WEBVTT - Why is Everything Made in China? 0:00:04.240 --> 0:00:07.240 Welcome to Tech Stuff, a production of I Heart Radios 0:00:07.320 --> 0:00:14.080 How Stuff Works. Hey there, and welcome to tech Stuff. 0:00:14.120 --> 0:00:17.920 I'm your host, Jonathan Strickland. I'm an executive producer with 0:00:17.960 --> 0:00:19.840 How Stuff Works in My Heart Radio and I love 0:00:19.920 --> 0:00:23.200 all things tech. Kind of, it seems like I have 0:00:23.280 --> 0:00:25.880 to put a lot of qualifiers and when I give 0:00:25.960 --> 0:00:29.320 that introduction these days, and the reason I say kind 0:00:29.360 --> 0:00:30.680 of for this one is that I'm going to be 0:00:30.720 --> 0:00:34.360 tackling a pretty thorny subject. So in the United States, 0:00:34.760 --> 0:00:37.160 there's been a lot of talk about the trade war 0:00:37.440 --> 0:00:41.440 between the US and China, as both countries are slapping 0:00:41.560 --> 0:00:44.960 tariffs on goods and the whole world is watching an 0:00:45.000 --> 0:00:48.920 anticipation of a potential global recession. Now, this trade war 0:00:49.159 --> 0:00:53.200 has the potential to affect lots of stuff, obviously, including 0:00:53.280 --> 0:00:56.240 a lot of electronics. Now, chances are the price of 0:00:56.280 --> 0:01:01.160 your next computer, smartphone, tablet, or you know whatever other 0:01:01.240 --> 0:01:04.520 electronic device is going to be a little more expensive 0:01:04.600 --> 0:01:07.640 than earlier models because companies are going to pass on 0:01:07.680 --> 0:01:12.479 the cost of these higher tariffs to customers. Now, this 0:01:12.560 --> 0:01:15.640 leads up to a question, why are so many devices 0:01:15.680 --> 0:01:19.760 manufactured or assembled in China? How did we get to 0:01:19.920 --> 0:01:23.640 that point, and to understand that, we need to understand 0:01:23.640 --> 0:01:27.320 the history of industrialization in China. So this episode is 0:01:27.360 --> 0:01:31.039 really going to be all about China's journey to becoming 0:01:31.080 --> 0:01:36.520 an industrialized country, which honestly didn't happen that long ago, 0:01:37.360 --> 0:01:41.399 and how it then became the go to place to 0:01:41.520 --> 0:01:47.120 have electronics assembled before moving on to stores around the world. 0:01:47.840 --> 0:01:53.760 So this is a pretty complicated topic. It involves trade, politics, 0:01:53.960 --> 0:01:57.040 and economics, and they all have a lot of variables. 0:01:57.080 --> 0:02:00.480 So this is not as straightforward as technology tends to be. 0:02:00.600 --> 0:02:05.240 Because with tech, typically something either works as the designer 0:02:05.360 --> 0:02:09.120 had intended it to work, or it doesn't work. And 0:02:09.160 --> 0:02:12.720 if it doesn't work, with diligence, skill, and maybe a 0:02:12.720 --> 0:02:15.640 little luck, you can trace the reason that the tech 0:02:15.919 --> 0:02:19.520 isn't working, and you can figure out the cause of that, 0:02:19.639 --> 0:02:24.320 you can address it. But economics and politics, those are 0:02:24.440 --> 0:02:28.680 a lot more squishy than tech, and addressing one thing 0:02:28.720 --> 0:02:31.520 could throw something else out of whack. So I'm gonna 0:02:31.560 --> 0:02:34.520 do my best to kind of give an overview of 0:02:34.600 --> 0:02:37.120 where we got or how we got to where we are. 0:02:37.320 --> 0:02:41.400 So to understand the story, we really have to look 0:02:41.440 --> 0:02:44.440 at China's history over the last couple of centuries. And 0:02:44.480 --> 0:02:47.359 I know that seems like it's overkill, but I think 0:02:47.360 --> 0:02:52.440 it's really important to kind of understand the historic cultural 0:02:53.440 --> 0:02:58.840 influences of China and how that has shaped the modern 0:02:58.919 --> 0:03:02.920 day China. And I'm gonna warn you there really aren't 0:03:02.960 --> 0:03:05.200 a whole lot of good guys in the story. I'm 0:03:05.240 --> 0:03:10.079 gonna tell I'm sad to say so. The United Kingdom 0:03:10.200 --> 0:03:14.160 kind of entered into the Industrial Revolution really in the 0:03:14.200 --> 0:03:17.840 midst mid eighteenth century, so the mid seventeen hundreds, but 0:03:18.000 --> 0:03:21.320 it really got going in earnest in the nineteenth century 0:03:21.400 --> 0:03:24.920 or the eighteen hundreds, but China would lag far behind. 0:03:25.520 --> 0:03:30.359 At that time, the China government was an imperialist government. 0:03:30.639 --> 0:03:35.680 It was led by the the the Qing dynasty, which 0:03:35.720 --> 0:03:39.040 had been in control of China since the mid sixteen hundreds. 0:03:39.760 --> 0:03:43.680 Now by the eighteen hundreds, this dynasty was starting to 0:03:43.840 --> 0:03:48.320 deal with a progressively more unstable China. A large part 0:03:48.320 --> 0:03:51.880 of that came from foreign interference, and a ton of 0:03:51.920 --> 0:03:55.240 that had to do with British merchants who were smuggling 0:03:55.320 --> 0:03:59.320 opium into China. This is one of those terrible parts 0:03:59.360 --> 0:04:02.960 of the story. We've get into a whole part of 0:04:03.000 --> 0:04:06.600 why China is the way it is largely because of 0:04:07.400 --> 0:04:11.760 illegal drugs coming into the country. So the British merchants 0:04:12.080 --> 0:04:14.119 what they were doing was they were buying up opium 0:04:14.400 --> 0:04:17.200 in India. They would then travel to China and they 0:04:17.200 --> 0:04:20.760 would sell it for a large profit. Meanwhile, the Chinese 0:04:21.160 --> 0:04:25.559 we're dealing with a very real opium crisis. Addiction rates 0:04:25.560 --> 0:04:27.600 were on the rise. It was causing a lot of 0:04:27.640 --> 0:04:32.160 social and economic unrest. So the dynasty moved to address 0:04:32.279 --> 0:04:35.039 the social and economic issues that were growing as a 0:04:35.080 --> 0:04:39.040 result of this illegal trade, and the Chinese government uncovered 0:04:39.320 --> 0:04:43.640 and destroyed more than a thousand tons of opium the 0:04:43.680 --> 0:04:49.080 British merchants had hidden in warehouses in Canton, China. Canton, 0:04:49.160 --> 0:04:52.479 by the way, was the one place that China was 0:04:52.520 --> 0:04:56.840 allowing to be open to trade from UH with foreign 0:04:57.040 --> 0:05:00.839 parties like like the British. Other cities were off limits. 0:05:01.080 --> 0:05:05.440 China had very strict trade restrictions and was pretty insular. 0:05:05.480 --> 0:05:09.839 It wasn't very much welcoming the outside world to come 0:05:09.880 --> 0:05:13.120 into it quite as much. UH. Even though China has 0:05:13.160 --> 0:05:16.279 a very long long history with international trade, with stuff 0:05:16.320 --> 0:05:20.760 like the Silk Road, tensions between Chinese officials and British 0:05:20.800 --> 0:05:24.240 sailors grew over time, and then a couple of drunken 0:05:24.400 --> 0:05:28.719 British sailors killed a Chinese villager, and the Chinese government 0:05:28.800 --> 0:05:33.720 understandably wanted to apprehend the sailors and try them for 0:05:33.800 --> 0:05:37.960 this crime. The British government, however, was not keen on 0:05:38.040 --> 0:05:41.880 its citizens being subjected to the authority of another government, 0:05:42.320 --> 0:05:45.440 and so they refused to hand over the sailors, so 0:05:45.520 --> 0:05:49.960 tensions would continue to increase. The Chinese government then created 0:05:50.000 --> 0:05:55.239 a blockade around Hong Kong to prevent British tradeships from 0:05:55.279 --> 0:05:58.840 passing it. The British government didn't like that either, so 0:05:58.920 --> 0:06:02.440 they commanded British warships to break up the blockade, and 0:06:02.480 --> 0:06:06.479 this was the beginning of the First Opium War. The 0:06:06.520 --> 0:06:11.039 British forces were outnumbered, but they had superior weaponry and equipment, 0:06:11.200 --> 0:06:14.560 and so ultimately they won out over the Chinese forces. 0:06:14.880 --> 0:06:17.640 Britain was able to occupy the Chinese city of what 0:06:17.760 --> 0:06:21.599 is now Nanjing in August of eighteen forty two, and 0:06:21.680 --> 0:06:25.000 the Chinese government was forced to negotiate with Britain. As 0:06:25.040 --> 0:06:28.359 part of those negotiations, China signed on to some trade 0:06:28.360 --> 0:06:33.760 agreements that were incredibly favorable to foreign merchants, specifically British sailors, 0:06:33.880 --> 0:06:37.719 and put China at a disadvantage. It did, however, have 0:06:37.839 --> 0:06:41.200 the effect of turning several of China's coastal cities into 0:06:41.200 --> 0:06:45.000 centers of trade and opening those up two British traders, 0:06:45.040 --> 0:06:47.680 so it was no longer just Canton. And this is 0:06:47.720 --> 0:06:51.599 also where Britain would gain control of Hong Kong, which 0:06:52.000 --> 0:06:55.120 they would then hold onto until nineteen seven, when they 0:06:55.120 --> 0:06:59.200 were relinquished the territory and China regained sovereignty over it. 0:06:59.560 --> 0:07:02.280 But that's a story for a different podcast. That's one 0:07:02.320 --> 0:07:07.080 that's still having some repercussions today. Now, if that were 0:07:07.160 --> 0:07:10.680 all that this dynasty had to contend with, maybe it 0:07:10.720 --> 0:07:13.400 would have remained in power in China. But the nineteenth 0:07:13.440 --> 0:07:17.119 century also saw a period of natural disasters, had stuff 0:07:17.160 --> 0:07:20.160 like droughts and floods. I mean, keep in mind, China 0:07:20.360 --> 0:07:22.840 is an enormous country. You can have droughts in one 0:07:22.880 --> 0:07:25.000 part and floods in another part. They can happen. At 0:07:25.000 --> 0:07:28.640 the same time. The government also was raising taxes on 0:07:28.760 --> 0:07:31.640 people who really couldn't afford to pay them. Uh, and 0:07:31.720 --> 0:07:34.560 it created an environment in which people were unhappy with 0:07:35.080 --> 0:07:39.160 how things were, and so they decided to rebel, and 0:07:39.400 --> 0:07:42.960 that's why we got the Taiping Rebellion. Now that story 0:07:43.000 --> 0:07:46.880 gets super complicated, but the quick summary of the Taiping 0:07:46.920 --> 0:07:51.880 Rebellion is that it was the bloodiest civil war ever 0:07:52.360 --> 0:07:57.080 anywhere in all of history. The dynasty was ultimately victorious. 0:07:57.120 --> 0:08:01.480 They were able to stop the rebellion, but millions of 0:08:01.560 --> 0:08:04.640 people died in the process, and the government was in 0:08:04.680 --> 0:08:09.560 a weekend position afterward. Complicating matters further is that while 0:08:09.640 --> 0:08:12.920 this civil war was happening, the Chinese government would also 0:08:12.920 --> 0:08:16.040 have to deal with a second opium war, this time 0:08:16.080 --> 0:08:20.400 against not just Britain but also France. The war started 0:08:20.440 --> 0:08:23.720 after Britain sought to expand its trading rights in China 0:08:24.080 --> 0:08:28.200 and essentially used an event in which Chinese officials boarded 0:08:28.240 --> 0:08:31.679 a British ship and arrested several sailors as an excuse 0:08:31.720 --> 0:08:36.600 to use a warship to bombard Canton. The French joined in, 0:08:36.960 --> 0:08:39.880 and then hostilities increased until the British were able to 0:08:39.920 --> 0:08:45.960 occupy the city of Tianjin. The Chinese government again was 0:08:46.040 --> 0:08:50.920 forced to capitulate to disadvantageous trade deals with the West, 0:08:51.240 --> 0:08:54.640 including a law that now made it legal to import 0:08:54.720 --> 0:08:59.480 opium into Shanghai. Now, the Chinese government recognized that one 0:08:59.480 --> 0:09:01.559 of the reasons that the British and French were so 0:09:01.640 --> 0:09:04.719 successful in the Opium Wars was due to China's lack 0:09:04.760 --> 0:09:10.320 of industrialization. Around eighteen sixty, the dynasty the government began 0:09:10.440 --> 0:09:14.440 massive programs in an effort to industrialize China, but for 0:09:14.480 --> 0:09:19.360 many reasons, those efforts failed, and getting into all those 0:09:19.400 --> 0:09:22.040 reasons would take a podcast of its own, but a 0:09:22.040 --> 0:09:25.079 lot of it had to do with very different economic 0:09:25.120 --> 0:09:28.560 and political structures in China compared to those in the UK, 0:09:28.760 --> 0:09:33.200 which had of course already industrialized. The failures put the 0:09:33.240 --> 0:09:37.880 government deep in debt and people were suffering. The dynasty 0:09:37.920 --> 0:09:41.520 would hold on to power until around nineteen eleven nineteen twelve, 0:09:41.720 --> 0:09:45.520 but these events that happened in the mid eighteen hundreds 0:09:45.520 --> 0:09:49.880 effectively sewed the seeds for the dynasty's demise. So it 0:09:49.920 --> 0:09:55.480 was pretty much doomed based upon this, this group of 0:09:55.559 --> 0:09:57.920 things that all happened around the same time, with the 0:09:58.000 --> 0:10:02.480 various natural disasters, the rebellions, and the opium Wars. So 0:10:03.520 --> 0:10:05.520 the reason I'm spending so much time on this is 0:10:05.559 --> 0:10:08.240 to give you guys an understanding of where China was 0:10:08.360 --> 0:10:11.120 as a country. It had lagged far behind the United Kingdom, 0:10:11.360 --> 0:10:14.600 which had become industrialized nearly a century before the Opium 0:10:14.600 --> 0:10:18.120 Wars had started. And in place of this dynasty was 0:10:18.160 --> 0:10:21.560 a new government system called the Republic of China, which 0:10:21.600 --> 0:10:26.520 was modeled after Western governments, particularly the United States. In fact, 0:10:26.880 --> 0:10:29.840 the Constitution of the Republic of China called for a 0:10:29.920 --> 0:10:33.880 separation of government powers into different branches in a very 0:10:33.880 --> 0:10:37.280 similar way to the United States, with executive, judiciary, and 0:10:37.400 --> 0:10:42.199 legislative branches. Now that's not to say this transition went smoothly. 0:10:42.480 --> 0:10:46.400 Various regions in China fell under the rule of regional 0:10:46.520 --> 0:10:51.640 war lords. They asserted their own control of their particular territories, 0:10:51.800 --> 0:10:55.760 and they essentially ignored the Republic. Also, not long after 0:10:55.800 --> 0:10:59.600 the founding of the Republic, there was another big shift 0:10:59.760 --> 0:11:04.920 in politics. So over in Russia just next door, Vladimir 0:11:05.000 --> 0:11:09.480 Lenin lad the October Revolution and established communism as the 0:11:09.559 --> 0:11:13.680 system of government for Russia. Now, the ideal of communism 0:11:14.160 --> 0:11:18.120 is that all class distinctions within a population are stripped away. 0:11:18.280 --> 0:11:21.560 You no longer have upper, middle, and lower classes. None 0:11:21.559 --> 0:11:24.680 of that exists anymore. There's no such thing as private property, 0:11:25.120 --> 0:11:27.640 and the government is there to ensure that every person 0:11:28.120 --> 0:11:32.120 works and is paid according to their abilities and their needs. 0:11:32.240 --> 0:11:35.480 So if you're able to work, you work, and then 0:11:35.600 --> 0:11:38.560 you are paid according to how much you need in 0:11:38.720 --> 0:11:43.920 order to survive. Ideally, everyone in such a society would 0:11:43.920 --> 0:11:47.439 receive the support needed to in turn be a productive 0:11:47.480 --> 0:11:52.520 member of that society. Concepts like profit are meaningless in 0:11:52.600 --> 0:11:57.400 that idealization. But that's not really how communist governments have 0:11:57.480 --> 0:12:00.000 tended to shake out. Rather, a lot of those government 0:12:00.000 --> 0:12:03.720 has ended up being authoritarian structures that used government owned 0:12:03.760 --> 0:12:09.400 assets to maintain power over the general population. So while 0:12:09.400 --> 0:12:14.240 it was based on ideals of everyone is equal, it 0:12:14.280 --> 0:12:18.000 turns into the animal farm example of some people are 0:12:18.040 --> 0:12:21.640 more equal than others. The idea of such a system 0:12:21.640 --> 0:12:24.120 in which people of a country are the ultimate owners 0:12:24.120 --> 0:12:27.440 and the means of production was a very powerful one, though, 0:12:27.720 --> 0:12:31.120 which explains why so many people signed on to that idea, 0:12:31.320 --> 0:12:34.599 even though it turned out in practice it never really 0:12:34.679 --> 0:12:38.400 manifested that way. Now, the Communist Party established a presence 0:12:38.440 --> 0:12:41.520 in China in nineteen twenty one, which was just four 0:12:41.600 --> 0:12:45.559 years after the October Revolution in Russia. While all this 0:12:45.720 --> 0:12:49.280 turmoil was going on. China failed to kick off an 0:12:49.280 --> 0:12:53.959 era of industrialization and fell further behind. Joseph Stalin, who 0:12:53.960 --> 0:12:58.920 took over Russia upon Lennon's death in nineteen four would essentially, 0:12:58.920 --> 0:13:04.520 through force of will, lead Russia through a process of industrialization. 0:13:05.040 --> 0:13:09.280 But this process had tremendous costs and precipitated a terrible 0:13:09.360 --> 0:13:13.400 famine in Russia. And you would think that that would 0:13:13.440 --> 0:13:17.440 serve as an example for China. But we'll get to 0:13:17.520 --> 0:13:22.520 why that wasn't anyway. Starting in nineteen thirty one, Japanese 0:13:22.559 --> 0:13:26.360 forces began to invade and occupy parts of China, and 0:13:26.520 --> 0:13:30.439 a guy named maud Ze dong Uh climbed the ranks 0:13:30.600 --> 0:13:33.400 of the Communist Party in the nineteen thirties. Eventually he 0:13:33.440 --> 0:13:37.200 would become the chairman of the party. Now, after World 0:13:37.240 --> 0:13:41.599 War Two and after two decades of what was essentially 0:13:41.920 --> 0:13:46.080 civil war, Mao established the People's Republic of China in 0:13:46.200 --> 0:13:50.680 nineteen forty nine with the Communists in control of the country, 0:13:51.040 --> 0:13:54.560 and so they essentially erased the Republic of China, and 0:13:54.600 --> 0:13:58.360 now you had the People's Republic of China. It was 0:13:58.400 --> 0:14:02.479 not really a republic. The communist government was more authoritarian 0:14:02.640 --> 0:14:06.000 than that, uh and Maw as chairman of the party, 0:14:06.320 --> 0:14:09.679 was effectively the new head of state for China. The 0:14:09.760 --> 0:14:13.640 United States, already wary of communism and in the early 0:14:13.720 --> 0:14:16.960 stages of the Cold War, cut off trade and a 0:14:17.000 --> 0:14:20.440 lot of diplomatic ties with China entirely. At that point. 0:14:20.920 --> 0:14:24.400 Now we're gonna skip ahead to nine, Mao decides to 0:14:24.520 --> 0:14:28.040 follow Stalin's lead and through sheer control, try to force 0:14:28.160 --> 0:14:32.600 China through industrialization. He comes up with a five year plan. 0:14:32.880 --> 0:14:36.640 He calls it the Great Leap Forward. Now, Mao wanted 0:14:36.680 --> 0:14:40.640 to overtake the United Kingdom in industries like iron and steel. 0:14:42.200 --> 0:14:45.840 But they call his particular strategy a mistake is to 0:14:46.040 --> 0:14:51.560 drastically understate the results and the Great Leap Forward. Communities 0:14:51.600 --> 0:14:55.720 in China were upended to meet Mao's vision, and they 0:14:56.000 --> 0:15:01.240 were villages and towns were transformed into calm UNEs. Many 0:15:01.320 --> 0:15:05.160 tasks were collectivized, stuff like childcare. They would all be 0:15:05.600 --> 0:15:09.680 put into a centralized system and a few people would 0:15:09.720 --> 0:15:14.640 be charged to handle looking after whatever those centralized tasks were. 0:15:15.160 --> 0:15:18.640 Some people would be dedicated to farming, but a lot 0:15:18.680 --> 0:15:22.360 of people would be sent to work in small manufacturing facilities. 0:15:22.840 --> 0:15:27.640 Now also encouraged Chinese citizens to build backyard steel furnaces 0:15:27.680 --> 0:15:31.560 and smelters in an effort to produce more steel within 0:15:31.800 --> 0:15:35.200 China and thus reduced the country's need to depend upon 0:15:35.680 --> 0:15:39.400 foreign sources of steel like the UK. So citizens were 0:15:39.440 --> 0:15:44.120 actually expected to meet quotas of steel production, and in 0:15:44.120 --> 0:15:47.520 an effort to actually meet these these government mandated quotas, 0:15:47.760 --> 0:15:51.600 a lot of people were melting down useful stuff because 0:15:51.600 --> 0:15:55.240 they didn't have any access to anything like or where 0:15:55.280 --> 0:15:58.880 they could make steel by you know, smelting or so. 0:15:58.920 --> 0:16:02.480 Instead they were melting down like pots, pans, tools, stuff 0:16:02.520 --> 0:16:05.040 that they actually really needed so that they could try 0:16:05.040 --> 0:16:07.480 and meet these quotas. The problem was that the steel 0:16:07.520 --> 0:16:10.080 that they were producing was pretty much useless. So not 0:16:10.200 --> 0:16:12.720 only were they getting rid of things that they really needed, 0:16:13.000 --> 0:16:16.200 they were producing steel that couldn't really be used for anything. Now, 0:16:16.240 --> 0:16:19.600 on top of that, the farming practices that Mao insisted 0:16:19.720 --> 0:16:25.200 upon adopting would end up causing enormous environmental harm and 0:16:25.320 --> 0:16:29.760 ended up dropping crop yields over the next couple of years. 0:16:29.800 --> 0:16:33.320 So what followed was, just like in Russia, a terrible 0:16:33.400 --> 0:16:38.760 famine within two years. The Great Leap Forward was largely abandoned. 0:16:39.040 --> 0:16:42.400 Certainly was abandoned before the five years were up. Historians 0:16:42.520 --> 0:16:46.000 estimate that somewhere between twenty million to as many as 0:16:46.040 --> 0:16:50.000 forty five million or more people died as a result 0:16:50.200 --> 0:16:54.479 of this initiative. The attempt to produce steel had terrible consequences. 0:16:54.880 --> 0:16:59.320 People were deforesting large sections of China in an effort 0:16:59.360 --> 0:17:02.760 to fuel the smelters they were using. This in turn 0:17:02.880 --> 0:17:06.600 led to erosion and flooding and other problems. And the 0:17:06.640 --> 0:17:09.639 farming practices, as I said, they hurt the productivity of 0:17:09.680 --> 0:17:12.439 the soil. Even early on when there was a bumper 0:17:12.480 --> 0:17:16.840 crop of of food. In that first year, they actually 0:17:16.840 --> 0:17:21.520 produced more food than they had anticipated. A lot of 0:17:21.520 --> 0:17:23.680 that food ended up going to waste because there weren't 0:17:23.760 --> 0:17:26.880 enough farmers to harvest it, all so rotted in the fields. 0:17:27.400 --> 0:17:31.760 Mao's brute force approach to industrialization had failed and resulted 0:17:31.840 --> 0:17:34.680 in the deaths of millions of people, and China was 0:17:34.760 --> 0:17:39.080 lagging even further behind. Mal was not yet finished with 0:17:39.119 --> 0:17:42.360 his efforts. I'll explain what I mean by that more 0:17:42.480 --> 0:17:45.879 in just a moment, but first let's take a quick break. 0:17:53.320 --> 0:17:56.800 In the wake of Mao's failure with the Great leap forward. 0:17:57.240 --> 0:18:00.040 The Chairman of the Communist Party faced a lot of 0:18:00.119 --> 0:18:04.240 criticism and opposition within the party, and that's pretty understandable. 0:18:04.440 --> 0:18:08.400 His efforts had plunged China into a crisis of monumental magnitude, 0:18:08.720 --> 0:18:13.040 with millions dying. Mostly those were people from rural cities 0:18:13.080 --> 0:18:16.960 and the interior of China, because officials were shipping a 0:18:17.000 --> 0:18:18.879 lot of the food that was being produced at the 0:18:18.880 --> 0:18:22.439 farms in those areas off to the coastal cities. So 0:18:22.520 --> 0:18:25.280 the urban centers were getting more food than the rural 0:18:25.320 --> 0:18:28.040 centers where the food was actually being grown, and so 0:18:28.200 --> 0:18:31.639 the people who were growing the food were ironically starving 0:18:31.720 --> 0:18:34.919 to death. Other members of the Communist Party worked to 0:18:35.040 --> 0:18:37.440 kind of sideline now. In fact, there was a plan 0:18:37.920 --> 0:18:41.800 for mal to retain the title of Chairman of the 0:18:41.840 --> 0:18:45.440 Communist Party, but for it to be mostly a ceremonial 0:18:45.680 --> 0:18:49.240 title with no real power attached to it. Now obviously 0:18:49.760 --> 0:18:53.119 did not care for that one bit. Meanwhile, over in 0:18:53.160 --> 0:18:57.840 the Soviet Union, while the greatly forward was kind of progressing, 0:18:58.440 --> 0:19:02.439 there was a huge ship in politics. The Communist Party 0:19:02.840 --> 0:19:06.000 was still in power in the Soviet Union, but they 0:19:06.000 --> 0:19:09.840 had just renounced Stalin, who had died a few years earlier, 0:19:10.320 --> 0:19:12.640 and so this was a move for Russia the distance 0:19:12.680 --> 0:19:18.080 itself from the politics of Joseph Stalin, who was truly 0:19:18.280 --> 0:19:23.480 a terrible dictator. Mal was worried that this indicated a 0:19:23.520 --> 0:19:26.359 shift in the Communist Party in general that would ultimately 0:19:26.400 --> 0:19:29.680 have him removed from power, and there was a distinct 0:19:29.800 --> 0:19:33.639 philosophical disagreement on the nature of communism between the Soviet 0:19:33.720 --> 0:19:36.840 Union and China, and then the Soviet Union would cut 0:19:36.960 --> 0:19:39.840 ties to China. In the process of this, they were 0:19:39.880 --> 0:19:42.240 called some of their technical experts who were working in 0:19:42.359 --> 0:19:47.120 China who were trying to usher along this industrialization which 0:19:47.119 --> 0:19:50.879 had not yet really succeeded. And in nineteen sixty six, 0:19:51.080 --> 0:19:55.240 Mao calls for what he called a cultural Revolution, with 0:19:55.320 --> 0:19:58.600 the stated goal being to sort of squelch the revolutionary 0:19:58.640 --> 0:20:02.200 forces that Mao said were attempting to overthrow the Communist 0:20:02.240 --> 0:20:05.520 Party and deny China It's place among the world's superpowers. 0:20:06.200 --> 0:20:08.560 Mal would end up inspiring a lot of young people 0:20:09.440 --> 0:20:12.520 to to carry out this vision, and they formed groups 0:20:12.560 --> 0:20:15.280 called the Red Guard, and they would act out against 0:20:15.320 --> 0:20:18.880 perceived enemies of Mao and his vision for China. Sometimes 0:20:18.880 --> 0:20:22.360 that would actually include fighting with other Red Guard groups, 0:20:22.400 --> 0:20:25.439 so you would have two different Red Guard groups throwing 0:20:25.480 --> 0:20:29.480 down with like heavy weapons. Within a year, the various 0:20:29.560 --> 0:20:33.280 Red Guard groups had captured and assaulted many leaders in 0:20:33.440 --> 0:20:37.400 various regions of China, and China's official armed forces would 0:20:37.400 --> 0:20:40.160 also engage in combat with the Red Guard groups, so 0:20:40.560 --> 0:20:45.600 this became a multifaceted kind of internal struggle. Hundreds of 0:20:45.640 --> 0:20:49.120 thousands of people died in this and the country teetered 0:20:49.160 --> 0:20:53.320 toward anarchy while mal was trying to reassert control. Regional 0:20:53.320 --> 0:20:57.879 authorities would start to collect young people, specifically students in 0:20:58.040 --> 0:21:00.639 urban centers, and then ship them off to work in 0:21:00.760 --> 0:21:03.680 hard labor in the countryside in an effort to kind 0:21:03.680 --> 0:21:08.159 of squelch this intellectualism that they viewed as a dangerous 0:21:08.800 --> 0:21:13.439 um pursuit, something that would lead to unrest. Some leaders 0:21:13.440 --> 0:21:16.600 of the Communist Party were tortured and killed by members 0:21:16.600 --> 0:21:19.879 of the Red Guard. The revolution continued for a decade 0:21:20.359 --> 0:21:22.760 as Mao did his best to maintain his position as 0:21:22.760 --> 0:21:26.080 the leader of China, and in nineteen seventy six he 0:21:26.280 --> 0:21:29.840 died at age eighty two after a series of heart attacks, 0:21:29.920 --> 0:21:33.639 and that's when the Cultural Revolution really ended. It ended 0:21:33.680 --> 0:21:36.880 with Mao's death and also the arrest of several other 0:21:36.960 --> 0:21:42.120 high ranking members who were helping Mao. So after Mao's death, 0:21:42.600 --> 0:21:45.680 a veteran of the People's Liberation Army or p l A, 0:21:45.880 --> 0:21:49.200 that's the official armed forces of China ended up assuming 0:21:49.240 --> 0:21:52.880 control of the country starting in nineteen seventy eight. That 0:21:53.000 --> 0:21:59.360 person was Deng Xiaopeng. Now Dean would dramatically transformed China's 0:21:59.480 --> 0:22:04.000 economic The country would reverse its policy of discouraging foreign investment, 0:22:04.520 --> 0:22:07.080 though I should mention that Mao had really started down 0:22:07.080 --> 0:22:10.159 that pathway. Now had actually met in secret with Henry 0:22:10.200 --> 0:22:13.680 Kissinger in the early nineteen seventies and later much more 0:22:13.720 --> 0:22:17.880 publicly with Richard Nixon. But beginning in earnest in nineteen 0:22:17.920 --> 0:22:22.520 seventy nine, China began to initiate drastic economic reform measures. 0:22:23.119 --> 0:22:26.719 Rather than take a centralized, state run approach to the market, 0:22:27.119 --> 0:22:30.399 the government began to allow some free market activity and 0:22:30.480 --> 0:22:33.520 began to delegate much of the authority to provincial and 0:22:33.560 --> 0:22:38.919 local governments, thus decentralizing the whole process. Around nineteen eighty six, 0:22:39.280 --> 0:22:43.240 China established its open door policy. The country welcomed foreign 0:22:43.280 --> 0:22:47.240 investment and the creation of a private sector within China 0:22:47.400 --> 0:22:50.679 that would be guided by market forces, not by a 0:22:50.800 --> 0:22:55.320 centralized authority. By the early nineteen nineties, China would become 0:22:55.359 --> 0:22:58.280 the third largest economy in the world. The United States 0:22:58.320 --> 0:23:01.840 and Japan were in positions one too. China offered up 0:23:01.920 --> 0:23:05.880 tax incentives to encourage foreign investment and began to import 0:23:06.000 --> 0:23:11.000 foreign technology to augment the country's manufacturing capabilities, and started 0:23:11.000 --> 0:23:15.479 building out factories in its various regions, largely along the 0:23:15.520 --> 0:23:20.159 coastal regions. Deng would simultaneously re established the Communist Party's 0:23:20.240 --> 0:23:23.840 hold on the government, quelling all opposition, as would be 0:23:23.880 --> 0:23:28.399 particularly evident during the Tianamen Square event in nineteen eighty nine, 0:23:28.480 --> 0:23:31.600 and the party would maintain control even as the Soviet 0:23:31.720 --> 0:23:36.240 Union dissolved and Russian President Boris Yeltson banned the Communist 0:23:36.240 --> 0:23:40.560 Party from operating in Russia. Now, this uneasy balance between 0:23:40.640 --> 0:23:43.720 a free market approach to the economy and the more 0:23:43.800 --> 0:23:50.120 authoritarian approach to government led China into unprecedented growth. According 0:23:50.160 --> 0:23:53.439 to a June twenty, two thousand nineteen report from the 0:23:53.480 --> 0:23:59.360 Congressional Research Service, China's economy has effectively doubled in size 0:23:59.560 --> 0:24:04.480 every eight years because the private enterprises have to respond 0:24:04.680 --> 0:24:09.320 to market forces. They must adapt to remain competitive. Previously, 0:24:09.359 --> 0:24:13.560 state owned enterprises really just had to meet state mandated quotas. 0:24:14.040 --> 0:24:18.119 There was no competitive reason for you to try and 0:24:18.320 --> 0:24:21.440 do better. You weren't. You weren't rewarded for making more 0:24:21.480 --> 0:24:24.560 than your quota. You weren't even rewarded for making better 0:24:24.680 --> 0:24:28.800 quality stuff. So the free market definitely had a big 0:24:28.840 --> 0:24:34.080 influence in this. China's technological sophistication has depended heavily upon 0:24:34.119 --> 0:24:38.159 the adoption of foreign technology rather than relying on a 0:24:38.240 --> 0:24:42.359 domestic source of innovation, and that has been a really 0:24:42.480 --> 0:24:47.159 huge issue, particularly recently in China. The country built a 0:24:47.160 --> 0:24:51.280 lot of factories, and they were specializing in everything from 0:24:51.359 --> 0:24:57.359 textiles to plastic. Manufacturing factories abounded in industrial centers in China, 0:24:57.560 --> 0:25:00.880 again mostly near those coastline cities, and the country began 0:25:00.920 --> 0:25:03.239 to build out factories that could build all sorts of 0:25:03.240 --> 0:25:07.000 other stuff, not to mention facilities where workers could assemble 0:25:07.119 --> 0:25:10.480 finished projects like smartphones. In fact, that's one of the 0:25:10.480 --> 0:25:13.719 things China is mostly known for, is not making stuff, 0:25:13.760 --> 0:25:17.080 but for assembling, for putting it all together. Many of 0:25:17.080 --> 0:25:19.760 the chips and other elements in the smartphones would actually 0:25:19.760 --> 0:25:23.080 come from other places like Europe or the US or Japan, 0:25:23.800 --> 0:25:27.720 but the assembly would happen in China. This leads up 0:25:27.760 --> 0:25:32.280 to why so many electronic devices are put together in China, 0:25:32.359 --> 0:25:35.400 and there are a few really big reasons, so I'm 0:25:35.400 --> 0:25:38.840 going to try and touch on all of them. One 0:25:38.880 --> 0:25:42.320 reason probably the one that is cited the most frequently, 0:25:42.440 --> 0:25:46.679 although it's not necessarily the most important reason is the 0:25:46.800 --> 0:25:50.000 cost of labor in China is much lower than in 0:25:50.080 --> 0:25:54.320 many other parts of the world, like way way lower. 0:25:54.640 --> 0:25:58.640 So an entry level manual job at fox Con, which 0:25:58.640 --> 0:26:01.600 is the company responsible for an enormous percentage of the 0:26:01.640 --> 0:26:06.000 electronics being assembled in China, including pretty much all of 0:26:06.080 --> 0:26:11.080 Apple's electronics, the starting salary at one of fox cons 0:26:11.119 --> 0:26:15.680 factories is four thousand, two hundred dollars a year. That's 0:26:15.720 --> 0:26:19.359 three fifty dollars a month, or about eleven dollars and 0:26:19.400 --> 0:26:23.639