The Price of ‘Made in China’

The Price of ‘Made in China’, by Peter Navarro.

Here is a symbol of China’s assault on the American economy: the Verrazano-Narrows Bridge, which connects Brooklyn and Staten Island. This landmark, which opened in 1964, is North America’s longest suspension bridge. It’s also in urgent need of renovation. Unfortunately, $34 million in steel production and fabrication work has been outsourced to China. …

The real problem with this deal is that it doesn’t take into account all of the additional costs that buying “Made in China” brings to the American table. In fact, this failure to consider all costs is the same problem we as consumers face every time we choose a Chinese-made product on price alone — a price that is invariably cheaper.

Consider the safety issue: a scary one, indeed, because China has a very well-deserved reputation for producing inferior and often dangerous products. Such products are as diverse as lead-filled toys, sulfurous drywall, pet food spiked with melamine and heparin tainted with oversulfated chondroitin sulfate.

In the specific case of bridges, six have collapsed across China since July 2011. The official Xinhua news agency has acknowledged that shoddy construction and inferior building materials were contributing factors.

Chinese steel is heavily subsidized:

There is a second reason not to buy “Made in China” products: jobs. The abiding fact is that steel production is heavily subsidized by the Chinese government. These subsidies range from the massive benefits of a manipulated and undervalued currency to the underwriting of the costs of energy, land, loans and water.

Because of China’s subsidies — most of which are arguably illegal under international trade agreements — its producers are able to dump steel products into America at or below the actual cost of production. This problem is particularly acute now as China is saddled with massive overcapacity in its steel industry.

Chinese steel fails strength test, by Aaron Leaman in NZ.

Roading bosses are defending their quality control standards after 1600 tonnes of Chinese steel destined for a major Waikato project was found to be below standard. The substandard steel piles were to be used on four bridges along the Huntly section of the Waikato Expressway.