To Your Heart's Content

Monday, November 27, 2006

Outsourcing WHAT?!

I don't know what the hell it is with outsourcing today because it came up during lunch with a friend and then again in an article I just read. Apparently big pharma is beginning to outsource jobs to China that entail testing products on dogs. Who would have guessed! What a surprise! Less activists to worry about I guess. And even if there were say more than a few, I don't know if it would make any difference. After all, I saw on TV a few months ago doctors testing violent and addictive drugs on rats! Yep, right there on TV--and it wasn't channel 452 on the satellite dish. Injecting different amounts into different rats to see the effect. Some died, some just wobbled. Yeah, great fun to watch.

Speaking real quickly (I just finished and actually, this may not be so quickly) of outsourcing. Bad thing or good? To be honest, I don't know enough about the issue. What i do know is that outsourcing isn't always such a bad thing. Of course, if it were my father's job that was outsourced I'd probably say otherwise, but it's not. And what I see here in China is that there are not only more qualified Chinese to take the more technologically advanced jobs but the are willing to work harder and more for less. At the same time they get paid better, derive more benefits, and have a reliable and steady income. In fact, they are happy to have this job because it's not boring, there are opportunities for advancement, and the experience is great. Plus, it keeps prices low worldwide to some extent. For example, I know a semiconductor engineer that who makes about 7,500 RMB ($1000) per month (25,000 RMB/yr. is the threshold for being a serious consumer in China), which is not bad at all for a country whose average income is $300 per month. She works at least 50 hours per week and is happy with her job (she's been given a raise once and is up for review annually to receive others). And why not mention that western companies generally bring better standards abroad (very generally, that is). More and more Chinese, at least in second and third-tier cities, prefer to do business with foreign investment companies because they know they will abide by the contractual terms; they don't have to be suspicious about that truly rampant Chinese phenomenon of going behind the other party's back to make a bigger gain but hurting the overall deal.

Of course, there are the negative aspects too. China's greatest problem in my opinion is pollution. If anything will bring China down in the next twenty years or so it will be a series of severe environmental catastrophes. Unless China cleans up its act, literally, there's no way nature can bear the environmental burden. Foreign investment also takes advantage of the lax environmental standards in China and this is a true shame. In my opinion, China is the toxic dump of many international companies taking advantage of rarely enforced environmental laws and highly corrupt provincial officials. Of course, one also cannot exclude Chinese-owned and operated companies either. In fact, chances are they are worse. But billions of dollars have been invested by foreign companies to produce chemicals and materials whose waste is dumped raw and untreated, whose viscous fumes are bellowed brazenly without contrition, and one day the Chinese are going to wake up to this. In fact, I am sure many of you have heard that there were 74,000 protests in 2004 (this year it is down to like 50,000 I believe--their clamping down). Well, most of those are land confiscation and environmental protests. Most, if not all of the people are innocent farmers who are powerless against a system that pays no heed, that doesn't give a shit because development and a "harmonious society" are more important, guanxi is more important than people's lives.

But hey, the same thing was happening in the US between at least 1890 and 1950. But China, as someone recently said, has forced what took the west 200 years into 20. The law has not had any mentionable developments. So we'll see what happens...Anyhow, here are some stats, all from reliable sources:

· The Xinhua report (gov't funded newspaper=low estimate) cited Pan as saying that China has over 20,000 chemical factories located along major rivers, including 10,000 along the Yangtze River and 4,000 along the Yellow River. It did not say how many were on the Songhua River.

· RE: Yangtze River: The report said 30 billion tons of polluted water were released into the river in 2005, a 50-percent increase over the number in 1998.

  • China is paying a huge price for its economic growth...The cost of environmental pollution and ecological damage is thought reach as much as 8 to 12 per cent of China's annual output - or about as high as the country's annual growth.
  • Around half the population, or 600m people, have water supplies that are contaminated by animal and human waste.
  • According to the World Bank, China has 16 of the world's 20 most polluted cities. Estimates suggest that 300,000 people a year die prematurely from respiratory diseases.
  • The main reason is that around 70% of China's mushrooming energy needs are supplied by coal-fired power stations, compared with 50% in America. Combined with the still widespread use of coal burners to heat homes, China has the world's highest emissions of sulphur dioxide and a quarter of the country endures acid rain. In 2002, SEPA found that the air quality in almost two-thirds of 300 cities it tested failed World Health Organisation standards
  • It is no rarity, therefore, to find a bureau imposing a fine on a dirty local enterprise (thus fulfilling its duty), but then passing the money on to the local administration, which refunds it to the company via a tax break.
The list goes on and on...


  • Outsourcing is a trend...and the developing country could benefit more than suffer from this process while the US will worry about the domestic job market....what will the common American do....

    Besides, where do you get so many figures?

    By Anonymous , at 6:45 AM, November 28, 2006  

  • Besides buying cheaper semiconductors, what the job-outsourced, laid-off American will do I have no clue. Look for another job until that gets outsourced too? Refinance their loans? Give up and write a book? Lobby to get their job back (good luck with that)? Go back to school? Who knows

    I collect all facts and figures I read about China from various newspapers. Just for reference, and it's a fun project. Although a good site to visit is:

    By Blogger justin fabish, at 2:56 AM, November 29, 2006  

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