HONG KONG -- As countless Chinese factories supply overseas customers with inexpensive merchandise, the world pays a different price, a much higher one, than most consumers imagine.

“Probably the most glaring example that we face everyday is the air pollution,” said Alexandra Harney, the author of a new book, The China Price, The True Cost of Chinese Competitive Advantage (2008, Penguin Press, 337 pages). She spoke at Bookazine, a store in Hong Kong’s Central Business District.

Pressures from consumers and Western companies for lower prices, plus China’s rampant corruption and lack of transparency, take “an untold toll in human misery and environmental damage”.

For years, migrant workers from across China have flocked to factories in the Pearl River Delta, adjacent to Hong Kong. Often they live in factory dormitories and send their modest earnings home to families.

Inspiration hit soon after Alexandra moved to Hong Kong in 2003. “I was taken to visit a textile factory in nearby Zhuhai,” she said. “Seeing thousands of young workers, men and women, hunched over sewing machines impressed me, so I hung back and, with an interpreter, spoke to one of the women on the line. When I asked about her life, she told me she earned only US$100 per month. She sent it all home to her family and kept money only for soap and tissue. I thought, ‘Wow, she’s really extraordinary. Does the world know about this woman? Does she realize how much the world relies on her?’ Soon I talked to more workers, factory managers, activists, auditors and buyers.”

Many factories have Hong Kong management. “The extraordinary wealth in Hong Kong is largely a byproduct of what happens on the Pearl River Delta,” Alexandra said.

“The factories boost the living standards for millions of people in China and do nice things for the pockets of many Hong Kong businessmen. But they have other impacts for workers, the environment, China as a whole and, consequently, the world.”

From Chevy Chase, Maryland, Alexandra, age 32, has worked in Asia for nearly a decade, often covering China and Japan for The Financial Times. She joined the FT in Tokyo, where she’d studied. Frequently, she appears on Japanese television.

The China Price is her first book. “I hope to write more,” she said. “I’m fascinated by the intersection of human stories and global themes – how giant shifts in politics and trade affect lives. For me, it’s always about individual stories.”

In China, transparent business practices appear unusual. Some companies use “model factories” as “false windows” to hide illegal practices that may affect product safety and workers’ well-being.

Overseas buyers may have “social responsibility programs”, but “how they monitor factories and try to get information from them doesn’t work. It’s too easy to lie. There’s too much subterfuge by the factory managers just trying to keep the orders and survive.”

Does Alexandra expect a backlash from China’s government or its companies? “Ultimately, everyone’s concerned about future risks,” she said. “My approach isn’t to single out individual companies. It’s to stimulate thought about the bigger picture.

“Much of my book reflects what the Chinese government already knows. It, too, talks of migrant workers’ rights being abused, factory conditions needing improvement and the environment being damaged.”

So what’s the bottom line? “Everyone needs to be more aware and to consider where products come from, how they’re made and why they’re so cheap,” Alexandra said. “It matters for quality and whether we feel good about what we buy. If we think about how we get US$3 T-shirts or $30 DVD players, then we have a better chance to positively affect Chinese workers’ lives.

“I hope that my book makes a difference. If people realize it’s about the unseen elements and costs of Chinese factories, then I think they’ll care more.”


Buyers begin reading, even as Alexandra signs.

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