DONGGUAN, China -- Frank Lin joined fellow Chinese furniture makers at a hotel here last summer to discuss some alarming news from America: U.S. furniture companies were asking Washington to investigate ?;illegal?; Chinese trade practices and restrict Chinese sales to the U.S. Among the petitioners was one of Mr. Lin's longtime customers, Virginia-based Hooker Furniture Corp.
Mr. Lin's dismay turned to confusion days later when he received an e-mail from Hooker's chief executive. Hooker looked forward to an ?;exciting future?; doing business with China, said the message, and wanted to ?;continue the extraordinary growth we have had in the last few years with Asian imports.?;
Indeed, thanks largely to the imports, Hooker has boomed. It closed a factory in North Carolina last summer but has boosted profits and dazzled investors with a stock that more than quadrupled in two years.
?;I just don't understand what they are doing. It makes no sense,?; Mr. Lin said after receiving the e-mail in August. On his desk lay designs sent from America. Lining the wall, newly crafted chairs stood ready for inspection by U.S. buyers. ?;If they don't import, they die. They need us. So why do they want to hurt us??; Mr. Lin wondered.
His bewilderment flows from a much bigger tension besetting U.S. economic relations with China -- and the economic forces that underpin America's global hegemony. China's rise both supports the American superpower and embodies some of its self-generated vulnerabilities.
One of Logitech's big sellers is a wireless mouse called Wanda, which sells to American consumers for around $40. Of this, Logitech takes about $8, while distributors and retailers take $15. A further $14 goes to suppliers that provide Wanda's parts: A Motorola Inc. plant in Malaysia makes the mouse's chips, and America's Agilent Technologies Inc. supplies the optical sensor. Even the solder comes from a U.S. company, Cookson Electronics, which has a factory in China's Yunnan province next to Vietnam.
Marketing is led from Fremont, Calif., where a staff of 450 earns far more than 4,000 Chinese employed in Suzhou. China's take from each mouse comes to a meager $3, which covers wages, power, transport and other overhead costs