I would like to thank Kevin for pointing to the thread so that I could start a flame war(it was really bad day already). Mr. Massengale seems to not want to beleive that their is contradictory evidence to suggest that the number is wrong. If it was on Frontline, it must be true right? This flies in the face of what has been repeatedly published as Wal-Mart's imports from China and also the total amount of goods sold each year. The two numbers simply don't justify the often quoted 70% of goods at Wal-Mart being from China.
Now there is a Ted Fishman who makes a different claim, that being 70% of all goods at WM stores have a Chinese component of some sort. He made this claim supposedly in his book China Inc. This a is different assertion and I sent an email asking for verification and confirmation. I originally saw this at Wal-Mart Watch included in paragraph mentioning a dubious source of the fact 70% of all goods are from China.
In addition, I emailed a Sociologist from Duke University who was quoted in the Frontline piece and who Mr. Massengale also emailed and got a response. Professor Gereffi had written in his response that the often quoted trade number could 2 or 3 times larger because of indirect imports. That is products are imported by an American company rather than Wal-Mart directly. I will note that the published trade number is often mentioned as inluding both direct and indirect imports. Even taking, the 2 or 3 times number we still don't get near 70%. Also in his reply to Mr. Massengale, he claims that only 60% of WM goods are imported in total, directly contradicting the assertion that 70% are from China.
I have been searching far and wide for the origin of this number and have yet to find a seemingly reliable source. The closest I have come is to Mr. Fishman. Also, it is disappointing that no trade economist has taken this issue up. Much of the commentary isn't by economists at all, but rather sociologist. I had read through some the research on Professor Gereffi site and while it is very interesting work and applicable, we still don't seem to have reliable numbers nor research.
In the meantime, I'm going through some of my Investment Banking contacts to see what they have written. With the recent RMB revaluation, someone will have done work to see how this affects Wal-Mart.
Posted by Bob on July, 29 2005 at 01:31 PM
