China may put it's head in the clouds
When I was about seven years old my uncles, who ran our dairy farm business with my father, gave me a transistor radio for Christmas."I don't know how good it will be," said my uncle Bill. "It says it was made in Japan. It's probably just cheap junk."
He said it to my dad, supposedly out of earshot of me. But I heard it and I will always remember that line, because they seemed so appalled that the local Western Auto store would sell something made in Japan. In those days the words "Made in Japan" meant that, from an American point of view, a manufactured good was generally subpar.
As a little kid, it didn't make a difference to me; I was just glad to get the radio and listen to it. It was my first radio and it was gray in a black case and it hung from the post on my bed for many years. That radio went through many adventures and a lot of changes in my taste of music. It served me very well from 1958 when I got it until I graduated from high school 12 years later and then some. In the early days it was filled with the same music my parents liked, Lawrence Welk like songs and country (and western as it was called in those days) music. By 1963 it was featuring the likes of the Beatles and Beach Boys and by the time I was ready to give it to my nephew who was 10 years younger than me in 1972, it was playing Led Zeppelin and Credence Clearwater Revival. What happened to it after I gave it to my nephew I have no idea, but I do know it was still playing strong despite many years of falling out of my tree hut, powering six large speakers in my bedroom, being thrown out of the window of my first car and then carried around in my briefcase while I went to my first two years of college.
But this story isn't about that radio, but about a change in the world that began to take place in the mid-1950's that few saw coming. That change was the industrial emergence of countries that had been bombed flat during World War II. To a seven year old boy, it was about a fun Christmas present, but for the United States it was the beginning of a lesson in economics that we still have figured out.
Last week the Wall Street Journal ran a story about China and its plans to compete with Boeing and Airbus in building commercial aircraft by the year 2020. Many aircraft manufacturing executives and officinados were interviewed by the journalist who wrote the piece and most said they thought that China could probably build the planes, but that they would have a lot of problems doing so and getting them sold to reluctant airlines who like to have machines they are familiar with would be a huge hurdle.
The words I heard from those that were interviewed reminded me a lot of what I remember reading about Toyota and other Japanese cars when they were first introduced to the United States in the late 1960s. Smug executives at General Motors, Chrysler and Ford would say things just like that. They said the Japanese did not understand the American car market, the tastes of Americans or what the public wanted.
Based on what we know today, it was the big three that didn't really understand what Americans wanted. Americans had had such junk forced on them for so long that they didn't know the difference, until they had something affordable they could compare it to. And it was true of more than just cars, as anyone can see just looking around them; electronics, heavy equipment and many other industries.
And today Toyota, having buried Ford in red ink, is challenging General Motors for the top spot in vehicle production in the world.
Today a lot of us buy things with the words "Made in China" on them. At present that is the sign of cheap stuff, although that reputation is quickly changing. The Chinese have made leaps and bounds in the spirit of not only production numbers, but quality too. And they don't have to break through the barriers that the Japanese did. The animosity that the war had brought and the fact that their first products were usually copy cats of American products that at times weren't even very good copies caused Japan to have to fight for market share. It took them about 30 years to really get it right and in the next 20 they just kept plugging away at various industries. Today they dominate many of those.
China not only has a model to follow but the American public is also used to buying Asian products. It seldom scares people away like it did 50 years ago. And on top of that the Chinese have the worlds biggest retailer in the likes of Walmart marketing many of their products for them.
In some ways it's just a repeat of the past. China, always having been somewhat of an enigma for Americans, may soon become the biggest supplier of everyday products to us. And one other thing about the article on the aircraft.
You seldom see the comments of Japanese executives in any industry talking down the Chinese move into the modern world. That's because they are too busy looking over their shoulders watching the land of ancient civilizations sneaking up on them.
They take the competition seriously.