Apr 25, 2012

Understanding Our Chinese Suppliers

In this month’s newsletter, we will look at where China was 40 years ago. Doing so can help us understand the people we buy from.

In 1949, Mao Zedong and the Communist Party took over leadership of China.

Nine years later, Ma announced the “Great Leap Forward,” an economic plan with the goal of rapid increase of China’s industrial and economic production. One of Mao’s stated goals was to exceed the production output of Great Britain, then one of the dominant economic powers of the world, by 1968.

Almost all Chinese villages were transformed into communes, where workers lived and worked together. Rather than create steel mills for his industrial base, Mao dictated that “backyard steel furnaces” would be employed. However, these backyard furnaces were incapable of producing the high temperatures needed for steel production, with the outcome that the raw material was worthless and unsellable. Famines ensued; it is estimated that 20 to 40 million Chinese people died during the “Great Leap Forward.”

After this catastrophe, Mao’s grip on power got a little shaky. A group of three men (Deng Xiaoping, Mao’s eventual successor, Liu Shaoqi and Zhou Enlai) began to set new direction for the country that was occasionally at odds with the Marxist theory Mao espoused. Farmers who had to give all their crops to the State during the Great Leap Forward were now allowed to sell surplus crops for profit. Street vendors were permitted. Mao began to complain that “the capitalists and landlords” were regaining power in China.

In addition, Mao believed that Nikita Khrushchev’s deStalinization of the Soviet Union was a retreat from Communism, and he wanted to insure that China did not follow the same path.

Mao’s answer: to lead China into a new and greater “revolution.”

Thus, in 1966, Mao launched the “Cultural Revolution,” to “cleanse” China of all anti-socialist persons, programs and thought. Anything and anyone who was in the least way suspect of being opposed to Mao’s vision of the “ultimate socialist society” was to be purged, from the top echelons of government and society down to the peasants. No one was safe, including those who were high up in the Communist government. Deng Xiaoping was exiled to work in a machine shop. Liu Shaoqi was sent to a detention camp where he later died.

A man named Kang Sheng engineered the method for how China’s 1+ billion people would be “cleansed.” Middle, high school and university students were encouraged to affirm their allegiance to Mao by joining the newly formed Red Guard. Members donned red armbands with the words hong wei bing in yellow—Chinese for Red Guard. Their targets were teachers, party officials, any remaining religious leaders (when the Communists took over in 1949, atheism became the official religion of China), “rich peasants,” landlords, or anyone who might be “counter-revolutionary,” that is, in the slightest disagreement with Mao Zedong.

Overnight, millions of students joined the Red Guard. Teachers were beaten, sent to prison, or killed. Schools from middle school to universities were shut down. “Beating sessions” for those who were accused of disloyalty to Mao were organized in Beijing sports stadiums, where attendees witnessed brutal beatings and killings.

All independence of thought apart from the communist regime was to be stamped out. Art and culture were reduced to a few “revolutionary” plays. Anything that even looked capitalist was destroyed. No ornamentation was allowed anywhere, including the buildings; bicycles even had to be painted black. Men and women alike wore the same “Mao suit.”

“Revolutionary Committees” of Red Guard youth took over local governments, but had no idea of how to govern, leaving cities without a functioning government or public services. Medical care became scarce, as many doctors were “purged.”

It got so bad that Red Guard youth got into fights with each other over who was more loyal to Mao.

No one dared say a word against Mao Zedong. Doing so could get you beaten, imprisoned, or killed. Estimates of the death toll from the Cultural Revolution are in the millions.

By 1969, the country had descended into total anarchy, and the military was called in to restore order. The Red Guards were phased out. The Cultural Revolution lasted until 1976, when the country started to pick itself up from the ashes of a decade of self destruction.

When I first traveled to China in 1986, I was struck by how gray everything was. Buildings were dreary and drab; restaurants would often only have a small percentage of the items shown on their menus. Men and women alike were dressed in blue or gray Mao suits. Shortage of raw materials was a constant problem. All of the trading companies and factories we dealt with where government–owned; private enterprises were illegal.

When I would ask the Chinese people what they thought about Mao, or parts of their history, many would refuse to comment. 10 years after the end of the Cultural Revolution, the nation was still locked in fear.

The China of today, of course, is nothing like the China of 25 years ago. Privately held enterprises abound; the national economy is on a rocket–like trajectory. The Communist Party is still the only game in town, but China’s people have more access to information and can enjoy more personal freedoms than before. In spite of the current regime’s control of religious freedom, it is estimated that there are somewhere between 50–100 million Christians in China today.

Why bring all this up in a newsletter about sourcing from China?

To help us see that China is a country that is just 30-35 years removed from the trauma of national self–destruction. Although not as common as before, there are still instances when we go to source a project in China where the resources or technology do not exist. Occasionally, answers to simple issues such as whether a promised delivery time will be met come slowly… in pieces. While the Chinese culture’s “Protocol of Face” can prevent them from dealing with face–losing news in a forthright manner, I can’t help wondering if some of this is the hangover of a time when saying the wrong thing could get you beaten, imprisoned, or killed.

In the Western world, it’s easy to assume that the overseas suppliers we do business with think like we do, and have the same resources available that we do. In our land of freedom, security and comfort, the reality that the people we trade with had their nation turn on them a generation ago, with devastating effects, doesn’t often cross the radar of our awareness.

China is still growing and coming into its own. For the Chinese people, where they are today must feel like a fresh drink of cold water in the desert, compared to their not so distant past.

Sources:

  1. The New Emperors; A Dual Biography of Mao and Deng, by Harrison Salisbury.
  2. Wikipedia; Cultural Revolution, Mao Zedong.

October Shutdown

Chinese companies are closed from October 1–7 for their National Day holiday.

Please keep this in mind when planning shipment schedules.

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Rate when the Yuan was depegged from the dollar on June 19, 2010: 6.82 to 1

Change: .44 (6.4%)

About Us

Since 1991, Global Trade Specialists, Inc. has helped companies of all sizes get their products made in China from manufacturers of quality products. We are an American company who works with three trading groups in China with immediate access to thousands of manufacturing companies. We source most products made from metal, plastic, wood, stone, glass or textiles; from prototype to production. Many of our customers are first time importers; we walk you through the entire process.

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