It was recently argued to me that Chinese companies building factories in Egypt (or any foreign company for that matter), should be regarded as a positive thing because, “China is China today only because of foreign companies locating their factories there”.
By “China is China today” he meant, of course, China as the second largest economy in the world; he meant the myth of China’s dynamic economy. And here is the fundamental problem when discussing economics.
There are those who discuss according to the paradigms of power, and there are those (very few) who discuss economics according to actual existing reality.
There are those who believe unquestioningly in the Neoliberal sales pitch; the bullet points about investment, GDP, trade, technology transfer, jobs, and so on; and there are those (very few) who believe the actual existing results of Neoliberalism in the countries victimized by it.
There are those who accept that increasing the number of billionaires in a country equates to economic prosperity, and there are those who instead observe the drastic disparity of wealth, the disintegrating infrastructure, the rise in the cost of living alongside the deterioration of the quality of life for the majority of the population, and define it as economic failure.
So. China. Second largest economy in the world; GDP of $9.3 billion; constitutes 22% of all global manufacturing; the number of super rich increased over the last decade by about 12,000%. Great economic miracle, right?
It depends who you ask.
A worker at a Foxconn factory, manufacturing iPods for Apple Inc may disagree. Workers in these plants commit suicide so frequently by jumping out the windows of their prison-like labor accommodations that managers had to install special netting to prevent the bodies of workers from smashing into the ground.
The average worker in a foreign factory earns about $2 per hour, they are regularly forced to work up to 100 hours of overtime every month, and conditions in the factories are riddled with human rights and safety violations. Labor unions are illegal in China, by the way.
82 million people in China are living on less than $1.25 per day. The country has one of the largest gaps between rich and poor in the world, and it is increasing. So, yeah, for the millionaires who became billionaires and the extremely wealthy who became millionaires, things look great. For the actual population, it Is quite a different story.
When China wants to outsource manufacturing to, say, Egypt, bear in mind, they are doing that intending to earn more profit from doing so than they could make by manufacturing at home; more profit than they can make by manufacturing in rural China at salaries as low as $130 per month, with no safety standards. So, imagine for yourself what that means you can expect from Chinese factories in Egypt.
Yes. China is China because of multinationals exploiting Chinese labor, benefitting a tiny slice of the population, and enslaving the rest. Can Egypt be China? Of course, but why on earth would any decent person hope for that?