Mike Rowe of “Dirty Jobs” talks about the nature of work

This video is actually over a year old, but the message resonates nonetheless. I am a bit of a paradox – someone who is obsessed with Asia, who spends my days lethargically tapping away at my MacBook Pro (fantastic device), helping companies do business in China, often to outsource the “jobs Americans won’t do anymore”. Yet I still have interests in two successful American manufacturing companies that make 90% of their product in the good old USA, and we are in the process of moving some of those products back to the America from China. That’s what the math is telling us to do, and I know it is the right move. I have an MBA, but some of my fondest career memories are of manual labor, working in a small brewery and various factories. I hate going to the gym (as anyone who’s ever met me can easily attest), but I love yard work – pruning trees, weeding, splitting firewood, etc.

Rowe’s point delivered to Congress, is worth quoting:

Rowe explained that “dirty” jobs, like those in manufacturing and farming, used to mean success, but now look like settling. He wants that to change.

“I don’t think the country is going to fall back in love with manufacturing and I don’t think these policies are going to change, until or unless we reignite a fundamental relationship with dirt, work, and the business of making things, as opposed to the business of buying them,” he said.

He said one of reasons this is occurring is because community colleges and vocational education have taken the backseat to four-year college degrees.

“It’s not happening because people hate community colleges, it’s not happening because people hate the trades, it’s happening because we’re promoting a very specific kind of education at the expense of the others,” he said.

I’ve written before about the higher education bubble (here and here) and thoughts on American competitiveness and the attitudes towards work, but Mr. Rowe does a better job of laying out where we’ve lost our way a bit. Convincing people that the only path to wealth is $120,000+ in debt for a degree in liberal arts or the soft sciences seems further from the mark than ever.

China has built serious capabilities in the last 30 years, skills and knowledge that many parts of the developed world have allowed to atrophy. Part of the attraction to doing business in China is price, but increasingly it is because the domestic industries have shrunken to the point that China is the only place you can get it made, whatever “it” is. That is why PassageMaker is there, so that if you are forced to do business with Chinese suppliers, you have an advocate that understands your concerns and requirements, and has your success as our primary objective.

Ennui, information overload, and Happy Birthday Shenzhen!

I have become ferociously bored with blogging of late. Part of it was summertime, with its combination of oppressive heat and other, more enticing diversions. Part of it was (and is) the absolute avalanche of business we’ve been getting – there is a bad economy out there, but people still need help in China. And part of it was (and is and I fear always shall be) the crush of sheer stupidity gushing out of Washington daily. It just is more than I can take most days. It says quite a bit when the business climate is more stable in an ostensibly communist country than a nominally capitalist one.

However, when the IT team is motivated to re-post a sales brochure to freshen up the homepage, I guess that is a sign I best get moving on the blogging front.

I will try to re-establish my blogging discipline, with at least a few posts per week.

In the meantime, here is the article that got me off my duff (hat tip to Dan Beach, aka, “Canada Dan”):

China’s ‘miracle’ Shenzhen marks 30 years. I first visited Shenzhen in 1994 and at the time never imagined it would become my second home. How different it is today than the ugly, gray city 16 years ago. China has a long way to go, but the distance it has traveled has been astonishing.

Other fun stuff:

  • There Are Now Enough Vacant Properties In China To House Over Half Of America – bubble, anyone?
  • Obama Added More to National Debt in First 19 Months Than All Presidents from Washington Through Reagan Combined, Says Gov’t Data – hmmm…wonder how the Chinese feel about that?
  • China’s UN diplomat in drunken rant against Americans – well, at least we are clear on how China’s UN ambassador feels about it.
  • Report: Castro says Cuban model doesn’t work – reaaaaaally, you don’t say. As unsurprising as this is, imagine if Cuba tries a “Shenzhen Special Economic Zone” 90 miles off the coast of Florida to turn things around. Another interesting interview with Castro (nothing to do with China, but very interesting what he has to say about the Jews, Israel and Iran).
  • You Know The US Is Screwed, When China, Gambia, And Jordan Have Better Property Rights – I’ve felt this in my bones for a while. The USA has been acting for some time as though it didn’t want to be an economic powerhouse, and this is just another example. More on America’s competitiveness here.
  • Buck Up, America – for a much more optimistic take. The points he makes about China and India strike me as valid.

More blogging soon, I promise. I really mean this time. Seriously, quit laughing.

Some miscellaneous articles

Feeling lazy today. Sometimes the juices ain’t flowing. In no particular order:

Maybe get to some travel blogging tomorrow. Or not. You’ll have to check back to see.


Helped some friends move this weekend. I. Hurt. All. Over.

And by this weekend, I mean most all of it, Friday, Saturday, Sunday and Monday morning. Friday and Saturday were hot and humid, but Sunday was the gauntlet. Day started early, hot and humid and ended in a cold rain at 1:00 AM Monday morning. I had some work to do and did not get to sleep until 2:30 AM, back up at 6:00 AM to help them finish before the deadline of 9:15 AM (which we made by 5 minutes).

Why am I telling you about this, a blog ostensibly about China Business and my impressions thereof? Two reasons:

  1. I am a slightly overweight and out of shape 39 years old. I like to drink more beer than I should and my Room 101 is a gym. I have never been a good athlete, I have a bad back, so bad I had to wear a brace 24/7 for several years as a teenager. And though today I am sore all over, my legs and my back feel far better than I’d expected. I credit my TrekDesk. I’ve mentioned TrekDesk before (here and here) and I walk several miles a day at an aggressive 8 degrees of incline at 2.2 mph, which will get your heart pumping. I had not realized how well it had conditioned my legs and forced me to improve my posture. Walking while you work really does rock. I mention this because as I have blogged before, the TrekDesk is one of the best examples of our complete system of services – engineering by our Endorsed Service Provider, Contract Engineering Services; then Sourcing Feasibility Study, next Vendor Coordination and now Assembly-Inspection-Packaging at our Assembly Center according to the customer approved Product Quality Manual.
  2. The USA’s trade deficit with China is almost universally viewed as a bad thing. But the low-cost goods China provides to the USA consumer is a reminder that any transaction has benefits for both sides. As I moved my friends’ copious amount of stuff, I was struck by how much of the contents of their home (and indeed, any American home) are now Made in China. When I was growing up, I do not remember having that many clothes. That is not to say I went about in rags; quite the opposite, my Father was successful and I had a wonderful childhood. I just don’t remember having anywhere near the sheer volume of clothing my friends’ children had. Today I have five (5) pairs of shoes. I actually make a game of trying to minimize the amount of stuff I drag around with me – Exhibit A being the extended trips to China with one (1) carry-on bag. Looking around my own house, each of my children has at least twice as many pairs of shoes as I do. All are Made in China. The prices paid for those are astoundingly low, even to me who has an idea of what they cost ExW. While I am rightly concerned about foreign competition as an American manufacturer, it would be dishonest and foolish to say that there was no benefit to the American consumer from our trade with China.

All for today, much catch-up to do having lost the weekend. It continues to rain soup, new opportunities daily. Will try to squeeze in more blogging tomorrow.

Blogging is hard work

In less than a year I have gone from daily blogging to forcing myself to find something to write about once a week if that.

Since my return from China two weeks ago, I have been working like crazy trying to bag all the new business raining down on PassageMaker and China Quality Focus. The world economy is not out of the woods but we are definitely seeing an explosion of new RFQs, led by Australia. They are booming exporting the raw materials for China’s industry. Let’s all raise our glasses to Australia! More on that later…

I have been picking away at the travel log in my minimal spare time, but here are some interesting articles (some a bit old, but nonetheless).

  • Nixon wasn’t so bad after all – USSR planned nuclear attack on China in 1969 – and Tricky Dick stopped World War III. This is the kind of stuff you do as President that you can’t talk about, you have to hope historians get it right.
  • From Instapundit, a link to great blog about Japan, Ampontan. Today’s post is called Lame and Shameless, about ridiculous Western reporting on Japan. I am reminded of Andrea Martins, our representative in Brazil, who was actually born and raised in Beijing, the first and only Caucasian I’ve met who truly speaks native-level Mandarin. She told me once that if you visit China for a week, you can write a book. Stay for a month, you can write an article. Live there for 25 years, you have nothing to say.
  • Every once in a while you need to remind yourself how utterly insignificant you really are – Jupiter loses one of its stripes and scientists are stumped as to why.
  • Every once in a while you need to remind yourself how great your life really is – N.Korean women up for sale in China: activist. Tragic and terrible. I hope China steps up.
  • Interesting article from Mother Jones. Yes, really. The Last Taboo.
  • The New York Times finally realizes that many jobs aren’t ever coming back – The New Poor: In Job Market Shift, Some Workers Are Left Behind.
  • Speaking of vomiting…U.S. posts 19th straight monthly budget deficit. (hat tip to Dave Learn)
  • Dear God, let’s hope so – N.J. gov. sets tone for US – I have heard Christie speak, and it is QUITE refreshing. He sounds like a no-nonsense CEO sent in to save a company on the ropes. Math doesn’t lie. There is no money tree. You have to cut spending. However, if you could just raise taxes on The Real Housewives of New Jersey and leave the rest of the state alone, I think you could sell that. My God, what tacky people. The rise of China should be seen as largely a good thing, and maybe the Chinese economy will grow larger than the USA’s, but that was never a foregone conclusion. Our current political leadership across the board seems hellbent on making sure it happens ASAP though. As someone who has business interests in both USA and PRC, I just wish the USA would quit shooting itself in the foot. We businessmen would be just fine if we knew from one day to the next what was coming out of Washington.
  • Globish – I love it. What a great word. And the author nails it; I have had similar experiences many, many times in the Chinese-speaking world.
  • And finally, I can’t resist – Dog on the menu for Chinese astronauts. Actually, dog is pretty tasty, though I’ve only had it prepared in Korean restaurants in China, so I haven’t tried the Chinese version. Have to put that on the to-do list.
Back soon, hopefully with some travel blogging.

Eduscam, part deux

PassageMaker is privileged to host an intern from our alma mater, the University of South Carolina. This intern just completed his first assignment, an excellent market study for one of our clients. He looks like a keeper.

This got me thinking about what a bargain USC was. I got an MBA ten years ago for around $1600 per semester. Contrast that with the graphs in this WSJ article. An 80% increase in one decade. Really. I am starting to think education might be the next bubble that pops.

As I wrote about in my previous post on the subject, with the US economy in the tank and government borrowing and spending with historic abandon, young graduates should at least consider looking outside of the USA for job opportunities.

If you are interested in an internship in China, feel free to contact us with your resume.

Is China the next bubble?

In my post the other day,”Eduscam?“, I pointed to the entirely anecdotal experiences I had recently with our college educated youth who haven’t a moment’s work experience between them when they leave school. I had one thought that I decided to save for today.

Many young souls seem to want to be bankers or lawyers, as though these are highly lucrative careers that guarantee a sweet life in the Hamptons. Certainly they can, but most bankers and lawyers slog along without ever making the big bucks. Moreover, they are careers without a real product that you can point to and say “I made this”. I tried explaining there are no safe corporate career paths anymore, and believe me when the cost cutting starts, they start in middle management.

I remember reading an article written by a British MP maybe 20 years ago that has formed part of my philosophy ever since. At the time he was writing about the challenge posed by Japan to the British manufacturing base, what was left of it anyway. I am going from memory and as the article predated the internet, I have had no luck finding it. But the quote went something like this,

British Leyland did not go out of business because of the Japanese. It failed because it made dreadful cars. Our economy today is almost entirely based on people in London trading bits of paper.

Real economies make things.

Did this make anyone substitute “Chrysler”, “Chinese” and “Lehman Brothers” in their heads?

The issue has been much debated of late about whether China’s economy is a bubble, perhaps the greatest bubble of all (see here, here, here, here and here). Certainly the yuan is undervalued. Certainly much of what you see in the Chinese cities is pastiche – empty buildings abound in any major city. There is vast overcapacity in many industries, driven by cheap loans from government banks to drive development and keep unemployment manageable, similar to the government role in the Japanese and Korean economies during their early growth periods.

But my mind and my gut keep coming back to that quote from the Brit – “real economies make things“. There is real manufacturing know-how in China and it grows stronger daily as they gain more experience. The infrastructure and man-power are real. These are not paper assets that vanish in the blink of the eye like the billions lost in the last two years in the USA.

Does the Chinese economy need to make adjustments. Yes, indeed it does. So does the USA. And as with all things, we will all be forced to one way or the other. But the knowledge gained in this Chinese industrial revolution will persist and remain a real asset even if the bubble does burst. Japan is still the #2 economy despite 20 years of stagnation. They have not fallen back to the misery of late 1940’s. I am confident China will survive as well, even with their monumental challenges. They have come so far in 30 years, I just don’t see them giving up, and when the world economy does recovery, they will still be the largest source of low-cost manufacturing capability on the planet.

And future bankers of America need to remember it is a whole lot easier to move a financial center than the infrastructure required for manufacturing.

PS – If you have never watched Top Gear, I highly recommend it. The 30 minute episode on British Leyland is well worth your time, if only to remind yourself of how awful cars used to be.

“As Europe and Asia become ‘veritable old-age homes,’ the U.S. will enjoy the benefits of a growing population.”

Here is an interesting book review of Joel Kotkin’s new book, The Next Hundred Million, in the Wall Street Journal, entitled “The More the Better“, by Nick Schulz, which I will quote in full, since it is so short.

A gloomy mood might seem to be justified at the moment. Unemployment is nearing 10%. We have just witnessed a bitter financial crisis, a series of debt-deepening bailouts and a bruising fight over health care. Conservatives fret that we’re running out of time to tackle the entitlement crisis. Liberals fret that we’re running out of time to tackle the climate crisis. Roughly 60% of poll respondents say that America is on the wrong track. Meanwhile, China has resumed its torrid economic growth and has become for the U.S. what Japan was in the 1980s—the seemingly unstoppable Asian force that will soon leave America’s economy behind.

How to respond? “Declinists have always projected America’s imminent demise,” the editors of Newsweek wrote earlier this month. “For a change, they’re onto something.” Joel Kotkin would disagree. In fact, he is in a cheerful mood, in part because he has been thinking less about the present than about the near future, when the news, he says, is likely to be much brighter, at least for America.

“In stark contrast to its rapidly aging rivals,” Mr. Kotkin writes in “The Next Hundred Million,” “America’s population is expected to expand dramatically in coming decades.” He points to a slowly rising birth rate and to the continuing in-migration of young workers from poorer countries. Most of America’s population growth between 2000 and 2050, he notes, “will be in its racial minorities, particularly Asians and Hispanics, as well as in a growing mixed-race population.” No other developed country, he says, “will enjoy such ethnic diversity.”

For Mr. Kotkin, population growth translates into economic vitality—the capacity to create wealth, raise the standard of living and meet the burdens of future commitments. Thus a country with a youthful demographic, in relative terms, enjoys a big advantage over its global counterparts. In the next four decades, Mr. Kotkin observes, “most of the developed countries in both Europe and Asia will become veritable old-age homes” because of stagnant population growth. And the economies of these countries, already devoted to a vast welfare-state apparatus, will face crushing pension obligations—but without the young workers to defray the cost.

Inevitably, Europe and Asia will decline, Mr. Kotkin predicts, and America will thrive. Indeed, the U.S. will emerge, he says, “as the most affluent, culturally rich, and successful nation in human history.” What about the billion-person behemoth across the Pacific? Not to worry. Mr. Kotkin thinks that, by midcentury, China’s one-child policy will cause it, too, to suffer from the burdens of an aging population.

If Mr. Kotkin is right about America’s “next hundred million” people being the key to its happy destiny, where are these people going to live? In the suburbs, he believes—and why not? For most Americans, Mr. Kotkin writes, the suburbs represent “the best, most practical choice for raising their families and enjoying the benefits of community.” He adds that, even with one hundred million more people, the U.S. “will still be only one sixth as crowded as Germany.” In short, there is lots of room to grow.

Mr. Kotkin’s vision of America’s next four decades—expanding, browning, adapting and thriving—is largely convincing. He’s no Pollyanna, however. He worries especially that upward mobility is more difficult than it once was and that class polarization is a real possibility, because a knowledge economy like America’s tends to widen class divisions. The result is “an expanding affluent class of the highly educated, a stubbornly impoverished population, and a shrinking middle class.”

Here is one area where Mr. Kotkin might have said more. The collapse of the family in America’s underclass persists—with more families than not headed by single mothers. Mr. Kotkin is delighted to report that the family in America is taking ever new shapes, adapting and “resurging” in different forms. This claim may well be true for the broad middle class. But in that stubbornly impoverished sector, the family isn’t resurging at all. America’s relatively high birthrate—a source of national strength generally, as Mr. Kotkin says—contains a large percentage of out-of-wedlock births. In some urban neighborhoods, the rate stands close to 70%. The most “successful nation in human history” still has some work to do.

Mr. Schulz is editor of, the Journal of the American Enterprise Institute, and co-author of “From Poverty to Prosperity” (Encounter, 2009).

The demographic challenges of China are indeed real and as Mark Steyn pointed out in his much darker book, America Alone, demographics are destiny. What concerns me (and I imagine the Chinese government) more immediately than the aging is the dearth of women. The combination of the one child policy, modern medicine and Chines cultural preference for boys has led to tens of millions of men who will never find mates. The women simply weren’t born.

Some of this is offset by female immigration from other Asian countries, mainly Vietnam and the Philippines, but that is only an option for someone wealthy enough to pay for a wife.

In short, I am not afraid of China. It is a dynamic and fun place, much as Japan and Korea were during their booms. But America can only fail if we defeat ourselves. Sometimes I think some of us are trying…

Child labor

I read with interest the recent articles (couple of them here and here) about Apple’s announcement that some of their suppliers had used child labor in the past.

What I found most interesting was the “child” part – when I was 15 I would have slugged anyone who called me a child. During the summer of my 15th year, I was working in our metal stamping plant where the highest temperature reached 103 F (40 C). I had my first factory job when I was 14 turning wheels on a lathe. My Father never read child-labor laws, and thank God for that. It was an invaluable experience that I am sad to say I won’t be able to give to my son.

I can remember in 1998 visiting a factory for a major automotive supplier in Taiwan. There were 14 year old boys working on the lines making seat belt assemblies. I asked about it and found that they were students at the local technical school. They worked half a shift on the line and spent the rest of the day in class studying engineering. Today, 12 years later, they would be around 26 with degrees in mechanical engineering and over a decade of hands-on experience. I imagine some of them are running plants in China now.

I’ve written about The Wiffle Ball Life before, a term coined by P.J. O’Rourke to denote the rather pathetic American obsession with safety, self-esteem, and never doing anything the slightest bit risky – especially if it might also be fun.

I understand that Apple is worried about its image, and I acknowledge that those eleven 15 year olds may not have wanted to be there. But there is a big difference between a 15 year old farm kid fibbing about his age to get a good factory job to help support his family and using 6 year old slave labor in an illegal fireworks factory in Sichuan. It would be nice if the amazingly flexible English language had a concise way of stating the difference. I think “under-aged labor” is more reflective of the reality of the situation.

Should you need to verify that your suppliers are not using “under-aged labor”, our friends at China Quality Focus can perform a Corporate Social Audit for €376 + travel expenses, a small price to pay to avoid the kind of (undeserved) bad publicity Apple is experiencing.PassageMaker can also help our clients, under the auspices of a Vendor Coordination contract, draft supplier agreements to reflect the social norms of their home country or industry.

A better solution would be to have PassageMaker perform the Assembly-Inspection-Packaging functions in our 100% US-owned and -operated Assembly Center. We will warrant that we meet the necessary social compliance metrics.

Give us a call before you write the press release or talk to the New York Times.

Arrogant Americans need not apply, the decline (?) of the West and what if the Chinese stop buying US paper?

“The enemy always has problems of his own of which you are unaware.” – George C. Marshall

Not that China is necessarily our enemy, but they are certainly a competitor, and I don’t normally borrow money from my competitors. Some interesting articles covering all sides of the USA declining(?) debate and other silliness.

Sorry nothing more for today, too much catch-up from Chinese New Year.