One Jump Ahead of China

 Domestic producers of polyethylene film and bags are having a tough time with imports. Asian producers, especially Chinese, are underselling U.S. processors and even causing plant closures here. That’s the complaint of domestic manufacturers who allege the Chinese are engaged in the unfair trade practice known as “dumping,” and they want the U.S. government to stop it.

Chinese bags are making inroads because they are not only cheap but high quality. Senior Editor Jan Schut went to China this summer to find out how they make such good bags and sell them for so little. She found those bags aren’t coming from subsidized state industries but from a bunch of small, private firms that don’t pay much for land, construction, labor, resin, or the locally made machinery. And these processors are surprisingly adept at squeezing more film out of a pound of resin.

Read Jan’s article and you’ll recognize a familiar historical tide that is unlikely to be held back by trade sanctions. China is a poor nation that is climbing the same economic ladder that others have climbed before in Japan, Korea, Taiwan, and Hong Kong. China has thousands of mom-and-pop entrepreneurs and millions of workers who endure long hours and Spartan living conditions for skimpy profits or wages. But China’s youthful private industry is not competing on price alone—it has quality, too. To get quality at that price, they need—and have—lots of labor and run their machines at painfully slow rates. We couldn’t make money that way, and they don’t make a lot.

That may not add up to unfair trade practices, but it still threatens livelihoods here. How can we compete? As we have done before,we will keep a step ahead through innovation. We will make our plants even more productive and will develop new products for them to make. We will focus less on commodity films and more on high-value, multi-layer structures that use cutting-edge materials and tooling. Someone else can always do the simple jobs cheaper. We must do the sophisticated jobs better.