I recently found an old passport that reminded me I had taken my first business trip to China early in 2002.
In the almost 20 years that have transpired, I’m certain I would no longer recognize many of the industrial hubs I visited, including Jiangsu, Guangdong, and Zhejiang.
Even so, certain memories of those visits are still etched in my mind. I remember the throngs of people fighting for space on the streets, the almost frenetic energy of the cities, the bridges, highways, and huge buildings that seemed to materialize right before my eyes.
But most of all I still remember the sheer determination of a country determined not only to have a seat at the global table but to sit at its head.
For me, China is a country of almost impossible contradictions.
On the same day that I would visit massive furniture plants so spotless one could eat off the floor, I would also tour furniture plants so unsafe as to cause any OSHA inspector to cry.
I also remember China as a study in light and dark, both figuratively and literally. I would be watching furniture roll off the most modern of finishing lines, then, without warning, the line would grind to a halt, the lights would flicker then dim, and I would be standing in the dark.
Lately, China’s power outages have been all over the news, but trust me, this is nothing new. It happened daily during my early trips there decades ago. Most of the reports correctly point out that more than half of China’s provinces are currently struggling to produce goods while being subject to power rationing.
These same reports point to a myriad of causes, including China’s shortage of coal, subsequent high coal prices, crazy weather, the country’s efforts to satisfy emissions goals, and the strain of the country’s manufacturers to meet hefty demand, domestically and globally.
While I am the first one to agree that each of those issues is valid, I am going to go out on a limb and throw two more possibilities on the table.
While what I am about to write may sound far-fetched, I’ve had numerous conversations with industry insiders who also wonder if the subsequent production slowdowns might be the result of not so the passive-aggressive payback for tariffs and anti-dumping fines imposed on Chinese-made wooden furniture.
Some have also speculated that this might also be a ploy to force price hikes.
Back in 2003, a group of domestic furniture makers formed the American Furniture Manufacturers Committee for Legal Trade and filed a petition asking that antidumping duties be levied against wooden bedroom furniture from China.
The group of domestic furniture makers prevailed, and the Department of Commerce issued an antidumping duty early in January of 2005, and the fines and duties against Chinese furniture have gone on ever since.
A few years ago, the government hit China with tariffs as high as 25% on just about all furniture categories, including mattresses. These moves helped Vietnam leapfrog over China as the largest exporter of wooden furniture to the U.S.
We know that the tariffs do not sit well with China. When Foreign Minister Wang Yi met with Deputy Secretary of State Wendy Sherman a few months back in Tianjin, Sherman was asked in no uncertain terms for help in getting the U.S. to dismiss all sanctions and tariffs.
And whether it was intentional or just a natural by-product of the situation, you can take this to the bank: Someone somewhere will be paying more to keep the lights on.
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