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Greater Competition from China?
Our Buy American Mention of the Week!
by Roger Simmermaker
February 10, 2002

Until recently, most patriotic Americans' concerns of communist China were military build-up and the overwhelming flood of imports. By the U.S. government's own statistics of 20,000 lost jobs for every billion dollars of trade deficits, China trade would lay off at least the entire city of Jacksonville, Florida.

But now, America faces a China that is transforming from merely an exporting platform to a nation of credible industry that extends beyond the long history of Nike, Tommy Hilfiger and other product knockoffs. Konka, a popular company in Mainland China but relatively unknown in the U.S., had their TV sets distibuted through Wal-Mart stores across the country, gaining an impressive 1% foothold in an otherwise crowded U.S. market. Konka recently pulled out of the U.S. market (none of their TV's were made here), failing to make a profit, but formidable Chinese forces remain.

Haier Group, China's largest appliance maker, is another company well-known in China but not well-known abroad. Haier is taking a different road than Konka, opening up a factory in Camden, S.C. to make compact refrigerators. Again, Wal-Mart has jumped at the chance to distribute the Chinese multinational corporation's product, and with their help, Haier now has a 30% hold on the compact-refrigerator market. Haier has realized something that Konka didn't - it's better to put "Made in U.S.A." on their products rather than import them.

Haier also makes freezers, DVD players, air conditioners, flat-panel TV screens, and microwave ovens. Konka will likely regroup and return someday. After all, they produced 6.5 million TV sets last year, compared to 10 million made by Panasonic's parent Matsushita. Few Americans realize that in their patriotic desire to support America by buying Haier's made-in-USA compact refrigerators, they are simultaneously supporting Chinese communists.

Since there is little we as average Americans can do to influence governmental trade policy, the best bargaining chip we have is voting with our wallet or checkbook every time we go into a store. It is almost equally important where we shop as it is what we shop for, and America would do well to stay away from stores like Wal-Mart, who are only making China's U.S. invasion easier and more significant than ever.


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