Wednesday, August 29, 2007

chinese business practices

China's Business Practices Mirror 19th-Century U.S.
• THE BOSTON GLOBE -- AUG. 26

China's sometimes fast-and-loose business style doesn't necessarily reflect a distinct Chinese approach to capitalism. The U.S. itself once shocked the world with piracy, counterfeiting and food scandals, Stephen Mihm, an assistant professor of American history at the University of Georgia, writes in the Boston Globe.

Just as pirated DVDs and Harry Potter books abound in China, U.S. printers published British authors' books without permission or payment, provoking Charles Dickens to condemn the U.S. Hats, gin and paper made in the U.S. would be labeled as fine imports from Paris. An 1859 investigation in Boston found copper sulphate in pickles and watered-down milk bulked up with chalk.

When the U.S. became a major exporter, such practices scandalized Europe. In the mid-1880s, U.S. butter exports to Europe plummeted following the revelation that a lot of it was "oleo-margarine," made of beef fat, cattle stomach and ewe udders. In 1879, Germany accused the U.S. of exporting pork contaminated with cholera, leading several countries to boycott the U.S.

Prof. Mihm concedes there are many differences between present-day China and 19th-century America. China isn't a democracy, for one. But the many similarities suggest that what is happening in China today happens in most newly capitalist countries, as new technologies, expanding markets and wily entrepreneurs overwhelm systems of control designed for rural areas. If the U.S. in the 20th century is any guide, China's business practices will eventually improve under stiff international pressure, says Prof. Mihm. The landmark Food and Drug Act of 1906 was in part aimed at improving the reputation of U.S. food abroad. Also, just as U.S. copyright laws tightened as U.S. authors became popular overseas, Prof. Mihm predicts China will crack down on counterfeit DVDs if and when it has a significant movie industry of its own.

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