I’ve always understood from a theoretical perspective why outsourcing is such an attractive option for many US companies. But its only in the past couple of weeks that I’ve developed a far more concrete appreciation for the economic forces involved.

Traveling in China is not unlike constantly swimming upstream through a torrent of human flesh. There’s a suffocating crush of people everywhere you go - in restaurants, on the streets, at the ticket counter. There’s simply no escaping it. This makes it easy to see how the cost of Chinese labor can be one of the cheapest commodities available. Equally obvious is the impact that cheap labor has on everyday life.

Clever innovators in the Western world have developed innumerable technologies which exponentially increase the productivity of a single person. From what I’ve seen thus far, little of this has made its way to China:

  • In Bejing, I passed a construction site which required some cables to be strung through a section of sewers. Rather than renting a vehicle with some horsepower to quickly tow everything into place, the construction firm hired over a dozen men to collectively (and ineffectively) tug at the cables, all the while yelling the Chinese equivalent of “heave-ho.”
  • One of the hotels that I stayed at had the exact same card-based lock configuration installed in every room. It was cheaper for management to pay someone to carry the one key card they had, and be available around the clock to unlock the door for guests as needed, than to hand out distinct key cards for each room.
  • Every retail establishment I hazarded had at least a 5-to-1 ratio of sales people to customers. I was swarmed every time I came within arms reach of a given counter. Its a stark contrast to US supermarkets, which are clearly moving towards automated check out.