Companion forum thread to:

Made in China - A State of the Market Report

I think this was all spot on. Now, if only I could suppress my desire to buy more hiking gear...

-jim

Roger, thanks! We've been needing an article like this for a while. Good depth and analysis.

I am a backpacker of 40 yrs and an engineer of over 25. I have done business with and in China. I truly believe our downfall will be our greed in wanting the most the cheapest. My experience in China has been that intellectual property has no meaning nor do patents. If you manufacture in China expect to see corners cut in quality and in materials. Expect to see counterfeit goods. I have read of cases of counterfeit climbing cams on the big online auctions site. Any one want to take a whipper on one of those?
Should we expect that gear our lives can depend on should be 100% Quality from a country that does milk products with melamine to save money? Propylene Glycol (anti freeze) in tooth paste?

From an engineering perspective with modern technology the labor content in most outdoor products is fairly low. So that is not the real excuse to manufacture overseas.

I like my toys too. And I like a good deal too. But I remember when most of the gear came from California or other places in the US.

If we do not push retailers and companies to sell products made here than at some point we will be all out of good jobs.

As a soldier I am ware of the difficulty that the Army and Marines had in tooling up for the current conflicts. Soldiers are the original backpackers in a way. So it is a bit scary that they almost had to go offshore for field gear for the spec ops boys.

Just something to consider. Because if all we do is farm the design work to India and then make it in China then buy it here where will we be in 20 yrs?

So if there are any of the big players out there reading this like BD, TNF, OR and others, look to the US to set up your factories. Maybe then you will have to contend with less counterfeit items on E Auction sites. I know my local retailer of TNF once received a box of counterfeit TNF in the normal shipment.

As light weight and ultra light weight backpackers we operate in a semi extreme sport with a narrow margin of safety. I would prefer to know with certainty my gear is good.

As an engineer who has had 6 plants I have worked for or with close and move to China or Mexico I would like to think that I can retire or at least work til I need to retire somewhere besides Meglamart.

One other thing that we should all consider is the human cost to buying from China. I have been to the factories there. Safety is an idea not any reality, and the environment is nothing more than a dumping ground. The air was foul and the water in the rivers toxic in eastern China.

Is the future we want to leave one of unemployment pollution?

I am not slamming free trade just saying we need fair trade and to take into account the full costs.

Ok off my soap box and on to the trail.

Have a good weekend.

What about the impact on American jobs all this outsourcing has had? How much more products could be sold if people weren't unemployed here? I speak from experience as I am currently unemployed. If I still had a job, I'd have completely revamped all my backpacking gear, but I can't afford to, even at the prices of stuff made in China. So companies have lost a bit of custom because I don't have a job; the reason I don't have a job is because the work - medical transcription - has been outsourced to India.

Another consider, vis-a-vis clothing, is fit. Asian people are much smaller than Americans. Chinese-made clothing fits weird and tends to run very small.

I think I will stick to an alcohol stove - no moving parts to worry about. I don't trust the quality of liquid gas stoves that are made in China. A stove can be a dangerous piece of equipment if it's not manufactured properly. I have no desire to end up in a burn ward because the company was being cheap.

I remember when this push for globalization began. I remember our corporatiions reassuring us that, because they would save so much on labor, they could pass the savings on to we, the consumers, and everyone would win. Hah! What I see are people slaving in sweat shops for pennies in other countries, and the items they make being sold here at 1,000 times what the company paid those workers. Case in point: athletic shoes. Where are all the savings we were told about? They are going into Mr. CEO's pockets.

Get back to manufacturing stuff here in America so people have decent-paying jobs and can do what drives our economy: buy stuff. The only ones who really win in the global market are the CEOs and their major stock holders.

James Fallows wrote an interesting article about Chinese manufacturing in The Atlantic a couple years ago: http://www.theatlantic.com/doc/200707/shenzhen

One of the interesting things it mentioned was that the Chinese consider themselves fast, not cheap. By that, they mean that they can change their design quickly. This makes sense. Modern manufacturing can involve lots of machines (including robots). No matter how cheap the labor, the machines will always be cheaper. But it takes a while to design the machine to the specification. If the specification changes, then it will be a while before the new machines are ready. That is why so many manufacturers decide to go with cheap labor instead of expensive labor (using fancy machines).

If consumers were more tolerant of static and simple design than more or the work would be done by skilled labor using more expensive machines. The biggest example of this is probably shoes. There is no item that I regularly buy that frustrates me more than shoes. The designs are ridiculously complicated, but I have very little choice in the matter (the makers assume I want a complicated, frilly design). Most athletic shoes are like this. The exception, of course, is expensive, high end hiking and climbing shoes, where styles are much simpler (and function is more important).

On a different note, I'm not so sure that the Chinese will follow the same path as Japan, Korea, etc. Those countries all had strong democracies (or they acquired them at some point) and/or strong labor unions. That has really been the pattern for the countries that have established a strong middle class (whether in the East or West). Since China is not a democracy and labor unions have little power, it isn't clear whether they will ever establish a strong middle class or whether they will continue down the route of Mexico, with a handful of successful wealthy people and huge numbers of poor ones. It is too bad that more of the developed world hasn't taken advantage of the approach that worked well for Cambodia. Basically, in return for favorable trade incentives, the Cambodians instituted strong labor laws (http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=108&subsecID=206&contentID=250179). There were some flaws, but in general this seems look a good model for trade between the developing and developed world.

OK, now someone else can use the soapbox.

I can't wait to see what everyone has to say! Should be really volatile reading!

Roger - good article with excellent tangible examples related to backpacking light. Thanks.

All - here are some numbers, big numbers, concerning three of the countries mentioned in the article...

China
$4 Trillion (T) is their Gross Domestic Product (GDP)
Their exports are $1.4T and imports are $1T
800 million is their labor force
from a 1.3 billion population

USA
$14T GDP
exports $1.3T and imports $2T
154 million labor force
307 million pop

Australia
$1T GDP
exports $190 Billion and imports $193B
11 million labor force
21 million pop

===============

Note that USA economy is over 3x China's, USA exports
are big too, China has over 5x more workers than USA.

===============

In the future, 20 years, 50 years, 100 years, is USA going to have Australia numbers or is China going to have USA numbers, or both?

About five years ago, I saw a formal US Department of Navy request for quotes for gear to outfit a SEAL team. The items were very specific: so many pairs of Scarpa T-2 telemark boots in these sizes, so many Black Diamond gloves, and several variations of Mountain Hardwear Trango tents. It was once common practice for the US military to only buy items either manufactured in the US, or barring that, in a NATO or other defense partner country. The Scarpa boots meet that requirement, but I have no idea what the procurement officer would have said if he/she knew that the gloves and tents were made in China. Political concerns aside, the made in China items are indeed among the best for the stated purpose, and are designed by US firms.

One interesting trend I've noticed is with Patagonia hard shells. In the early '90s, the tags would say made in either Japan or Hong Kong. Then production shifted to the PRC, and now most all of the product line is manufactured in Vietnam. Patagonia has contracts with the US military for long johns, fleece, and both soft and hard shells. The capilene is mostly still made in the US, as is some of the fleece. But other fleece items--and the Dimension parka--carry made in Colombia tags. And some of the ranger green Patagonia items (such as the Houdini or the Mixmaster pants)are made in China. Despite all this moving around, there is no discernible difference in quality. I'd say the same for Arc'Teryx jackets (once from Canada, now China) or Bibler tents (from the US to China). Black Diamond skis were once made in the Atomic factory in Austria, and I know from bitter experience that the quality control was poor in at least one batch of 180cm Havocs. All indications are that the new made in China BD skis are fine.

Vietnamese made Osprey packs seem to have the same quality as those I have from the early days in Santa Cruz or the later move to Colorado, and truth be told, the quality control on Feathered Friends and Western Mountaineering items are hit and miss--despite their US made status.

And how about Valandre moving production to Tunisia, or Rab touting its British heritage, but hiding the (at least on my Summit 900 down bag) country of manufacture very deep inside the interior?

I enjoyed the article, though I question if China's advantages are sustainable. Inexpensive labour will be less of an advantage as local costs rise, while greater automation outside China may offset this(tax law willing) and at the same time maintain a real quality differential. However automation may not apply to outdoor gear with small runs and frequent change. Another factor is the hidden cost of air and water pollution. On a subjective basis, these seem to crop up much more frequently in recent years. I live in HK, so am relatively exposed to China-centric news, though this is just casual observation. I wonder if there may be a tipping point which could force the central authorities to enforce the rules quickly. I am not sure if environmental rules were ignored in Japan or Korea when manufacturing first developed, so it would be interesting to hear from someone on this.

> I question if China's advantages are sustainable

The simple answer is 'No, of course not'.
But you have to remember that the Chinese domestic market itself is huge. That is going to influence things in ways we do not fully comprehend yet.

From a different perspective, I think we can expect many things to turn around eventually. The cost of labour in China will rise of course, and the cost of automation in the West will fall. At some stage companies are going to look at the indirect costs of distance and shipping delays, language hassles, QC (a disaster most of the time today) and product knowledge, and many will decide to retrieve their manufacturing. But when?

My 2c.
Cheers

Unless cheap labor is found on Mars, then companies will run out of places to go.

When will it stop? When governments have to step in due to mass unemployment at home. Either that, or another world war to 'create' new markets, and thin out the unemployed.

I have been a BPL member for years and have learned so much from so many of you. I never felt I had much to offer to most threads, given my lower level of expertise. I still don't have much expertise, but do have a strong opinion on this topic.

My first post, for what it is worth.

When I purchase gear for my hobbies I ALWAYS try to find an alternative to items made in communist countries. I have nothing against the citizens of China, Vietnam, or other communist countries, but I have a big problem with their governments. Our country has fought wars, and many Americans have lost their lives in an effort to reduce the power of communism. Why do we know feel we should enrich these same countries? Did we move our business to the Soviet Union during the cold war? It would likely have been cheaper, but I doubt American consumers at the time would have supported "made in Soviet Union". Vodka aside of course.

How many times are we going to hear about poison being used to replace more expensive ingredients to cut costs, before we revolt against buying products from these countries? They allow their own citizens to be poisoned without taking action to protect them. Do we really think that they are looking out for our safety? How much lead/mercury is being put in our products without our knowledge? Are our major companies that are producing their products in China/Vietnam testing them for these issues? We already know they are not, and will not, unless we demand it.

We as consumers still have options, but they are dwindling day by day. We must support products made in countries that care about quality and safety, it is in our best interest after all. What will it be like in 10-20 years for our children? Will they be forced to buy products made by our political enemies, that could be poisoning our people?

I realize that many of the products that we buy have very low risks of being tainted (clothing, shoes, etc) but we as consumers must send a message to our companies that there is a viable business reason to keep making products in democratic countries. I for one will continue to boycott, as much as possible, products that are made in countries where the government ultimately means us harm. China remains a communist empire that is taking advantage of our desire for cheap products, and using the money made to become a more and more powerful enemy. Do we really expect them to magically become a democratic member of society, just because they become more and more wealthy?

Don't buy "made in China"!! Tell your friends and family the same. One at a time we can make a true difference as consumers. We still have a choice, but for how long?

Please don't assume that I am some right wing loony from this post, as nothing could be farther from the truth. I just feel that we can still make a difference if we act now. I am also not a "protectionist" unless that term means that I am trying to protect my family and yours from unsafe products.

Sorry for the rant.

>> How many times are we going to hear about poison being used to replace more expensive ingredients to cut costs, before we revolt against buying products from these countries? They allow their own citizens to be poisoned without taking action to protect them.

China quite regularly executes people who commit dangerous industrial fraud on the order of the tainted milk or toothpaste incidents. In fact IIRC the milk guy committed suicide to avoid a bullet in the back of the neck and a trip to the organ harvesters...

Which in itself is kind of a disturbing practice...

Honestly, I haven't thought about this issue that much. But:

Yes, China has an awful human rights record. Yes, they are an oligarchic communist country with a proud history of underhanded activities (like shooting down airliners (but then so does the US Navy)). But I'm NOT sure that 'communist' automatically equates with 'enemy' anymore. Many ostensibly communist countries are undergoing rapid democratization since the fall of the Soviet Union. Show their citizens the good life of the West, and they abandon that nonsense pretty quick. Part of that is trading with them.

Even China.

Would I have preferred that Tienanmen Square had led to more reform? Of course. And reform will come to China. If nothing else as technology advances they cannot keep their current level of censorship up forever, and as information in China becomes free and the government can't keep their dirty laundry secret any more the citizenry will force change. Even if their standard of living is decent.

Although I don't have access to this article, the comments are interesting. However, I partly disagree that China is technically "Communist" anymore as over half of their GDP is produced in the private sector without government intervention. There are many many upwardly mobile (and downright poverty stricken ) Chinese citizens, just as there is in America and most other "western" countries.

However, as a rapidly developing country I absolutely feel that market pressure needs to push China (and India etc...) to produce goods that are of a suitable standard and minimal environmental impact. Basically we need to help developing countries (not just "Communist" ones) to raise their game. How we do this is a puzzle to me...China is soon to be the biggest English speaking (and capitalist) nation on earth, followed by India, so it shouldn't be that hard to communicate our consumer gripes and complaints and have them understood.

Hi Lynn

> China is soon to be the biggest English speaking (and capitalist) nation on earth,
> followed by India, so it shouldn't be that hard to communicate our consumer gripes
> and complaints and have them understood.

I'll pass on whether either China or India speak the Queen's English ... (check any call centre)

But I will comment on your assumption that it might be easy to get the Chinese to listen and act on complaints. I know people who have worked with and in China, and they would either roar with laughter at your comment, or break down into pathetic hysterical sobbing. Probably the latter. Sigh - they have a LONG way to go.

A friend of mine had to return an entire shipment of jackets once: they had sewn the sleeves on back to front.

Cheers

I noticed that American's sense of entitlement was mentioned a few times in this article, and one has to only look as far as the United Auto-workers Union to see a perfect example of this.

Unions killed a LOT of manufacturing in America, and if you ever worked for or around one you understand this. Union promote horrible work ethics where people who perform and punished rather than rewarded, and their work is often substandard but they DEMAND the same pay & benefits of a skilled, educated professional just because the live in America.

Remember not so long ago 'Made in Japan' was avoided as a synonym for shoddy?

No longer; these days Japanese build is the benchmark. Why? Because they needed the American consumer market in order to survive.

Export or die; that is what drove the Japanese. They needed the world market, particularly the American consumer market.

It will be fascinating to see if the drive for quality which we saw in Japanese manufacturing [ just think cars and cameras ] will flow on to the Chinese.

China may be ruled by a communist government, but they have a real challenge to turn their vast domestic market into a competitive mercantile capitalist society.

They can't have it both ways; that is what will be fascinating in the next few decades. Will a growing Chinese middle class demand better quality goods along with greater personal freedoms?

"Will a growing Chinese middle class demand better quality goods along with greater personal freedoms?"

Absolutely. It is already happening on a large scale. Our country is a very popular destination for young Chinese to come and go to English schools, undertake post graduate diplomas, medical training and employment without many restrictions. They leave with a world class education and a good grasp of English. They all bring laptops, cell phones, PDAs, iPODs etc...and are very bright and hard working people. They take on new suggestions and ideas happily and work hard to get a good result. They are just like us.

I really believe that China WILL undergo a drive for quality, safety, fair employment and environmental awareness, but it won't happen over night. It is a Communist government that encourage capitalist expansion and profits. It it really a Hybrid political/economic society that is trying to evolve with the times.

China is indeed still a communist nation (making money, but still communist). When was the last time a democratic vote took place (even a rigged one)? What power do the people have over their leadership? Disobey, get shot. Organize a group, they bring tanks.

The communist leadership has in the past opened the door to "capitalist" opportunities that they felt were in their interest, only to slam the same door shut as soon as they felt it had gotten out of hand. This will likely happen again, we will see. An uprising is unlikely given the size of their military-literally millions of soldiers.

As far as the amount of GDP coming from capitalism, I respectfully disagree. Most western companies attempting to do business in China are forced (by government intervention) to include Chinese partners (usually at 40-50% plus levels) in all business activities/profits. This does not happen here (USA, and all allies that I can think of), and puts our "democratic" businesses at a significant disadvantage. This is not capitalism, it is a communist government taking advantage of our desire to spread our "capitalist" ideas and consumer society. Do you really think that the senior leadership in China is moving toward democracy? We should not underestimate their intelligence by believing that they will all of a sudden change their way of doing things. They have done things their way for much longer (thousands of years) than we western allies have. They know exactly what they are doing.

My overall impression of the idea of "backpacking light" is a return to simplicity (and of course light weight), which I completely agree with. Why not simplify by buying less, but buying "democratic"?

You may spend more per item, but will be
1. supporting allies/democracy
2. combating, instead of supporting, significant human rights issues
3. not filling up landfills with disposable junk (how much made in china crap have you just thrown away because it is so cheap to replace)
4. most likely be buying higher quality products that will cost you less in the long run

Not to mention not buying products that could contain poison. Let's not forget all the instances of products being found here in America with "outlawed" substances made in China. Remember the recalls of toys over the years? If you poison children you have absolutely no regard for anything but evil. How many things do we have in our homes that were never tested? Some people have homes that were built with this stuff-see Chinese Drywall. I am sure that none of us think that our government is actually capable of protecting us from the millions of products that we import. How many of those things do we touch, drink from, eat off of, etc?

I'm just saying take where things are made into account. We consider need, price, ounces/grams, color, size, among many other things. I am arguing to take the origin of the products we buy seriously, as it really does matter in the long run.

The United States is seriously in debt to China (#1 holder of US Government bonds) so do not expect our leadership to actually do much to upset our landlord. We as individuals are left to do what we can.

Off soapbox.