Just finished reading Jeremy Haft’s book, Unmade in China: The Hidden Truth about China’s Economic Miracle.

Let me start by saying that I greatly enjoyed it and I learned a lot from it. It made for a fast and easy read. It was just released and its timing could not have been better because one of its main themes is that China’s economy is not nearly as robust as is (was?) so widely believed. It helps explain some of what is going on with China’s economy today.

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The book sets out to debunk the following three “myths.”

  • China’s Economy is about to surpass the U.S.
  • Everything is made in China
  • China’s currency manipulation kills jobs

One of Haft’s big themes is that we tend to give far too much credit for the good that comes from China and fail to realize how much bad comes from China, especially when it comes to product manufacturing. Haft plays up how so much of what is manufactured in China is really just assembled there from components made elsewhere. He also highlights how so many of the products China makes are of abysmal quality.

Take baby formula in China. Please. Haft questions why we should expect china to be able to develop and build high end nuclear power plants or airplanes when it cannot even make safe baby formula. Haft sees China’s inability to make good products as an opportunity for US-made products and services to thrive in China.

I agree and I disagree. All that Haft says about China products is true, but at the same time, more and more China designed and made products are competing worldwide. Are these top of the line products? Very very rarely. But they are oftentimes quite good products produced and sold at lower prices than their competitors. And what about all the made in China products we buy every day that work just fine?

Unmade in China did an excellent job of debunking the notion that China’s economy is a juggernaut surpassing that of any other country. I recall reading once how a majority of Americans believe China is already richer than the United States. Haft very nicely takes apart this notion using cold hard facts.

He notes that the United States has $40 trillion more in household, corporate and government assets than China. In other words, the United States is a way, way, way richer country than China. Anyone who has been to China would readily agree on this. And in terms of China’s economy going forward, Haft sees it growing old before it grows rich.

Haft also does a good job (though he is certainly not the first to do this) of highlighting how so much of the revenues and profits from products that are made in China actually goes to the US. He writes of how nearly all of the revenues/profits from a $70 pair of US-branded sneakers made in China goes to the U.S. companies that designed them, handled their transportation, warehousing, advertising and retail costs. He does, however, neglect to mention that Chinese and other foreign companies are increasingly taking on some of these ancillary services tied to products. For example, warehousing of products is increasingly being done in China as is the transporting of products on Chinese made and owned vessels with Chinese crews.

Though Haft does a good job on a micro level explaining how the United States benefits from using China for so much of its product manufacturing, like so many “China people” (this blogger included), he too often glides over the bigger picture. Haft’s arguments very much remind me of a Forbes article, entitled, One Way To Save U.S. Manufacturing Jobshighlighting a small Midwest windmill company that had unequivocally saved American jobs by moving a large portion of its production to China. The genesis for the Forbes article was one of our posts, China. Friend Or Foe? Opportunity Or Challenge? Or, Why Can’t We All Just Get Along? detailing how our client had managed to save the jobs. All good, but if there were no China, this company would never have had to send any jobs to China in the first place.

But what about on a macro level? Does sending manufacturing to China really help the people who 30 years ago would have worked at a factory making $20 an hour plus benefits, but now work at a fast food stand making $9 without benefits? Does sending manufacturing to China strengthen our country? Does anyone really believe that China will not slowly but surely keep closing the gap with the United States on product quality? What will happen then?

Overall though, I very much liked Unmade in China and I see it as an important and accurate counterweight to so much of what is written and believed about China. It is the perfect book for right now

Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network. 

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.