The Sentinel #3: China, Supply Chains, and Travels with Disco Dancer.
Happy Lunar New Year!
Before we get into this newsletter, thank you for subscribing to The Sentinel and putting your faith in my writing. (If you missed earlier letters, here is my first post on new beginnings). It is heartening to see people I respect and love, people I haven’t met in years, and friends, students, and teachers on the list. I will try my best to make this newsletter valuable. If you like what you read, please share. - Senthil
I plan to write more about Asia in this newsletter, particularly about India and China. I have to start somewhere. In the spirit of the lunar new year, I start the series on Asia, beginning with my efforts to understand China.
Understanding China is a very important key to unlocking the puzzle of how supply chains operate in practice. In teaching Operations, I always felt that we excel at teaching how frameworks and inventory policies work, but students expect, with good reason, a deeper understanding of complexities in the global supply chain. We should build this expertise.
This gap is partly ingrained in the culture — US’s biggest export to the world. People all over the world know a lot about the US: from profound to trivial, from Gold rush & Charlie Chaplin to Knives Out & the Kardashians. Hard to say this about China. India is a big neighbor of China. Both India and China have a billion people with long and complicated histories, and yet in India too, we learn very little about China.
Since 2018, through my students, colleagues, and friends, I have been trying to learn more about China. I list here 8 books and 8 people on Twitter from whom I learn a lot about China.
There are excellent and already famous resources on the internet, but my perspective is my own. I limited myself to good introductory books based on my interests: (a) Historical Perspective (b) Supply Chains & Chinese Society, (c) Travel & Memoirs. I hope you will find this list helpful.
Historical Perspective
Search for Modern China by Jonathan Spence
One proof of how long the history of China extends is clear from the fact that a book on “Modern” China begins in the late 17th century (end of Ming Dynasty) before the US was established.
Spence’s book is still the most accessible scholarly overview, and a page-turning read. I love how Spence often points out historical parallels to the past (for example how war-torn China in 1912-1949 is comparable to the Warring States Period). I notice that Chinese politicians always make arcane historical references in daily speeches, and those references is immediately understood.
Spence adds color by taking mini detours into individual lives, literature, and socio-economic conditions (e.g., Cao Xueqin’s writings, early Chinese immigrants in America, British East India Company, Pearl S. Buck, etc.). For empirically inclined folks, there is a lot to dig into, for e.g., sections on how the contemporary real estate usage and currency inflation in Guomindang Shanghai hastened the formation of the PRC.
In China, intermittent idylls of peace and a deeply-idolized social order bind the nation together, even as chaos seems to always lurk around the corner. My copy ends with the aftermath of Tiananmen Square. We know a whole lot more has happened since then. Spence’s book provides arguably the best lens to begin understanding the current dynamics in China.
On China by Henry Kissinger
The first third of Kissinger’s book illustrates China as a civilizational concept better than any other book. Kissinger explains why the Mongols, Manchurians, and other invading hordes all got absorbed into the culture that is China rather than imposing their own systems. (India and China are comparably syncretic in their own ways). China is a body in which the invading parasites themselves become antibodies, and eventually fortify the immune systems.
Kissinger provides an insider’s view of the political landscape and diplomatic wrangling leading to the “Nixon goes to China” moment — the birth of modern Supply Chains. To me, these details were probably the least reliable part of the book. Kissinger’s (candid?) characterizations of Zhou Enlai and Deng Xiaoping were quite interesting.
Supply Chains and Chinese Society
Factory Girls: From Village to City in Changing China by Leslie Chang
It was amazing to see the production factories in China bustling with women in the workforce. Some apparel factories that I visited had >75% women. In comparison, in textile factories in Gujarat, I barely saw women working. The female labor market participation rate is 61% in China (as a comparison, it is 56% in the US and 21% in India).
Leslie Chang follows the lives of two young “factory girls” and their many friends, in an ultra-competitive supply chain jungle that is Dongguan. As the book progresses, Leslie identifies her own life in their lives more and more. Unmoored from their families and hometowns, hustling daily for better lives, vacillating between hopefulness and destitution, their migrant lives are baking away the glare of the world. It is a great way to understand what aspirations build our fabrics.
One Child: The Story of China’s Most Radical Experiment by Mei Fong.
The median age in China in 1970 was 19.2 years and then rose to 37 years in 2015 (Statista data). At 38.4 years, it is a smidgen higher than the US (at 38.3) and expected to be 50 soon.1
This extraordinary and rapid aging of the population is almost entirely due to the radical one-child policy, which the Chinese government reversed only belatedly (with underwhelming results). We see throngs of young people in Chinese cities — it is only because there are millions of teenagers in China, and they are either city-born or if rural, migrating to urban areas. For the first time, since the Great Leap, China’s population fell this year.2
In a country where the Confucian value of filial piety is revered, the one-child policy has precipitated dramatic social aftershocks. With a great eye for details, Mei Fong dives into the new pressured social norms — the “child emperors”, “overqualified” women graduates, the marriage markets, young families struggling to take care of their grandparents, and the poignant lives of parents who lost their only children. This policy will have made the biggest difference for 21st-century China, as India becomes the most populated country in the world in 2024.
Poorly Made in China by Paul Midler.
Paul Midler’s book records a snapshot view of China documenting various mid-tier suppliers’ games of “cutting corners” in the 2000s.
A lot of people consider production quality in China to be low and cheap — a take I completely disagree with as I feel this opinion ignores that production talent is built by continuous improvement. From talking to several people on the ground, visiting factories, and looking at sourcing firms’ products, one can see production in China for top-tier firms are of the highest quality and made with expert production know-how.
So, how does one square these opposing perspectives? Can they both be true? My view is that production firms in China have acquired increased capability in the last decade and have “moved up the value chain”. This technological wherewithal developed in China to smoothen global supply chains took time.
This is why “friend sourcing” is not as easy as flipping on a switch. - me
Nevertheless, I think this is a great book as the premise of the book is experiential. Midler, a Wharton grad, makes several interesting points. For instance, Midler records the best argument I have heard for why counterfeits are valued in China: A counterfeit of a Ming dynasty vase reveals the cultural appreciation of the skill necessary in reproducing the aesthetic details. Like practicing calligraphy.
Memoirs and Travels.
River Town: Two Years on the Yangtze by Peter Hessler.
In my view, Hessler is the best writer on China. Peter Hessler’s book tracks two years of living in the town of Fuling in the Sichuan region on the banks of the Yangtze River. He was a Peace Corps volunteer and a waiguoren (foreigner) teaching English at a school, before the town with its history is submerged in the rising waters of the Three Gorges Dam project. Poignant, lyrical, and written with clear-eyed sensitivity, the book details the dashing dreams of his students and the hopes of the simple people holding on to the cusp of irreversible progress.
In those stuffy crowded boat rides, rains on paddy fields, morning runs, and mandarin struggles, the stick-stick men, xiaoweis and baijius, Shakespeare performances and party pyramids, Hessler paints loneliness and camaraderie in an evanescent world waiting to dissolve in the rising waters.
His follow-up books (Oracle Bones and Country Driving) are great as well. A good starting point to begin Hessler’s writings is his article called China’s Boomtowns which he wrote for National Geographic in 2007. A lovely read about supply chains, as it is a captivating study of a manufacturing plant that makes small rings for bras and nothing else.
Riding the Iron Rooster: By Train Through China by Paul Theroux.
People love to hate Theroux. He is an enthusiastic recluse and a borderline misanthrope: he loves to interact with people with cynical derision, keeping a studied distance from them. He is also introspective and forthright, which makes his curmudgeonly observations oddly heartfelt.
Xian, Dalian, Guangdong (Canton), Guilin, Qingdao, Chengdu, Lanzhou, Harbin, Beijing, Shanghai, Xiamen, and more — he crisscrosses everywhere, wiping his brow in the tropical heat of Southern China, and donning triple socks and multiple sweaters while shivering in the North. Along the way, he routinely annoys his “handlers”, argues with the rail guards, and quizzes people on what they had lost in the cultural revolution. Theroux’s travels are dated around 1986. In 2019, when I went, the bullet trains in China were comparable to the Shinkansen in their speed and comfort.
The last chapters are worth waiting for — Theroux takes a delightful rule-bending trip (the only driving trip done in the book) to Tibet. Remarkably, out of the blue, a famous 80s Bollywood song (“I am a disco dancer”) from my Indian childhood, pops up. Another song from the film (Jimmy Jimmy Aaja) became a covid-zero protest song — although all references to this protest are from Indian newspapers.
Stories of Sahara by San Mao.
Last but not the least, the best travelogue in the Chinese consciousness is not set in China at all and is written by a woman. San Mao 三毛 (Sanmao — three hairs — is a pen name for Chen Ping) is a brilliant writer. Sanmao in her autobiographical book set in North Africa is sensitive, reckless, observant, lonely, and forever yearning to be free. As Paris Review rightly calls the book “A hypnotic meditation on love and loneliness in a foreign place”.
Sanmao led an extraordinary immigrant life. She rebelled in school, moved to Europe at age 20, learned German and Spanish, and settled in Western Sahara (now the largest disputed territory in the world), until her husband’s accidental diving death, all by the age of 40.
Learning About China on Twitter
To wrap up, I recommend 8 people who are on Twitter (in no particular order) from whom I have personally learned about aspects of China over the past five years.
Angela Zhang @angelazhangHK Angela writes (among other things) on how Chinese antitrust regulations differ from the US and European systems. Here is her book on Chinese Antitrust Exceptionalism.
Yuen Yuen Ang @yuenyuenang Yuen Yuen Ang’s books on China’s gilded age comparison to the US is among the best persuasive argument that I have read on China. I will write about this on upcoming post and how her scholarly perspective on access and corruption explains a lot about India too in this newsletter.
Yiqin Fu @yiqinfu Political scientist who writes on business in China. Here is a fantastic article by her on Shein.
Tinglong Dai @TinglongDai Tinglong is impressively well-read and writes mostly about healthcare supply chains, and is one of the rare Asian public voices in Operations. Over the years, I have learned a lot through him about Asia and health care.
Yue Hou @YueHou7 Political Scientist at Penn who focuses on political economies of systems not held accountable by elections. Informed source on ethnic roles in Chinese labor markets.
China History Podcast @teacup_media. Over the years, I have enjoyed Lazslo Montgomery’s topic-based china podcast on China.
Dan Wang @danwwang Dan writes thoughtful essays on operations in China. His perspectives are studied, fresh and intriguing.
Karl Ulrich @ktulrich My Wharton colleague who teaches innovation and entrepreneurship. As a learner, he was the main source of encouragement as he invested in learning Mandarin (which I am too intimidated to attempt) and learning more about China. His book on China with Lele Sang is a distilled view of how different companies have fared in China.
https://www.worldeconomics.com/Demographics/Median-Age/China.aspx
https://www.npr.org/2023/01/17/1149453055/china-records-1st-population-fall-in-decades-as-births-drop
Thank you so much for sharing this writing. I can say with confidence that after living in the U.S. for over a decade now, this article is by far the best writing understanding China on its recent history, culture and modern manufacturing development. I'm deeply moved by and admired your perspective. I'm really glad that I have the opportunity to learn from you now and hopefully much more in the future.
Thank you for this. I have been trying to read up on China and Russia. This list is very helpful.