The economics of Chinese manufacturing

The New York Times has a detailed investigation into working conditions at Apple factories in China. I think there’s no doubt that Apple’s net contribution to economic welfare in China is massively positive. Literally hundreds of thousands of people have jobs that, while not fantastic, are significantly better than the alternatives.

The Times article fairly points out that conditions in Chinese factories of Apple’s competitors are just as bad, or worse. However, a company that has just made a record $13 billion profit in three months can expect to come under intense scrutiny. Apple tries to be transparent with its supplier responsibility reports, but it seems these are mostly bark and no bite. From The Times article:

“If you see the same pattern of problems, year after year, that means the company’s ignoring the issue rather than solving it,” said one former Apple executive with firsthand knowledge of the supplier responsibility group. “Noncompliance is tolerated, as long as the suppliers promise to try harder next time. If we meant business, core violations would disappear.”

Most interestingly, The Times translated their article into Chinese and posted it on a Chinese website. Some of the comments by Chinese readers were then translated back to English. Most of the translated comments are along these lines:

If people saw what kind of life workers lived before they found a job at Foxconn, they would come to an opposite conclusion of this story: that Apple is such a philanthropist.

Or these lines:

The story of Apple is just an individual case. There will be endless problems from Pear or Banana … even if you revealed Apple’s inside conduct. We have to solve the fundamental problems, which include labor laws, corporate social responsibility, China’s industrial policies and others.