University of Washington, Geography 249: Response Paper 4

Response Paper 4:
“China Makes, the World Takes” by James Fallows

Write very short (50-150-word) answers to each of the questions below, based on your reading of the article and any insights from the class so far.

1. What considerations beyond low wages lead international capitalists to invest in and/or contract with Chinese manufacturers?

2. Note at least three difficulties for a US-based company trying to arrange for production of its designs in a Chinese facility that it does not own. How does Fallows’s informant Liam Casey try to overcome those difficulties? Despite these difficulties, why might a US-based company contract with a facility in China rather than operate its own facility in China? (This will have to be speculative on your part, but try to come up with three reasons).

3. According to Fallows and his informant Liam Casey, what types of products are most advantageously made in China rather than nearer their Western markets? What kinds of companies can best make use of contracting production to Chinese companies? What kinds of companies can make the most profit from this arrangement? What does this suggest about the sources of comparative advantage in China? The sources of comparative advantage in the US?

4. In addition to contract production, what can Chinese companies provide for Western manufacturing companies?

5. What distinctions does Fallows draw between (a) the current economic relationship between China and the US and (b) the late-twentieth-century relationship (especially in the 1970s and 1980s, but continuing today) between Japan and the US?

6. If the Chinese currency finally rises in value against the US dollar, what implications does that have for Chinese manufacturing? For US-located manufacturing?