Philippine-China conflict: How did we come to be so dependent on Chinese imports?

Last weekend Governor Joey Salcedo of the Philippine province of Albay issued what on the surface looks to be a ludicrous proposal — that Filipinos “boycott” Chinese-made products. Salcedo made this call to Filipinos to “hurt [China] where it counts” in light of recent military and diplomatic tension between the Philippines and China over the disputed Spratly Islands. Salcedo’s statement (and any other similar call made by others) was largely dismissed by Malacañang presumably amidst fears of further exacerbating already hairy relations with the regional superpower.

Even the infamously Maoist orgainisation, the League of Filipino Students chimed in with its chair Terry Ridon highlighting Salcedo’s words as describing an “unrealistic proposition.”

“It would essentially render most of us naked with meager foodstuff and no appliances at home and in the workplace,” said Ridon.

The LFS leader said he was “betting [his] bottom peso that even (Salceda’s) office would cease to function in such a boycott.”

Indeed, it likely would. Almost everything from nail clippers and plastic pails to computers and heavy machinery now bears the label “Made in China.” The better question to ask, therefore is this:

How did we come to be so dependent on Chinese imports?

We, and much of the rest of the world, are dependent on Chinese goods. Even “fresh” vegetables and seafoods are imported from China. The scale of this dependence is astounding. Products that can otherwise be manufactured by applying even the primitive industrial technology of Filipinos are shipped hundreds of miles from the Middle Kingdom.

The irony that escapes most of those who now seek to demonise the Awakening Giant in our midst is that all of us created the monster that is today’s China. It is a story not too different from the one where America and the insatiable appetite for stylish personal transport that it exported to the rest of the world created the global nightmare called Arab politics. This is our version of the story in the Far East. China is the Creature from the Black Lagoon that was roused by our perverted notion of what it means to be a “prosperous” society — larger and larger numbers of us being able to “afford” more and more nice but disposable things.

If our idea of “prosperity” is to keep consuming and disposing and keeping that orgy of waste “affordable” by “outsourcing” our supply to countries like China who are able to churn out mountains of products “cheaply,” then we are headed for trouble. Already, the United States, not to mention the Philippines, are racking up trade deficit upon trade deficit in favour of China. And in societies like ours and the U.S. where capital flow had long ago been delegated to the devices of the “free market”, it is the interests of the primary channels of this flow — multinational corporations — that now trump all the rest. And China is reaping the rewards offered by this current world order even as its own government reserves key control over that same flow of capital to itself (in an affront to the very system that created its new-found global power).

Multinational corporations have only two objectives — to sell stuff at a profit and sell larger amounts of it every year. To whom they sell these and how they parcel out the cost-incurring facilties to produce this stuff across the world is merely incidental — whatever works. The key message to its customers to convince them to buy all this stuff is also quite simple: you can afford it.

The amount of stuff people can ‘afford’ nowadays has grown. Take airfare, for example. In the past, frequent air travel used to be accessible only to relatively wealthy people. Now with budget airlines and all, even lower middle class people in advanced societies are able to take overseas holidays more than once a year, or fly for domestic travel instead of taking the roadtrips that used to be more of the norm in the past. Trouble is, aviation accounts for a disproportionately large amount of greenhouse gases added to the atmosphere annually. It delivers a bigger impact to the environment than land transport on a per passenger-kilometre basis.

In any case, more people are able to afford cars now as well. Households with an almost one-to-one ratio of vehicles per household member are now common in advanced economies. The decline of public transport in many U.S. cities, particularly in California is the result of the lobbying power of the auto industry which practically coerced politicians to channeling funds into road building rather than on public transport infrastructure such as rail. More affordable cars resulted in the public caring less about the decline of public transport services.

I have nothing against rich people being entitled to luxury. But I have an issue with ordinary people being led to believe that they are entitled to own unnecessary stuff and consume excessively. Corporations have all but convinced people that they can have things right here and right now. There is something not right about a society that believes in that philosophy. Self-importance seems to be a human condition that shrewd marketing has so effectively exploited nowadays. There is of course a price to pay for getting things fast and cheap. And we are seeing the effects of our fast and cheap way of life today.

Then there is our ballooning numbers. Was it right for us to multiply to the numbers we see today? The U.S. for example is fed using super-species of corn that is grown using artificial fertilisers that are manufactured from fossil fuels and the runoff of these fertilisers is contributing to the degradation of water supplies. The sheer size and production volume of U.S. farms are made possible by industrialised farming techniques and machinery that burn large amounts of fossil fuel as well.

These farming technologies did contribute to reducing hunger in the U.S. but then it also contributed to an increase in population to the point of complete dependence on almost irreversibly petroleum-fuelled agriculture. Softdrinks and other sweetened drinks are cheap because they are sweetened using byproducts of industrial corn production (fructose I think it is).

It’s like the way computerisation promised the advent of the paperless office. But look around today’s offices. People are not only printing and copying documents more, we are also starting to get addicted to colour printing, which consumes far more and produces larger volumes of waste products.

I don’t think there are any hard figures that tell us when consumption is excessive. But there are several principles at work around which the concept of “consumption” may be regarded:

(1) Consumption as driver of economic indicators

Exchanging goods for profit (i.e. trading in the original sense) adds value to the product of an economy (as measured by, say, the GNP or GDP). Every dollar earned in a transaction adds favourably to the Gross National Product (GNP) statistic of an economy. A person who buys a sack of rice for $5 then sells it for $8 adds $3 in “value” to the economy.

So in a sense, when lots of people are buying and selling in large quantities, as when “consumption” is said to be “healthy”, it is good for economic indicators because those activities contribute “value” to the economy. But then, what exactly is the substance behind that “value” I described above. Does the $3 in “added value” to the economy in that sack-of-rice transaction I used in the example above actually represent something tangible actually produced out of that transaction?

Multiply that a thousand fold into the aggregated way we measure “economic performance” and you will see that economies that merely exchange goods and gain profit but add little actual substance to what’s been exchanged can have as much chance to look good statistically as those economies that actually produce tangible stuff.

(2) Consumption in terms of what motivates it

Just because something is cheap or free, doesn’t mean we should wantonly consume it. Chairs and tables were once highly prized because the labour that went into building them was very tangible — you either built them yourself or you bought them from the village furniture maker who you personally know. Today, chairs and tables are manufactured by the millions in highly mechanised factories somewhere in China. They can be bought for just a hundredth of the cost of the furniture that our great grandparents used.

Whereas our great grandparents cherished their furniture and used them for years (even passing them to the next generation), we see ours today as mere fashion statements at worst. They last a few years and even if they are still good enough to use, we don’t think much of disposing of them to buy a the latest trendy set when it suits us. That’s because we can. But the question is, should we?

Today’s chairs and tables come cheap because our financial/monetary system tells us they are cheap. Trouble is, the financial system has been found to be incomplete as a scorekeeper of value and cost. It fails to account for the cost to the environment that our ability to manufacture stuff by the millions levies on Mother Nature. Because these millions of tables and chairs are “cheap” we dispose of them in larger quantities after shorter and shorter times of use. Our ability to manufacture in great quantities is enabled by our dependence on fossil fuels and our lack of accounting for the cost of disposing these throw-away products. Compare that to a time when no such manufacturing prowess existed and people had to hand-make stuff only in quantities that meet their needs.

So are we really improving our lot overall? Or are we simply improving the efficiency at which we consume — and waste?

(3) Consumption as an inherent property of our civilisation

No one element in the overall economic system is to blame for our predisposition to consume excessively. Indeed, it is not something we can pinpoint to one entity in our civilisation. Rather, this characteristic is the heart of the very nature of our civilisation itself.

In other words, what we see is the emergent behaviour of the whole system. All the individual properties and characteristics of each individual component come together to contribute to an overall set of behaviours and properties that don’t necessarily link back in a straightforward manner to any particular component.

But then there are basic relationships that we can isolate (but not necessarily use as an oversimplification of the issue):

(1) corporations’ goal is to make a profit and enrich its shareholders;

(2) consumers want nice things and status on top of the basic necessities they need to live; and,

(3) corporations respond to what consumers want and consumers respond to how corporations influence their tastes.

The challenge for us is to see this vicious cycle of consumption for what it is and somehow step out of it to the extent that we do not subsume ourselves into the behaviour of the system excessively.

To some extent, there are already regulations in place to curtail corporate power (e.g. false advertising laws, disclosure requirements, etc.) so that the thin line between influencing and misleading in their marketing campaigns is not crossed. However, there are no such regulatory frameworks to govern consumer behaviour, and corporations are getting more creative at designing their ad/marketing campaigns to work around regulations or exploit loopholes. So the onus is on us as individuals to develop a more ethical regard to the way we consume.

* * *

In my article Why “globalisation” is a big lie that is now coming back to bite its proponents, I made the following observation:

Much as the United States laments the havoc that the Chinese economic juggernaut is causing its people’s way of life, the rise of China along with the wealth that puts teeth in the “belligerence” of these Arab desert kingdoms are creations of the American Way. Americans’ glutinous appetite for oxymoronic economic constructs — cheap luxuries, mass individualised mobility, and commodity manufactured goods — drove industry and government to find ways to (1) make people wealthier so they could buy more of them and (2) make these things cheaper so that more of them could be bought.

Wealthier and wealthier people buying more and more of increasingly cheaper stuff.

Doesn’t that sound so wrong? It does when worded that way. But it is the course we have currently set for ourselves. Politicians and marketers have simply become so good at coming up with euphemisms to mask this underlying but very real rot. Where it not for these realities, none of these geo-politico-economic monsters — Big Bad Third World countries taking away American jobs and then flooding their malls with their “affordable” trinkets and “personalised” services — would exist as the risks they now pose to the American way of life. Hats off too to clever marketers who made credit addicts out of Americans by making them believe they “deserve” the latest iPod model and five bedroom McMansion. So addicted, in fact, that they’d just as soon send their sons and daughters to three desert wars to secure the “world order” required to ensure a steady supply of these “essentials” unloading at their docks.

That China and India now make the viability of the way of life of the creators of their prosperity precarious is the biggest irony that will define the 21st Century.

These oxymoronic economic constructs have become addictions precisely as a result of the illusion of value that our present monetary system propagates. Affordable access to these makes the average schmoe today far wealthier than, say, any one of any number of ancient Egyptian Pharaohs you can name. But are these things truly affordable? Have we counted the real costs of all this stuff that we enjoy today? We evaluate their value on the basis of how much it “costs” to mass-produce these things in volumes that allow them to be sold to us at “affordable” rates. But think for a moment where this ability to mass produce them comes from. It comes from mechanisation. And what ultimately powers mechanisation? You guessed it. Fossil fuels.

When we think of mechanisation, think beyond the machines that power our factories to the machines that power the ships and trucks that transport raw materials and finished products to and from production and consumption sites. The trinket that comes together with a McDonalds “Happy Meal” — a product that would have come across as an artefact of exquisitely precise craftsmanship to an ancient Egyptian Pharaoh — was churned out in a factory somewhere in China and shipped thousands of kilometres so that it could give amusement to the average attention-deficited Western kid for all of five minutes. We produce them in vast numbers and give them away for free because our machines and systems of machines (our “supply chain” as that often-quoted euphemism goes) make it “economically viable” — even “profitable” — to do so. We do so because we can.

That need to be more responsible and self-sufficient extends to the quesiton of how much more we wish to broaden our landscape of dependency across entities that we exert very little control over — overseas multinational corporations, foreign employment, foreign-sourced capital, and China. The choice, as always, is ours.

[This is article includes passages lifted from the article “Change the way we consume and save the environment” published on the 15th October 2009 by the same author.]