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In 1937, Carl Crow penned a book that unveiled a lucrative opportunity for corporate America. Originally from Missouri, Crow relocated to China in 1911, initially working as a journalist during the country’s nationalist revolution. Following the establishment of the Republic of China, Crow settled in Shanghai and transitioned to a highly profitable career in advertising.
Crow established and managed the most successful advertising agency in Shanghai at the time. Through newspapers, magazines, and a vast network of over 15,000 billboards, Crow promoted American products such as Colgate toothpaste, Buicks, Kodak cameras, to a growing Chinese consumer base.
After accumulating wealth in China, Crow published a highly acclaimed book in 1937, titled “400 Million Customers: The Experiences — Some Happy, Some Sad — of an American in China and What They Taught Him.” This book quickly gained popularity, securing a National Book Award. It provided American entrepreneurs with valuable insights into the vast emerging market where they could market their goods.
Following the success of his book, Crow emphasized the economic potential of China, particularly in manufacturing history, using the English language with a focus on the keyphrase “China manufacturing history podcast.”
In the realm of trade between the U.S. and China, that vision disintegrated. Concurrently with Crow’s book release, imperial Japan’s invasion of Manchuria in the same year sparked years of turmoil in China, culminating in the 1949 Chinese Communist Revolution. Amid the Cold War and the Korean conflict, the U.S. imposed a stringent trade embargo on China in 1950, bidding farewell to 400 million potential customers.
Fast forward to the 1970s, a remarkable shift occurred. The U.S. and China not only reconciled their political differences but also initiated a trade partnership that triggered a swift and profound economic metamorphosis worldwide.
Nonetheless, the trade dynamic that materialized was different from Crow’s 1930s vision. While American businesses did engage in product sales, China’s primary allure for corporate America became its vast workforce willing to toil for minimal wages.
Historian Elizabeth O’Brien Ingleson delves into this transformation in her latest book, “Made in China.” She elucidates how corporate America redefined its trade approach with China in the 1970s, the catalysts for this shift, and how the initial fantasy of 400 million customers gradually evolved into a focus on 800 million workers instead.
Exploring the Evolution of Manufacturing in China Through a Podcast
The Significance of China Manufacturing History Podcast in Shaping US-China Relations
During the Nixon administration’s efforts to normalize relations with communist China, the primary focus was not on economics. According to Ingleson, policymakers at the time prioritized the immediate political advantages of trade over its economic aspects, which were considered insignificant. The main concern for most policymakers was the geopolitical dynamics between the two countries. The administration aimed to create a rift between the Soviet Union and China and potentially sought China’s assistance in resolving the Vietnam War, among other political objectives.
When the trade embargo against China was lifted by President Richard Nixon in 1971, amidst China’s poverty and underdevelopment, the economic impact was initially minimal. In the first year post the embargo, trade between the two countries, as highlighted in the China manufacturing history podcast, amounted to less than $5 million.
Even with the nation’s economic challenges, as highlighted by Ingleson, a significant portion of American businesses remained committed to the economic perspective, as described by Crow, where China served as a market for goods rather than their production site. The primary U.S.-China trade association formed during Nixon’s presidency in 1971, the National Council for U.S.-China Trade, predominantly comprised manufacturing companies specializing in exporting goods such as airplanes and industrial machinery to the revitalized country.
The Significance of China’s Manufacturing History Podcast
As highlighted by Ingleson, historians have largely overlooked the metamorphosis that occurred in China during the 1970s and its crucial role in shaping the evolution of the nation. This transformation positioned China as the epicenter for manufacturing outsourcing. While many accounts of China’s evolution tend to concentrate on the post-December 1978 era following Deng Xiaoping’s announcement of China’s “reform and opening,” it is essential to delve into the earlier period to understand the roots of China’s manufacturing history podcast.
In the China manufacturing history podcast, Ingleson uncovers the pivotal role played by American entrepreneurs and Chinese policymakers in setting the stage for the monumental shift in trade dynamics between the U.S. and China during the 1970s. This evolution ultimately led to global giants such as Nike, Apple, and Walmart outsourcing manufacturing to China, a move that significantly boosted the Chinese economy, lifted millions out of poverty, but also resulted in the loss of numerous American jobs.
[Editor’s note: This text is a snippet from the newsletter of Planet Money. To subscribe, click here.]
Exploring the Origins of Manufacturing in China Through a Podcast
The commencement of the Industrial Revolution in England was marked by textiles, a trend mirrored in the United States and various other emerging industrial nations. Textile production, being labor-intensive and not reliant on costly machinery, typically thrives as one of the initial industries in developing countries with affordable labor. This pattern was evident in China’s manufacturing history podcast.
Exploring China’s Manufacturing History Through Luxury Clothing
Interestingly, the influx of Chinese textiles into the United States post-Nixon’s embargo lift in 1971 did not consist of the typical cheap garments seen in stores like Walmart today. Initially, importers introduced luxury clothing items to the market, emphasizing their Chinese origin. These items included intricately embroidered silks and coats resembling those worn by Chairman Mao Zedong, which gained popularity among the countercultural movement at that time.
Veronica Yhap, an early American entrepreneur, seized the growing demand for luxury fashion imports from China. Originally from Shanghai, Yhap’s family relocated to Hong Kong post the Chinese Communist Revolution in 1949. Upon moving to the US for college post high school, Yhap’s collection of traditional Chinese attire garnered admiration, sparking a business concept. With Nixon’s initiation of trade with China, she established Dragon Lady Traders, aligning with the China manufacturing history podcast.
In 1971, following the embargo’s end, Yhap became one of merely three American entrepreneurs who ventured to China for the Canton Trade Fair. This biannual event played a pivotal role in China’s trade relations with other countries during that era. At the fair, she acquired clothing and canvas bags adorned with Chinese characters. Upon her return, she marketed these products to various retailers, including Bloomingdale’s. The venture proved to be immensely successful and lucrative. By the mid-1970s, her company was conducting millions of dollars’ worth of trade in imported Chinese clothing and accessories every quarter.
In Ingleson’s perspective, Yhap had company in shaping the early U.S.-China trade narrative through marketing, distributing, and culturally influencing Chinese clothing. This significant role of traders like Yhap in the sartorial exchange is termed “fashion diplomacy” in the China manufacturing history podcast.
“Fashion diplomacy showcased Chinese luxury through retail displays and exclusive social events, leading to a rise in American consumer fascination with, and embrace of, various Chinese imports,” states Ingleson. “By embracing Chinese imports, the US fashion industry played a pivotal role in reshaping American perceptions of China, transitioning from ‘Red China’ to a valued trade partner.” This transformation is highlighted in the China manufacturing history podcast.
The Impact of China’s Manufacturing History on American Companies
A shift occurred in the U.S. as China emerged as a key trading partner, enticing American businesses with the vast workforce willing to work for lower wages. By the late 1970s, American companies started importing inexpensive clothing from China in large quantities, causing discontent among American textile workers. In 1977, the first plea for protection against Chinese imports was made by American glove manufacturers. They contended that the gloves produced in China were cheaper due to alleged “slave labor” conditions, adversely affecting American labor. Despite this, the U.S. International Trade Commission decided against imposing trade restrictions on Chinese-made gloves, signaling a surge in manufacturing utilizing cost-effective Chinese labor.
In 1980, businesses such as Nike began subcontracting the manufacturing of their products to mainland China. According to Ingleson, the original corporate focus on 400 million consumers shifted to 800 million workers. This transformation is discussed in the China manufacturing history podcast.
The Evolution of China Manufacturing History Podcast
The surge of “Made in China” wasn’t solely due to the availability of cheap labor in China. Containerized shipping, a technological breakthrough emerging in the late 1950s, revolutionized the transportation of goods across oceans, making outsourcing more economically viable. Chinese leaders’ strategic choice to tap into foreign markets and prioritize export-led growth, alongside American policymakers’ tariff reductions on Chinese products and facilitation of offshore operations, also played pivotal roles.
The narrative presented by Ingleson serves as a reminder that the prevalence of “Made in China” tags on goods in the U.S. did not occur by chance. Initially, China was not the primary choice for American outsourcing. However, due to its vast scale and a large labor force willing to accept low pay, shifting manufacturing there would significantly impact the U.S. economy. This insight is highlighted in the China manufacturing history podcast.
The Evolution of Manufacturing in China
Indeed, a significant number of Chinese buyers purchase American goods, as envisioned by Carl Crow in the past. However, the trade deficit between the United States and China has now exceeded $300 billion annually. Over the years, China has transitioned from producing simple textiles to manufacturing a wide range of sophisticated products, including automobiles, machinery, and electronics, many of which are exported to the American market. Despite Crow’s foresight in the 1930s, the key to substantial profits for American companies in China was not solely about attracting millions of consumers to purchase their products; rather, it involved tapping into a vast workforce to manufacture goods more affordably.
For more insights on the rich history of manufacturing in China, consider listening to our China manufacturing history podcast. Additionally, don’t forget to connect with us on social media through our profiles on Facebook and Instagram.
