Sunday, July 17, 2011

A Perfect Example of the Wonders of Globalization, and an Interesting Excerpt

So I was talking to a friend of mine the other day about fake ID's. Any college student in the US surely knows someone who has one, and loads of kids have their own. When I was in High School, the going rate was usually $100-$125, maybe $150 if it's either a very high-quality ID or if you're being ripped off. Even nowadays, my brother told me $75-100 is pretty decent. However, when I posed the question to a friend of mine of "how much would you expect to pay for a fake ID?", her response caught me so off-guard that I had to do a double-take.

"Oh, well I wouldn't pay any more than like $40"
"$40?! I've heard $100 pretty standard"
"Yeah, but people get them in China for like $30"

At this point, it should be noted that the person making this claim has traveled only (to my knowledge) through the US and Peru. She has never been to China, or Asia for that matter. Additionally, fake IDs are not something that you'd expect to see the going rate for online--you're certainly not going to go to Amazon and check how much fake IDs cost worldwide. However, through the magic of globalization, and more specifically the proliferation of knowledge and information across national borders with astounding ease and efficiency, people are able to know these things without ever having been to these places. Certainly, the most obvious result of this is that middlemen get killed--you can no longer have a guy going to China, buying 100 fake IDs at $25 apiece, and selling them in the US for $100. However, it also leads to more educated consumers, and at the end of the day, greater value for them.

But anyway, rather than going on a tangent about how globalization is changing the marketplace, I will simply leave it at this: how remarkable is it that someone who hasn't ever been to Asia, doesn't really know many people who have been there, and who isn't by any means an expert on the market for fake IDs, without hesitation knew that you could get a fake for far, far cheaper in China than one would expect. It's an amazing world we live in, that is unquestionable, and it's only getting more so.

The second part of this post is a quote from the book "China Inc." by Ted Fishman. As anyone who read my last post knows, I am moving to Shenzhen shortly, and Fishman had some interesting insights about it in his book:

"Shanghai, for all its wonders, may not be China's most amazing urban transformation. Those honors almost certainly go to Shenzhen, the city near Hong Kong that until 1980 was a fishing town of seventy thousand people surrounded by rice fields...Everything changed in 1980 when Deng Xiaoping selected the city as one of the country's first experimental centers for market capitalism and dubbed Shenzhen China's first Special Economic Zone (SEZ). In a godlike stroke--or better yet, the keystrokes of a computer gamer playing SimCity--China's paramount leader gave rise to a city that in short order would be bigger than Paris, Montreal, or Los Angeles."

Incidentally, Fishman also makes the rather interesting comparison of "There is no perfect historical analogue to Shenzhen's growth. Chicago may be the closest. The midwestern city took fifty years to record its millionth resident. Shenzhen took less than a decade, and after only a quarter century Shenzhen was a city of 7 million people".

To paraphrase (i.e. change the word India to China) another quote, this time from Slumdog Millionaire, "China is at the center of the world. And I am at the center, of the center"

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