EC215 - Made in China: The Political Economy of Business in China
January 2006
Professor Philip H. Brown
office: Miller 238
telephone: 859-5246
website: http://www.colby.edu/economics/faculty/phbrown/ec215/index.html

Information for the families and friends of course participants may be found here.

Course Description
Reforms instituted after Mao's death have changed the face of China's socioeconomic landscape. Communal farms have given way to Special Economic Zones, bond yields have supplanted grain yields at the top of the daily news, and imported cell phones have replaced Little Red Books as the accessory of choice. The Chinese economy has more than quadrupled in size in the last fifteen years, and the International Monetary Fund predicts that it will quadruple again in the next twenty.

The implications for global business are enormous. Foreign firms increasingly see China as being important, and businesses from T. Rowe Price to Taco Bell have sought to make inroads in the domestic market. Multinationals continue to shift production to China to gain access to low wages and pro-business policies, and the content of this production is increasingly high-tech. Joint ventures now produce twenty-seven percent of China's industrial output, and China's recent accession to the World Trade Organization will foster further global integration.

China's rapid growth has not been costless, however. For example, economic opportunities have disproportionately benefited coastal provinces, and Communist China now has greater income inequality than Canada and the United Kingdom. Moreover, labor migration has stressed the social fabric in urban and rural areas.

The course will focus on five primary sets of questions:

1. How are Chinese factories financed, managed, and staffed?
2. How have firms adapted Western production techniques to the Chinese environment? How do production techniques and management vary across industries and across different firms in the same industry?
3. What advantages does production in China afford in global markets? What special challenges do foreign producers face?
4. How can foreign firms crack the Chinese consumer market?
5. What are the implications of China's rapid economic growth for ordinary Chinese citizens?

Answers to these questions will be obtained primarily through visits to factories and businesses in Maine, Hong Kong, Guangdong, Anhui, Zhejiang, Jiangsu, and Shanghai. Site visits will emphasize the high tech, consumer goods, automobile, and sports apparel industries. Students will also have the opportunity to visit numerous sites of historical and cultural significance.

Prerequisites
This course requires basic familiarity with microeconomics at the EC133 level. This prerequisite may be waived at the discretion of the instructor.

Meeting Times
Students can expect the class to meet almost every day during Jan Plan, including most Saturdays and Sundays. Refer to the section labeled Jan Plan Schedule for details.

In addition, three mandatory dinner seminars will be held during the fall semester. Two dinner seminars will focus on economic and social issues in China to provide class participants with a background in these areas. One dinner seminar will focus on logistics for the class. Refer to the section labeled Pre-Departure Schedule for details.

Required Readings
This course has one required textbook that must be read prior to January and several required articles that will be read in conjunction with the dinner seminars. Mr. China will be available in the Colby bookstore this fall; other readings may be accessed through links below.

You will also be well served by maintaining current knowledge of business, economics, and politics in China and globalization issues in general. The following news sources offer excellent coverage: The New York Times, The Wall Street Journal, and The Economist. Current content is available through these links as well as through the library.

Evaluation
This course is experiential in nature. It is also subject to major revision as circumstances require. For both of these reasons, students are expected to participate fully, to be flexible, and to maintain high levels of enthusiasm. Your grade will thus be a weighted average of class participation as assessed by the instructor and each student's peers (50%) and scores received on two written assignments.

Paper #1: due Wednesday, January 4 at the beginning of class (15%)
Identify three major challenges for US firms conducting business with or in China. Explain why these challenges are significant and how they might be overcome.
Please limit your response to 3 double-spaced pages in a 12-point font. Include a separate title page and bibliography, as necessary.

Paper #2: due Thursday, February 2 at noon (35%)
The topic will be announced in class on January 4.
Please limit your response to 6 double-spaced pages in a 12-point font. Include a separate title page and bibliography, as necessary.

Cost
A generous grant from the Freeman Foundation will subsidize each student's cost of participation. The new cost is $2600. A generous gift from a Colby alumnus will provide financial assistance for several students who would otherwise not be able to participate in this course. See Professor Brown for details.

The course fee includes all travel within Maine, international airfare, all long-distance travel and lodging within China, most meals in Hong Kong and China, local transport and entry fees for all stops on the trip itinerary, and tips for our guides.

The fee does not include the cost of passports, required visas, immunizations, international student ID cards, health insurance (proof of international coverage is required), personal excursions, or personal expenses. The fee also excludes certain meals as discussed in the pre-departure orientation.

Enrollment Procedures
Minimum enrollment for the course is 10 students. Maximum enrollment is 12. Applications will be available beginning September 15 and are due at noon on September 30.

Enrollment is by permission of instructor. Priority in enrollment will be given to students who have taken EA254, EA257, EC292, GO255, or GO338. Other considerations may include previous international experience, academic maturity, academic and personal background, GPA, and specialized training.

Students who are accepted into the course must have a $500 credit posted to their student accounts no later than noon on October 7. Please note that payments made on student accounts go first towards any unpaid charges. Applicants should thus confirm their student account balances by checking http://www.colby.edu/sfs/. Student Financial Services asks that deposits be made by check, and that the applicant notes "EC215 China" on the check. Students who have applied for financial aid and who have not borrowed their full loan eligibility may be able to take a loan to cover the cost of the course. Please refer questions to Liz Bowen in Student Financial Services.

If a credit is not posted by the due date, the applicant's slot will be awarded to another student. Deposits are non-refundable. Participants who withdraw from the trip after the deposit deadline will be charged for the forfeited deposit.

Payment for the balance of the course fee is due by December 1, 2005.

Application and fee deadlines are summarized below.

Errata
Travel conditions in China may be difficult. Accommodations will be simple, some food may be unfamiliar, dietary preferences and restrictions may be difficult to meet, and the course will involve some strenuous physical activity. If you have any chronic medical conditions, if you have any physical limitations, or if you have experienced difficultly traveling in the past, please consult your doctor before applying to this program.

You are expected to adhere to Colby's policies on academic honesty. In accordance with these policies, students who plagiarize or cheat will be dismissed from the class with an F. Any such incidents will be reported to the Dean of Students and may result in suspension or expulsion.

The instructor reserves the right to send students back to the US at their own expense if students engage in illegal activities or if the instructor deems their behavior inappropriate or disruptive. In such cases, no refund will be given and no credit will be issued for the course.

Readings

Barboza, David. 2004. "In Roaring China, Sweaters are West of Socks City." New York Times December 24.

Beech, Hannah. 1998. "Made in China." Colby Magazine. 87(2).

Chan, Anita. 1996. "Boot Camp at the Shoe Factory." Washington Post November 3.

Clissold, Tim. 2005. Mr. China: A Memoir. New York: Harper Business.

Dollar, David. 2005. "China's Economic Problems (And Ours)." Milken Institute Review 7(3): 48-58.

"The Dragon and the Eagle." 2004. The Economist. September 30.

"Foreign Traders Flock to Chinese Manufacturing Center" 2004. AFX News Limited. September 19.

Forney, Michael. 2004. "How Nike Figured Out China." Time. October 17.

"The Halo Effect." 2004. The Economist. September 30.

Hessler, Peter. 2005. "Car Town" The New Yorker. September 26.

Hilton, Isabel. 2005. "Made in China." Granta (89):

Hundly, Kris. 2005. "Something Ventured in Shenzhen." St. Petersburg Times September 18.

Kristof, Nicholas D. and Sheryl WuDunn. 2000. "Two Cheers for Sweatshops." New York Times September 24.

McLaughlin, Kathleen E. 2005. "It's Chinese New Year. Will Workers Get Paid?" Christian Science Monitor. February 1.

"The Real Great Leap Forward." 2004. The Economist. September 30.

Zwolinski, Matt. 2003. "Social Issues Encyclopedia Entry #167 - Sweatshops." http://home.sandiego.edu/~mzwolinski/Sweatshops_essay_web.pdf