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This heads-up was sent to me by my good friend Andrew Parramore. For everyone who ever wondered how the Chinese can fill, lable and ship around the world products that are mostly water for cheaper than Americans can do so for people living just next door, here are some answers. If you now think that getting people hooked on cheap, easy credit was bad for our economy now that those credit card companies are extorting 20 to 30 percent interest, just imagine when the Chinese decide to raise their percentage. Where will you turn when there are no companies here that make anything any more? Read this and be wise. Better yet, learn to read it in Chinese.
Outplaying your partner
Poorly Made in China by Paul Midler
Reviewed by Muhammad Cohen
When you buy for US$2 in New York an umbrella that’s made in China, you have to wonder how they do it. After all, the umbrella components have to cost something, there’s shipping, and there’s profit for numerous middlemen and the retailer. Among the economic miracles unfolding in China over the past two decades, the most mysterious may be how a country that skipped the Industrial Revolution, substituting the Cultural Revolution, became the low-cost factory floor to the world.
Poorly Made in China: An Insider’s Account of the Tactics Behind China’s Production Game provides fascinating and disturbing answers. Chinese manufacturers cut corners wherever they can, from product quality to factory equipment and maintenance. They unilaterally change product and packaging specifications to trim costs. They raise prices after the deal is signed, leaving the importer to absorb the added cost. They reproduce their