Chinese Production, American Consumption

Kate Merkel-Hess explores the convergence of economy and politics in the Sino-US relationship via Jonathan Chatwin’s “The Southern Tour” and Elizabeth O’Brien Ingleson’s “Made in China.”

By Kate Merkel-HessJuly 28, 2024

• History

• Nonfiction

IN MAY 2024, a Saturday Night Live skit featuring actor Jake Gyllenhaal parodied Chinese fast fashion in an ad from a fictional company named Xiemu. The voiceover reassures models who ask, “How so cheap?” with the company’s tagline: “Don’t worry about it.” Prison labor? Exploitation of religious minorities? Toxic materials? Don’t worry about it. 

After all, the voiceover asks, even if those things were true of their manufacturing, “would you stop buying it?” 

“No,” the chagrined models respond, one after another.

The skit encapsulates American consumers’ conflicted relationship with Chinese-produced goods. The setup is the persistent associations between poor quality, abusive working conditions, human rights violations, and those low, low prices, but the barb of the joke skewers American consumers’ moral apathy. Consumers might bleat, but they also like to buy, and millions of Chinese workers’ livelihoods depend on that continued consumption.

The skit highlights individual consumer choices, but the relationship between American consumers and Chinese manufacturers is shaped by the historical consequences of China’s economic liberalization policies. The result is a network of shared benefits and resentments that extends across the Pacific, influencing the lives of people in both countries.

Two books from this spring, Made in China: When US-China Interests Converged to Transform Global Trade by Elizabeth O’Brien Ingleson and The Southern Tour: Deng Xiaoping and the Fight for China’s Future by Jonathan Chatwin, excavate these late 20th-century origins of China’s economic transformation. Taken together, the two works reveal that the stereotype of China as a producer of low-quality products made by poorly compensated workers laboring under a regime that has chosen prosperity over human rights is a historical artifact, though they employ notably different topics, research methodologies, and narrative styles to do so.

An academic historian, Ingleson teaches at the London School of Economics. In Made in China, her first monograph, she builds deep, original case studies from archival research that draws on materials from the Nixon and Ford presidential libraries as well as corporate papers from American businesses that operated in China, like JCPenney. Ingleson’s sharp and illuminating study introduces key moments and figures in the 1970s transformation of Sino-US trade to explore how changes in US capitalism created the conditions for China’s economic rise. By taking us back to the early, uncertain moments of renewed Sino-US relations, Ingleson’s study provides that shocking jolt that the best histories do, reminding us of things forgotten beneath decades of layered teleological explanations for how we got from there to here.

Chatwin’s The Southern Tour is also concerned with the interweaving of past and present in modern China but reflects his expertise as a travel writer and journalist interested in the urban landscape. Chatwin utilizes a range of scholarly, media, and published sources to explicate the central role of premier leader Deng Xiaoping in China’s 1980s economic liberalization, a time “when the question of what China would become was far from fixed.” The narrative is structured around retracing the course of the titular 1992 tour when Deng consolidated the legacy of his economic policies. In exploring how past and present coexist in China’s urbanized landscape, Chatwin reinforces how past contingency—and contemporary memories of that “far from fixed” late 20th-century moment—continue to plague the present.

Each of the books, in its own way, sheds light on how a joke about Chinese fast fashion can be so densely layered in subtext, calling up immediate references for casual, Saturday night viewers to the collapse of American manufacturing, the ubiquity of transnational trade, the threat of Chinese authoritarianism, and their own culpability in a complex consumerist web. Ingleson’s and Chatwin’s research underscores that Chinese labor and the process of economic liberalization were not always connected to economic exploitation and political suppression, but their research also shows how the system in which we all now live and consume was finished like piecework, patched together to sustain systems of power and control in both the United States and China. 

The story of China’s economic liberalization, a process we now refer to as “reform and opening” (or, in Chinese, “gǎigé kāifàng”), typically begins in 1978. That year, the party leadership that took control following Mao Zedong’s 1976 death—a group of so-called “pragmatists,” foremost among them Deng Xiaoping—loosened restrictions on developing private industry and discussed the establishment of special economic zones that allowed foreign investment. Yet, to explore the first decade of renewed Sino-US trade, Ingleson takes us back to 1971, a time when it was not yet clear that China would become the factory of the world and the country was just beginning its process of what Ingleson calls its “great convergence” with the United States and global capitalism (the pendulum swinging back from the late 18th-century “great divergence” that historian Kenneth Pomeranz identified between China and the West in his 2000 book by the same title). That year, Nixon ended dollar-gold convertibility (known as the Nixon shock) and a few months later announced that he would visit the People’s Republic of China in 1972 to begin the process of diplomatic normalization. 

Nixon’s first overture to China was a 1971 easing of trade restrictions, but Ingleson argues that both China and the US initially saw trade as ancillary to diplomatic reforms. American businesspeople, however, began to wax almost immediately about the money to be made selling goods to Chinese consumers. They predicted that China would make massive purchases of American communications equipment, fertilizer factories, and oil extraction machinery. 

To the degree that they considered trade in the negotiations, diplomats and policymakers believed China would consume more than produce. Early trade figures reflected this. In 1972, the first year of trade, China purchased about $95 million in goods from the United States, mainly agricultural products like corn and wheat. By 1974, the figure was $933 million, blowing past experts’ predictions. Yet most of China’s purchases continued to be agricultural goods (in 1974, 70 percent of US-China trade was agricultural purchases), not the technology American companies were so eager to market to China. 

Chinese policymakers worried about the emerging trade imbalance. So, China’s Ministry of Foreign Trade began to actively market China’s workers as skilled and capable of producing high-quality goods at low prices. Within a few years, American companies pivoted their focus. As Ingleson writes, “What had once been a fantasy of 400 million customers slowly started to become one of 800 million workers instead.” Floating exchange rates facilitated the shift, making it easier for multinational companies to relocate manufacturing overseas. However, American and Chinese businesspeople also made concerted efforts to reframe China as a source of luxury goods produced by a highly skilled workforce.

For instance, Shanghai-born architect Veronica Yhap was one of the first Americans to visit China after Nixon’s announcement. Her Dragon Lady Traders imported contemporary clothing sold at Bloomingdale’s and other high-end retailers. Fashionistas snapped up Yhap’s $33 gray and blue Mao jackets, which Time described as “Chicom chic” (Chinese Communist chic). Ingleson argues that Yhap and others who jumped early into the China trade—such as Neiman Marcus, whose executive Stanley Marcus purchased pallets of Chinese antiques that sold out at its stores in mere hours—changed American rhetoric about China. No longer portraying it as dangerous “Red” China, a formidable enemy, they instead marketed China as a site for adventure, its products exotic and high-end, and even its revolution consumable as leftist cosplay.

The newly minted China trade experts consistently downplayed China’s communism. David Rockefeller, head of Chase Manhattan Bank and vice chairman of the government-sponsored National Council for US-China Trade, trumpeted how well-suited Chinese administrative and educational systems were to capitalism. Reframing China in this way created financial opportunities and simultaneously undercut enemies of the emerging neoliberal order at home, including labor unions and the American Left. 

The threat that lower-cost Chinese labor posed to American workers, particularly in the textile industry, was quickly apparent. However, through the 1970s, American importers continued to insist that China would primarily be a producer of niche luxury goods, such as silk scarves and vodka, playing on the initial framing of Chinese goods as high-end and high-quality and charging commensurately higher prices for China-associated cachet. For instance, Great Wall Vodka—known as Sunflower Vodka in China—was marketed by its American importer as “the world’s most expensive vodka.” Resonances of the so-called “Chicom chic” persisted in some marketing, however, as when Don King promoted a line of sporting goods from China and said that he was a good interlocutor because he spoke “the language of the third world.”

In one particularly poignant chapter focusing on the 1977 push by the Work Glove Manufacturers Association (WGMA) to establish quotas for imports of Chinese cotton work gloves, Ingleson demonstrates the effects of globalization on the lives of American workers. The WGMA lost its bid, and cheap Chinese gloves flooded the market. Many companies survived by moving their manufacturing overseas. However, the predominantly Black and Brown women who had labored in low-skilled cotton work glove factories in places where unions were weak, like the American South, lost their livelihoods. Their plight barely registered in American media at the time. Their leaders’ arguments that American laborers were the foundation of a society based on freedom, in contestation with the “captive and exploited labor force” of “Red China,” did not win the day. 

The conflict over work gloves—a low-skilled, low-cost disposable product—marked a turning point in China’s image as a luxury producer. By the mid-1980s, China was associated with low-quality, cheaply made products. The meaning of “Made in China” had itself been remade. However, blaming this transformation—and the concomitant loss of jobs in the United States—on China overlooks that the process had begun before China began to manufacture goods for the export market and was facilitated and managed by American companies, businesspeople, and policymakers. As Ingleson points out, the WGMA’s failure resulted from split interests—the top levels of American manufacturing benefited from offshoring manufacturing, as did American consumers, and poor, low-skilled American workers lost their jobs. 

While Ingleson focuses on how mid-level American businesspeople shaped the emerging Sino-US economic relationship, Chatwin centers his narrative on Chinese elite politics. The book is not explicitly a biography of Deng Xiaoping, but Deng is the focus, and the framing is Deng’s famous 1992 Southern Tour, which consolidated the legacy of his reform-era economic policies. Specialists will be familiar with much of the content, but the general reader will find The Southern Tour a breezier introduction to Deng’s role in late 20th-century China than, say, the late Ezra F. Vogel’s definitive, eminently readable but over 900-page 2013 biography Deng Xiaoping and the Transformation of China. 

Beyond Chatwin’s discussion of elite politics and economic policies in the 1980s and 1990s, there is a core point: Deng set China on the path to economic liberalization but paired it with brutal, unremitting authoritarianism. China watchers have long described this as the implicit deal between the Communist Party and the Chinese people in the wake of the 1989 protests—economic growth in exchange for limited civil rights. As a result, the 1989 protests, as much as Deng’s Southern Tour, form the scaffolding for Chatwin’s study. The tensions between economic reform and civil repression thus thread through the book, raising questions about popular appeal and, ultimately, who economic reform serves. 

Popular appeal was at the heart of the original Southern Tours, undertaken during the Qing dynasty, which governed China from 1644 to 1912. Then, to cultivate public sentiment and elite support, Manchu emperors based in Beijing toured the lower Yangtze Delta, a center of loyalty to the previous Ming dynasty. After the founding of the People’s Republic of China in 1949, Mao took a tour of the south in 1971. Deng followed suit, undertaking two tours of the south following his 1978 ascension to premier leader, first in 1984 and then again in 1992. It is tempting to note the imperial resonances, but as Chatwin makes clear, Deng’s Southern Tour served quite a different purpose from that of the imperial tours. As Chatwin describes, Deng’s economic policies were under attack, and the primary purpose of the 1992 tour was to gather popular opinion (firmly in favor of economic reform) to strong-arm truculent top leaders to support liberalization. 

The 1978 policies were not without critics throughout the 1980s. However, criticism intensified after the 1989 protests that brought students, workers, and ordinary citizens onto the streets of Beijing and many other Chinese cities. Though some of those around Deng advocated accommodation and engagement, Deng took a hard line, ordering the People’s Liberation Army in 1989 to clear Beijing’s streets and Tiananmen Square by indiscriminately murdering protesters and bystanders. 

Deng’s leftist critics argued that economic liberalization and the bourgeois tendencies it had unleashed were to blame for the agitation and unrest of the late 1980s. However, economic reform had the strong support of the people and local and provincial officials, who the new policies allowed to experiment, respond to local needs, and adapt to changing conditions. During and after the 1992 Southern Tour, Deng marshaled these popular opinions to counter the opponents of reform in closed-door meetings, away from even the limited state media coverage of the tour.

Yet Deng was clear that economic reform should be paired with strict government controls on the public sphere, referring to this as “a two-fisted approach.” This argument directly contested the fears of Deng’s critics that economic reform would lead China to a “peaceful evolution” out of socialism—a phrase used by US Secretary of State John Foster Dulles in the late 1950s to describe hopes for the transformation of socialist societies through exposure to capitalist ideas and goods. After the fall of the Soviet Union, the concept took on a renewed menace for the Chinese leadership. Concerns over the capitalist dilution of socialist values have troubled party elders ever since. 

The central preoccupations of Chinese state-making remain the twin concerns of maintaining economic growth and suppressing dissident speech. Increased military aggression and the marked retrenchment of civil society and administrative rationalization under Xi Jinping have not shifted these goals, for at the heart of both remains one central concern: the maintenance of the party-state. In this regard, Deng’s reputation as the architect of modern China is intact, for he brokered the compromise between economy and civil rights that underpins the Chinese Communist Party’s continued grip on power.

Chatwin relates an anecdote from Deng’s 1992 tour that illustrates the leader’s commitment to forward momentum. On the 1984 tour, Deng had gone out for a hike in the Pearl River city of Zhuhai. In response to his companions’ concerns that the path was too challenging for the then 79-year-old leader, Deng pronounced: “Do not turn back!” It was a phrase he would tellingly utter again on the 1992 tour, this time cheekily declaring (on yet another hike), “I will not turn back!” While the story demonstrates Deng’s sharp wit and commitment to change, it is also representative of modern China’s forward propulsion and resistance to grappling with the legacies of the past—and Deng’s role in setting China on such a course. 

Ingleson’s research, in examining the foundational role that American politicians, businesspeople, and consumers played in creating a Chinese economy dependent on cheap labor, also explores a strategically forgotten history. As she shows, the US was a central player in what Ingleson calls the “multidirectional process” of incorporating China into global capitalism, and she urges us not to forget it. As we head deeper into a period of Sino-US tensions, with demonization and recrimination of the other side as a nasty undercurrent to nationalism in both countries, it is worth remembering that we got from there to here together, and together is likely the best way out of this moment as well. 

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Featured image: Frank J. Mace. Factory Cloth Samples, 1935/1942. Index of American Design. National Gallery of Art (1943.8.3260). CC0, nga.gov. Accessed July 23, 2024.