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What 'Reshoring' Means for the American Precision Machining Industry

 Woodruff Imberman

 

 

By Woodruff Imberman, Ph.D.
Imberman and DeForest, Inc.

 



Executives of efficient American precision machined parts makers – job shops – who overcome organizational inertia and take five steps needed to improve their competitiveness can meet the price and delivery requirements of Original Equipment Makers (OEMs). That will allow them to take advantage of the “reshoring” trend, in which orders for precision machined parts of all types once sent to cheap foreign job shops are returning to North America due to rising Far Eastern labor costs, fluctuating foreign exchange rates, and logistical difficulties.

As the President, CEO, and chief marketing officer of a management consulting firm who spends much of his time meeting with clients to discuss how to improve their performance and organizational effectiveness, I know from experience that many job shop executives are their own worst enemies. I have heard innumerable variations on the theme of:

“Things are going well now; we are on the top of our game.” 

“We are the best in our industry.” 

“I can’t get my management team excited about a new program now.” 

“I am too busy for that now…let's defer it for in six months”


In short, they act as if they have either a monopoly on wisdom or they are satisfied with their status quo.  But as international management guru Peter Drucker said, 

“Inertia in management is responsible for more loss of market share, more loss of competitive position, and more loss of business growth than any other factor.” 1


Inertia has captured these job shop executives; good enough is good enough for them2.  Inertia can best be identified when these managers send the message through their organizations by their action and inaction that good enough is good enough. 

The most successful executives of precision machining operations that I have met are never fully satisfied with current results. They have a gnawing sense that if they had only made an extra effort here, had asked their managers to execute faster there, had been less accepting of excuses, and had insisted on better performance rather than thinking their current efficiencies suffice, their firms would have now have lower per-unit costs, better delivery records, and more orders taken at higher profit margins.  In short, they worry whether their status quo will become their status woe.

These job shop executives don’t lose sleep fretting about their popularity because they know their industry is highly fragmented. Most job shops are relatively small, few with more than several hundred employees. This multiplicity allows purchasing agents at the Original Equipment Manufacturers (OEM’s) considerable ability to play one machining supplier off against another for better pricing. No, job shop executives don’t fret about their popularity, because they are too busy worrying about how to improve productivity and become more competitive…

 “If we had not made this mistake…”

“If I had not waited to start ….until our margins fell out of bed.”

“If only I had pushed harder to reduce set-up times”


Executives dissatisfied with today’s status quo and worried about tomorrow are taking five steps to rectify it, because experience has taught them that pop psychology best sellers like “three quick steps to this; five fast shortcuts to that; or the seven secrets to whatever” are no substitute insisting upon better organizational performance. They understand customers can be persuaded to buy their precision parts again from domestic job shops--from their shops--because they can make quick deliveries of quality products at reasonable prices. 

 

Five Steps to Profit from "Reshoring"

Job shop executives can benefit from the “reshoring” trend by taking the following five steps to cut costs, improve their competitiveness, and boost profitability:

  • The first step is to conduct an external market survey, assessing the strengths and weaknesses of competitors and the prospects of the industries they serve. This will show where their greatest opportunities lie and what is needed to take advantage of them.
  • The second step is to conduct an internal survey of their own costs and productivity to identify what inefficiencies exist within their own organizations and what bottlenecks  are stifling throughput. This will tell them how to increase internal efficiencies in order to take advantage of the opportunities out there.
  • The third step is to conduct development programs for senior managers to teach them how to how focus their activities on meeting the required long-term goals   needed  to  take advantage of future opportunities.  In special training sessions, senior managers can be shown how to focus their activities on major company goals so they can concentrate on critical matters while delegating the hum-drum  to the back-office. Properly trained executives can then  use their time to coordinate the different disciplines within their companies-–engineering, R & D, marketing, finance, production, and human resources--to cut cycle times for designing, engineering  and producing gears, valve housings, or
    transmission parts at ever lower costs, and to bring new precision parts to market quicker. In short, to insist on rapid execution of short term goals.
  •  The fourth step to develop a cadre of first line supervisors by training them to understand the difference between busyness and effectiveness. Doing so will teach them how to meet and beat  their short term efficiency objectives needed to meet the organization’s overall goals. Rather than focusing on managing the behavior of their workers, first line supervisors need to learn how to manage the work of their employees. Traditional supervisory training that merely advocates panaceas like “praise in public and criticize in private,” and similar simplicities no longer suffices. Constraint Theory, real-time scheduling to coordinate the work at the Okumas and other chip cutting machines with quality control monitors, lean manufacturing techniques, for example, will be required.4
  • The fifth step is to generate employee cooperation in meeting company efficiency standards by developing and  implementing motivation/compensation systems to reward workers for better day-to-day productivity and improved quality output.5   
  •  By identifying and focusing on future markets with the greatest potential, by training managers and supervisors to be more effective and efficient, by using costing systems to identify and shed marginal products and customers, by cutting costs, and by motivating employees to improve productivity by rewarding them through motivation/compensation systems like Gainsharing, which often results in double digit productivity gains, precision job shops can take advantage of the “reshoring movement” and reestablish themselves as low-cost domestic suppliers whose deliveries are quick and dependable.6 

 

What is Reshoring?

Reshoring is the reverse of out-sourcing, which in itself has a long history.

Outsourcing started in Detroit as General Motors, Ford, and Chrysler tried to escape their expensive United Auto Worker contracts by becoming mere assemblers of parts (transmissions, brakes drums, axles, trim, wire harnesses, etc.) made by lower-cost outside suppliers rather than continuing their previous practice of assembling components they themselves made into the finished cars they drove off the assembly line. All of the old “Big Three” spun off their parts subsidiaries into independent suppliers, hoping they could negotiate lower labor costs with the UAW. This practice soon spread to the off-highway construction, industrial machinery, agricultural equipment, energy, and specialty heavy truck industries as well as consumer durable makers producing refrigerators and stoves. Companies hoped they could reap huge savings by buying parts made by low cost domestic suppliers not hobbled by restrictive union contracts… or even by unions at all.7

When that didn’t work out so well, the Big Three then rationalized since they sold cars globally, they should also search the globe for low-labor cost suppliers of the components they assembled here in their domestic assembly plants. Other OEM's followed suit. Soon, a universal chase was on to find areas or countries with the lowest labor costs.8

Jack Welsh, legendary Chairman and CEO of General Electric, semi-humorously claimed the ideal location of an international company’s factories would be barges that could be floated anywhere to take advantage of favorable exchange rates and low-cost labor. But because of rising foreign labor expenses, foreign currency value fluctuations, and logistical nightmares, many purchasers of precision machined parts are now rethinking previous decisions to buy them from low labor cost, off-shore suppliers for use here.  

 

When and Where Did it Start?

American “Offshoring” started in the late 60’s with Mexico's maquiladora program. Under it, factories built in a maquiladora free trade zone along the Mexican-American border could import American-made parts and components without tariffs, assemble them into finished products, and then ship them back to the United States, paying duties only on the value-added by inexpensive labor. Spurred by the North American Free Trade Agreement of 1994, maquiladora output by the end of the century accounted for about 25% of Mexico’s Gross Domestic Product.

As wages rose in Mexico, American companies looked further afield to Guatemala and other Central American nations for lower-labor costs so finished products could be made (apparel, for example) or assembled (small consumer appliances) cheaply.  This trend morphed into exporting the entire production of  labor-intensive like shoes, small appliances, electronics, toys, and all types of computers and peripherals to foreign countries with cheap labor and then shipping finished goods back for domestic customers.

Then, as Central American wages climbed due to higher demand for low-cost labor, American manufacturers looked overseas for low labor cost suppliers. They found them in Pacific Rim countries like Korea, Taiwan, the Philippines, and finally, Mainland China.

 

China Today

China today still suffers from the Mao Zedong’s early efforts to consolidate Communist Party rule in the 1950s, his simplistic efforts to speed industrialization, and his desires to maintain the theoretical underpinnings of socialism. These include:

  • Mao's "Great Leap Forward" of 1958, which collectivized private farming in an effort to boost food supplies enough to feed industrial workers in urban areas. Like Stalin’s forced collectivization of Ukrainian agriculture in the late 1930’s, Mao’s leap stumbled, resulting in famine as tens of millions of Chinese starved. The results were so clearly negative that they helped more moderate Communist party leaders like Deng Ziaoping and Liu Shaoqi to gain influence.
  • Mao's Cultural Revolution in 1965, which was an effort to eliminate “revisionism,” and reinforce basic principles of Communism to create a classless society in which peasants, workers and educated classes would work together for the common good. Groups of “Red Guard” students gathered, denouncing all whose thinking differed from Mao’s. They created such social chaos that Mao’s authority was again challenged by moderates Zhou Enlai and Deng Ziaoping, who used their influence to return to normal life in 1968. 
  • Mao’s hukou system, which was a way to control internal migration by household registration. Everybody had to register at their place of birth for a location certificate, on which were based social benefits like land distribution, school admittance and medical insurance. Deng Xizoping subsequently softened this effort in the 1980’s, allowing more rurals from the interior to migrate to the coastal Special Economic Areas, bringing a surfeit of cheap labor to the growing export industries in Coastal areas.9     
  • Deng's "one-child policy," which was an effort begun in 1979 to slow the rise of  China's population which had grown to about 963 million in 1978 from 552 million in 1950.  Each female was allowed just one child; above quota births were heavily fined if not aborted forcefully. This policy led to a temporary "demographic dividend," i.e., a very high percentage of the population in its prime working years. The working population (15-64) increased from 59.3 % of the population in 1980 to 74.4% in 2011 as China urbanized. Today, that population is aging, and the social safety net for the elderly is weak. Of the roughly 185 million Chinese over 60, some 22.9%, or 42 million, live in poverty, as compared to 8.7% of Americans over 65, where the safety net of Medicare and Social Security is much stronger.10 China has made little current effort to address this problem, which will return to haunt the nation in coming decades.

China's economic scene gradually changed, starting in the late 1970s, due to four trends:

  • The “household responsibility system” in rural provinces, where local governments allowed farmers to sell some of their crops at free-market prices. Since man seems to be "hard-wired" to be acquisitive, this practice which gradually spread nationwide in the early 1980s.11  
  • The industrial reformat a local level whereby enterprises owned by municipal and provincialgovernments were allowed to begin producing and marketing goods for sale at market-drivenprices in local areas.
  • The gradual transition from state- to privately-owned enterprises, as individuals acted as entrepreneurs, making and selling a wide variety of goods nationwide. In short, this was the beginning of a national private economy operating sub rosa along side with the large state owned enterprises.
  • The establishment of “Special Economic Zones,” in Guangdong and Fujian provinces as well as Shanghai and other coastal cities, in which free-market was encouraged, as Communist Party leadership looked the other way. 12

Under Deng Ziaoping’s leadership in 1980’s, China gradually liberalized its economy, although political power remained a Communist Party monopoly. Although relaxation of Party political control was the subject of much internal debate, hardliners finally won the argument when the Tiananmen Square demonstrations for political reform and an end to Party corruption erupted in May, 1989. Martial law was declared in Beijing, followed by troops and tanks. The June 4 crackdown killed hundreds of demonstrators13. To this day, the Communist party keeps political control and ideological purity at a national level but turns a blind eye to the emergence of a market-driven capitalistic economy based on exports which functioned alongside large state-owned, woefully inefficient enterprises. Chinese leaders now face a dichotomy: how a Communist central government, so repressive that early 20th Century Lenin would be proud of it, can maintain political control in an open-market (or semi-open, at least) economy which has propelled much of China into the 21th century industrially. 


Wages and Population

All this turmoil has created lasting deleterious effects. Because of the still extant “one child rule,” the temporary demographic dividend has ended, and the growth of China's prime-age labor force has slowed considerably, causing wage inflation, hurting exports, and threatening the rising standard of living that has kept the masses more or less satisfied and the repressive Central government in power.

Until recently, abundant numbers of unskilled and semi-skilled labor supply drawn from China’s interior agricultural provinces accepted the long hours demanded of urban employees in Coastal manufacturing areas. This proved quite beneficial to economic growth. But today, labor shortages now exist in some of the coastal special economic areas, especially the Pearl and Yangtze River Deltas as well as other vital industrial areas keyed to export markets. This shortage also helps explain the current wage explosion in China.14

As offshoring accelerated in the 1990’s in Mainland China, its government  turned a blind-eye as citizens in coastal Special Economic Areas organized profit-seeking companies to make parts and components for export. These exports fueled a rising standard of living which enabled the Communist Party to maintain control. Local and provincial political leaders welcomed the chance to become “silent partners” in many of these companies, proving that greed, payoffs and bribery are not just Chicago politics, but are world-wide.

Chinese wage levels in 1978 were about three percent of those then in America,  and much lower than the pay in neighboring countries such as Thailand and the Philippines.15 Since labor costs in China were still a small fraction of those here in the 1980’s and ‘90s, American OEMs abandoned domestic job shops supplying precision parts and began importing from Mainland China for assembly here into bulldozers, agricultural tractors, wind turbines, etc.

Since the law of supply and demand knows no boundaries, the flood of precision machined components exported to foreign customers outgrew the supply of skilled labor in China’s “special enterprise” zones located in coastal provinces. Wages shot up, far faster than in neighboring countries. From 1998 to 2010, the average growth rate of annual wages was 13.8%. Says the International Labor Organization, real wages in low cost Asian countries have risen by 7.1 to 7.8% annually  between 2000 and 2008, while pay in Western, advanced nations rose by just 0.5% to 0.9% in the same period.16 These narrowing differentials have made it increasingly difficult to justify importing heavy precision machined components of many types from China.

That does not stop American buyers from continuing their “China price” chants. For example, the president of a Midwestern American precision machining job shop received a letter early this year from one Caterpillar Corp. buyer, demanding an immediate 8 percent price reduction on certain parts he made for the Peoria OEM, followed by 3 to 5% annual price cuts in coming years. After the job shop president said no, he has not heard from that Cat buyer again. Another precision machining job shop owner received a recent terse email from Peoria, demanding his attendance at a suddenly announced suppliers meeting, at which he and a number of other suppliers heard a song of Cat’s woes, all ending with a “China Price” coda.

Despite the hukou system, factory owners in China’s Coastal Zones continue to make great efforts to import workers from poverty stricken inland provinces in a great internal migration. Since Chinese wage levels increased much faster than productivity, labor  has became more expensive for employers, decreasing the labor cost differential between China and Western nations. Indeed, China’s lower labor costs compared to Korea and Malaysia will evaporate by 2018 and 2022, respectively.17 China’s manufacturers face a tough future with exploding labor costs, the time and cost of trans-Pacific shipping, and the rising value of China’s currency, the Yuan. 

 

Currency Valuation

While China doesn’t float like Welch’s barge, it has a long history of manipulating the value of its currency in order to boost exports.

The appreciation of the yuan has created more difficulties for China’s export industries, now bedeviled by rising labor costs. China’s past economic success has been due not only to cheap labor, as we have seen, but also to an artificially low, fixed exchange rate of the yuan vs. the dollar. Washington and the European Community have railed for years about the undervalued yuan, saying it causes the large trade imbalance and adds to high domestic unemployment rates in the US and Europe. At the start of economic liberalization in the late 1970s, the percentage of China’s GDP that was exported was about 5 percent. By 2006, that had grown to about 40%, generating a large trade surplus. That should have raised the international value of the yuan, but Chinese governmental intervention maintained its low international value in the world’s financial markets in order to promote exports. 

Here’s how the international purchasing power of the yuan vs. the dollar works. For example, say a Chinese precision job shop machining steel castings into wheel hubs for off-the-road construction equipment charges 600 yuan to produce them in China, and a similar one cost US$37.50 to make in America. Then one dollar would be worth  8 yuan, at least in terms of wheel hubs. If the value of the yuan would appreciate, rising say 25% to 6 yuan to a dollar, then buying that Chinese race would cost the American purchaser US$46.88. Obviously, American construction equipment buyers could purchase fewer Chinese wheel hubs with their dollars, and American job shops machining them would not be so hard pressed to beat the “China Price” their OEM customers are always citing. Fewer road grader, front-end loader, or bulldozer makers would buy their wheel hubs from Chinese suppliers and ship them back to America.

China has been forced to allow the value of the yuan to increase due to international pressures, causing the cost of China’s exports to increase for foreign purchasers. Because of the higher value of the Yuan, the goods produced there are more expensive than before, when purchased in the US with American dollars.  Since so much of Chinese manufacturing is geared to exports, the rising value of the yuan is creating higher unemployment there. Eventually, this will threaten China’s rising standard of living which has enabled the Communist Party to maintain political control. This raises the specter of the widespread social unrest so greatly feared by the Chinese government. 

 

Social Controls

All good things come to an end. China’s one-child rule reduced the supply of young cheap labor while the demand for cheaply priced exports increased the demand for it. To control greatly feared social unrest, the Chinese government started the Great Firewall in the late 1990’s to block foreign websites like Facebook, Twitter and YouTube.18  The Chinese government does allow domestic ones like Taobao, Alibaba and Baidu to flourish, although under tight government scrutiny intensified  by  the 1998 creation of the Golden Shield for domestic surveillance. Comments and postings by civic-minded microbloggers are filtered, letting them to focus their attention only on local problems like pollution19, food safety20, and local industry21 but suppressing critical comments about the central government that might foment widespread collective action, social unrest,  protests, and public demonstrations.

With few rights, workers find themselves housed in giant company-owned dormitories in the Pearl River Delta near Shanghai and other Coastal manufacturing megalopolises where they work 80+ hour weeks in unhealthy conditions. Industrial accidents have killed more than 70,000 a year in 2011 and 2012.22 Growing prosperity has created an era of rising expectations that China's repressive regime has been unable to throttle entirely.  Highly regimented factories, low wages, and 80+-hour workweeks led to unrest, strikes, riots, and even suicides.23 Moreover, adverse publicity about poor working conditions, child labor, and worker suicides caused American companies selling consumer goods like Nike and Apple to insist that suppliers improve pay and working conditions. 

 

Other Causes of "Reshoring"

Additional reasons why “reshoring” is growing are more difficult to quantify.

One reason “offshoring” has declined has been the difficulty communicating typical business information-–engineering change orders, invoices, shipping instructions, product specifications--half way around the world across a dozen different time zones.

A second reason is that many American companies see innovation suffering when engineering and R&D facilities are kept here while manufacturing was moved to  the Far East.

Yet a third reason is corruption--the threat of losing intellectual property to counterfeit good makers in countries whose respect for patents and contracts were nil. The amount of "knock-off" goods, from electronic consumer goods, drugs, luxury fashions, toys, to industrial products like airplane and automobile parts coming from China is huge.24  The list is endless, ranging from one Chinese firm’s heavy cast steel train wheels which the US International Trade Commission recently banned when it determined the company used stolen US trade secrets to make them25, to the flood of lightweight fake Zippo cigarette lighters which Zippo Manufacturing Co. says equals the annual 12,000,000 lighter production coming from its Pennsylvania plant.26  

Nor is the Chinese government an idle bystander. One observer said "stringent protection of foreigners' intellectual property is at odds with China's development strategy."27 Foreign firms operating in China complain that Beijing views the appropriation of foreign innovations as part of a policy mix aimed at developing domestic technology and production.28 

A final reason why “reshoring” is growing is political--unemployment rates in the US have not receded much from their peaks during the Great Recession of 2007-2008, making many companies sensitive to the charge of sending “American jobs” offshore. During the 2012 election campaign, Obama flailed Romney for sending thousands of jobs overseas when he ran Bain Capital, a hedge fund, while Romney blamed Obama for allowing Chrysler, whose bankruptcy was fast-tracked by the government, to plan Jeep production in China.

In short, narrowing differentials in labor costs, communication difficulties, and dodgy business practices have reduced the appeal of “offshoring.” Even Mainland China companies have joined American (and Japanese) ones in a continued search for low labor cost sites in Malaysia and Indonesia and other areas, but find skill levels low and infrastructures inadequate.29  

The appreciating value of the Chinese yuan has increased the cost to American buyers of all types of components precision machined in China, the rising labor costs in that country’s special economic coastal areas, the theft of intellectual property, and the cost and time to transport heavy valve housings for construction equipment, gears for heavy trucks, transmission cases for agricultural machinery, and turbine hubs for automotive use, to name a few,  across the wide Pacific have all contributed to the “reshoring” movement. True, leading companies in all industries, from General Motors to Caterpillar to small ones like Olsen Engineering (Eldridge, Iowa) all built factories in the Far East, Brazil, and elsewhere to “homeshore” their products to the growing markets in those nations. But the import of precision foreign-made components to be assembled into finished products in America and then sold domestically has fallen and is predicted to continue declining, giving efficient local producers like Tibor Machine Products, Kay Manufacturing, and DuPage Precision Products a chance to regain local market share if they can meet the prices demanded by local end users who still search for cheap parts.

Domestic precision job shops can take advantage of “reshoring” by becoming low cost producers of quickly delivered, high quality components. Astute job shop executives understand they must abandon notions of “good enough is good enough,”30 overcome internal inertia, and follow the five steps to success listed above to prevent today’s status quo of reasonable profitability from turning into tomorrow’s status woe of no profitability.

Forward thinking executives also know the growth of open market economies like those in Europe and the New World has always been accompanied by political liberalization and the decline of closed political rule. That day will come in Mainland China, either by evolution as it did in Britain in the 17th Century or revolution as it did in France in the 18th Century and Russia in the 20th.31   

Who knows when the safety value in China's boiler of social unrest will pop? After all, it took just one, just one faceless Tunisian street vendor named Mohamed Bouazizi, whose self-immolation following police confiscation of his unlicensed produce stand in December, 2010 to spark the Jasmine Revolution that led first the overthrow of Tunisian President Zine Al Abidine Ben Ali, and then spread across North Africa, destabilizing the entire region. Already, there have been anonymous calls for a similar upheaval in China’s major cities that have appeared on the quickly-suppressed Boxun.com website. When will a Chinese counterpart come forth, whose fury over the latest episode of contaminated baby food, adulterated milk, pollution, or the most recent industrial catastrophe  spark a similar upheaval?

Until then, astute American precision job shop executives know it is up to them and their efforts to make their operations efficient and competitive in order to survive…and perhaps to really, really prosper.

When are you going to start? 

Contact the author, Dr. Woodruff Imberman, President, Imberman and DeForest, Inc., for the articles cited or further information on improving managerial effectiveness, supervisory efficiency, or employee productivity, at info@imbdef.com, or PH: (847) 733-0071.

 

 

1 Drucker, Peter, Managing for the Future: The 1990s and Beyond
2 “Improving Profitability: Survey Report,” Target, Association for ManufacturingExcellence, Jan. 2007)
3  “Unsuccessful Executives in Auto Manufacturing,”Business Horizons, Indiana University School of Business, April1997.
“How Training Can Grow Your Bottom Line,” Ag Equipment Manufacturer, Spring, 2007.
5  “How To Boost Profits by Boosting EmployeeProductivity,” Manufacturing EngineeringMedia, March, 2013, and “Steps Suppliers Are Taking To Prepare for A LeanerTomorrow,” Area Development Magazine,August, 2012.
6 “All You Ever Wanted To Know About GainsharingBut Were Afraid To Ask,” Target,Assn. for Manufacturing Excellence, Nov. 1999.
7 “How Does Detroit’sPast Affect Your Future?” FoundryManagement and Technology, Dec. 2008
8 “How The Growth of Outsourcing Will AffectSuppliers,” Handbook of Business Strategy,1999.
9 Li, Wu, Xiong, “The End of Cheap Chinese Labor,”Journal of Economic Perspectives,Vol. 26, #4, Fall, 2012.
10 “Monks Without A Temple,”Economist Magazine, March 16, 2013,pg. 45-46, and Orlik, Tom, “Aging Chinese Face a Bleak Picture,” Wall Street Journal May 31, pg. A7.
11 Lovejoy, Arthur, Reflections on Human Nature, Johns HopkinsPress, 1961, Chap 4, pp. 129-152.
12 Coase, Ronald, and Wang, Ning, “How China Became Capitalist Macmillan, 2012.
13 Jacobs, Andrew and Buckley, Chris, “Elite in ChinaMolded in Part by Tiananmen,” New YorkTimes, June 4, 2013, pg. 1.
14 Chu, Kathy, “A Billion Strong but Short on Workers,” Wall Street Journal May 2, 2013, Pg. B1.
15 Ibid.,Li, Wu, Xiong.
16 Special Report, Outsourcing and Offshoring,” Economist Magazine, January 19, 2013.
17 Ibid.,Li, Wu, Xiong,
18 "A Giant Cage: Special Report, Chinaand the Internet,” Economist Magazine,April 6, 2013.
19 Wong, Edward, "In China, Breathing Becomes AChildhood Risk," New York Times,April 23, 2013, pg 1  
20 Bret Stephens “China Eco-Boosterism  Revisited,” Wall Street Journal  21 May2013, Pg A15
21 Spegele, Brian, “China to Let Public Veto a ChemicalPlant,” Wall Street Journal,  May 11, Pg A7. 
22 Areddy, James, “Deadly Fire Renews ChinaWork-Safety Fears,” Wall Street Journal June4, 2013, pg. A8 
23 Qi, Liyan, “Strains Show in China’s Labor Market,” Wall StreetJournal, June 11, 2103, pg. A14.
24 Cheryl D. Smith, “Counterfeiting and Piracy: How PervasiveIs it?”  and Hema, Vithlani, “TheEconomic Impact of Counterfeiting,” Organizationfor Economic Cooperation and Development,  1998.
25 “Intellectual Property Theft: Get Real,” National Crime Prevention Council
26  Newman, Barry, “The Lighter Side ofCounterfeiting Puts Zippo in a Fix,” WallStreet Journal, March 25, 2011.
27 Wong, Edward, and Tatlow, Didi, “Wide China Push Is Seen to ObtainIndustry Secrets,” New York Times,  June 6, 2013, Pg. A1. 
28 "Admit Nothing and Deny Everything," Economist Magazine, June 8, 2013, pg.50.
29 Chu, Kathy, “Not Made in China,” WSJ May 1, 2013 pg B1.
30 Ibid.,  AreaDevelopment Magazine, Aug. 2012, “Improving Profitability: Survey Report, Target, Assn. for ManufacturingExcellence, 2007.
31 Nef, John U. Industryand Government in France andEngland, 1540-1640,  Hayek, Frederik, Constitution of Liberty,1960, Fatal Conceit, 1988. 


Published Date : 7/29/2013

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