Monday, August 27, 2007

Are We at War with China?

I stumbled on this editorial in a list of news articles that came via a key word search that runs every day for me.

Now Johnstown, PA isn't exactly the hub of America, but this guy has said what I have been thinking for a while. With all of the ongoing problems with products made in China, I have to wonder if we are being probed for a new kind of warfare. Consider that Wal Mart's quest for low prices (see "The Wal Mart Effect") has moved a tremendous amount of American consumer product manufacturing offshore. You cannot go anywhere and buy nearly anything that hasn't been manufactured in China. The latest lead paint episode has effectively destroyed Mattel's Christmas -- if not because the products are going to be off the shelves, but because their reputation has been incredibly tarnished. It will take Mattel quite a while to overcome this -- and with profits for an entire year wiped off the books.

So think about that... in your wildest Tom Clancy scenario, imagine a country deciding to wage war economically. A few serious problems with products manufactured for American companies could put those companies out of business. I worry, frankly, about cell phones that explode or catch fire due to defective batteries. A few people seriously hurt or killed by cell phones could put my employer out of business. And what is true for Mattel or or Colgate or Motorola could be true for Black and Decker or Proctor and Gamble.

Then imagine a concerted effort to poison the food supply or cosmetics industry. Look at the results of the dog food scare. Imagine thousands of people becoming ill. Or something besides lead paint (which is bad enough) in toys.

Now look at Chinese investment in American companies. I read something this morning about a Chinese company wanting to buy Seagate. What if they embedded some code in a hard drive that "phoned home" with your personal data?

Yes, you could bring America to its knees with a well-orchestrated series of events that struck at the credibility of American companies and the safety (or security) of manufactured food and other products.

This is an effect of flattening the world. It is one of the most serious potential negative effects. But it could also simply be paranoia. I don't intend to sound like a xenophobe, but I'm wondering if our quest for low prices has swung the pendulum entirely too far.

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