equipment bought and installed, the landlords tore up the leases and demanded much more than they had agreed to before the business bought and brought in its equipment.

There was no resort to the courts for this foreign business, and they knew it. They were outsiders in the eyes of the Chinese authorities.

4. Criminal conviction: a frictionless conduit to guilt.

An American businessman was at a hotel and fell asleep on his bed while smoking. What should have been a small emergency turned into a life-ending fire because the Chinese fire department took their considerable leisure to respond to the fire call. The American businessman was charged with manslaughter.

He was assigned a lawyer for his criminal case. He was determined to defend himself on the ground that his fault was small compared to the obvious indifference of the fire authorities. But his attorney did not comprehend the concept of putting on a defense. What was the point? she wondered – conviction was a foregone conclusion. She saw her job as pleading for mercy in the punishment phase.

5. Sure: if you’re Apple.

These true stories say a lot about whether China is as easy as Steve Jobs claimed. But, of course, he might in one sense have been right. After all, he was Apple. Apple and other high-tech mega-manufacturers have it easier in China than others might have it.

Famously, China decided to renovate Tiananmen Square by tearing down the old buildings and putting up a new shopping center. Before construction began, China canceled all leases in the old buildings.

One of the victims of this summary cancellation of leases was McDonald’s. McDonald’s, of course, has a high international profile. McDonald’s made a lot of noise, and China relented – no doubt because of the bad publicity that a famous company like McDonald’s could visit upon them. So China agreed to lease McDonald’s space in the new development.

So maybe Steve Jobs effortlessly got fair treatment. Apple is Apple. But in America, we expect that we will be treated fairly, whether we are a multi-billion dollar manufacturing behemoth, or a mom-and-pop daycare center. We are not perfect or close to perfect in that regard. But we are not China.

6. Workers: Suicide.

In 2010, news broke of a high rate of suicide in China’s factory-city that supplied manufacturing and assembly for Apple, Hewlett-Packard, and other big high-tech companies. The factory put a patch on the problem. It hired suicide counselors. And it put up nets so that workers could not kill themselves by throwing themselves off dormatory roofs.

Apple announced that the problem had been solved.

7. America: not China.

So: America should not absorb Jobs’s China-is-easy mentality without serious thought. In America, we have a lot going for us.

We have wage-hour laws to make work humane and reasonably compensable.

We have child-labor laws so that children can be children and not spend dreary childhoods in repetitive assembly-line labor. (When the suicides prompted it to inspect, Apple discovered children working in some of its suppliers’ factories.)

We have courts that more-or-less protect workers’ rights and enforce humane laws against worker exploitation.

We have environmental laws so that we can breath relatively clean air. (This is a genuine problem in China; I know this first-hand.)

So I disagree with Mr. Jobs. Americans have to become competitive and innovative. We need to be smarter and better than the Chinese, not imitators of the Chinese.

There's no easy fix. Restoring our economy has financial, educational, and moral components. The solution will not come from one source. It will take a joint effort of government, industry, and we the people, we the free people.

But this I know: being China is not the answer.

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