I don't
and here's why - taken from
Testimony Before the Full Committee of the House Committee on Ways and Means October 31, 2003
"Selling Out?
When one considers the role Walmart has had in transferring American jobs to China, it is staggering. It is particularly ironic that Sam Walton's biography is titled "Made in America." In it he explains his policy of buying from local producers. He reasoned that if Walmart bought from local producers, the people surrounding the stores would have money to buy things at Walmart. At one time, Walmart did buy mostly American products. However, that has changed.
Consider a Harvard Business School case study on Walmart circa 1995 (shortly after Sam?s death). The study covers Walmart's 1994 entry into China. At that time Walmart's plan appeared to have been to set-up retail in China. The case quotes, "Walmart carried more than 1000 different branded products, most items are directly imported from America representing the best sellers in many categories..." (HBS case 9-795-118)
Today, while Walmart?s retail operations in the Far East are modest, Walmart imports an estimated $12 billion in goods from China. So instead of selling in China, they are buying in China. A WSJ article suggests that Walmart buys 70% of its goods from China - all subsidized by the Chinese government. (Low Value of Yuan Helps Companies Dependent on Cheap Manufacturing, WSJ 9/4/03)
So what happened to the 1000 American brands that they were going to take to China? Do we imagine that when they got there, Chinese producers just happened to have exact duplicates of their American supplier's best products?
It would appear that Walmart shifted focus from selling to buying, recognizing that the currency subsidy gave them a massive potential competitive advantage. It seems only too likely that, product-by-product, Walmart took some 1000 leading indigenous American products to China, and arranged to have them copied in China. Perhaps they gave them the specifications, assisted in setting up production, and arranged the delivery under guaranteed orders. Now the American companies are out, and Chinese firms have set-up to capture the business.
There is certainly nothing illegal about this activity. But the selling out of the domestic supply base seems at odds with Sam Walton?s original vision. Walmart accepts vast subsidies from the Chinese government on Chinese products. Profits are boosted, and Walmart gains large chunks of market share with low pricing made possible by the subsidies. China benefits by getting the business, and can proceed to build industrial capacity to displace the US capacity, assisted by a clear view of the products to be duplicated. And finally America loses as domestic companies are driven out of business, and manufacturing employees lose their job. Walmart is the rogue-purchasing agent of America, Inc., who benefits individually while damaging the broader enterprise, and China is the vendor buying the business by subsidizing Walmart?s profits."