- Walmart in China ed. by Anita Chan
It was only a matter of time until a book emerged to address the symbiotic relationship between the world’s largest company and the world’s largest country. That [End Page 60] book is Walmart in China, the result of an international collaboration of scholars from the United States, Australia, Hong Kong, and China that seeks to examine the complexities of that bidirectional relationship.
Founded in 1960, Walmart grew from a chain of small stores in the Midwest to the position of world’s largest retailer, operating more than ten thousand units in twenty-seven countries. It is well known that China is the largest source of Walmart’s merchandise—about 70 percent—but in the last few years, China has also become a growing market for Walmart stores, which currently number more than three hundred. These two giants have become intricately connected, forging a synergy that is unparalleled in the retail business world. This association is the theme of this anthology.
Two primary issues are explored in this fascinating account: first, has Walmartization succeeded in China? Second, to what extent has China impacted Walmart’s brand of management practices? The book is divided into three sections that tackle Walmart’s supply chain, stores, and trade unions, respectively.
The first chapter, by Nelson Lichtenstein, sets the stage for “Walmart’s long march to China” by walking us from rural Arkansas to China. That journey began in 1985 as a result of the appreciation of the yen and other East Asian currencies (due to the Plaza Accord) combined with rising wages in Japan and the Asian Tigers (South Korea, Taiwan, Singapore, and Hong Kong). This confluence of factors triggered a massive manufacturing shift to China building on Taiwan and Hong Kong investment, already growing in China’s special economic zones. China was on the road to becoming Walmart’s most important supplier. In 2002, Walmart’s global purchasing outsourcing headquarters moved to Shenzhen in the heart of Guangdong, China’s export juggernaut province, and “by 2006 about 80 percent of the six thousand foreign factories in Walmart’s supplier database were located in China” (p. 29). Walmart’s trans-Pacific supply chain is now anchored in Guangdong and Bentonville (Northwest Arkansas is home to 750 branch offices of the largest Walmart vendors). This Walmartization process underscores the global power shift from manufacturing to retail distribution. Without owning its suppliers, Walmart is effectively able to dictate the terms of purchase, thus transforming them into “powerless price takers, rather than partners, deal makers, or oligopolistic price administrators” (p. 29).
The Walmartization of China is further investigated in the next three chapters. Walmart’s relentless pursuit of low cost and “always low prices” strategies—which applies to both customers and suppliers—put enormous pressure on its suppliers and, in turn, on their workers and subcontractors. The toy and garment industries are used as case studies of Walmart’s global production chain to illustrate not only the struggle of workers, who must overcome very low wages and adverse working conditions, but also the struggle of suppliers trying to survive on the narrowest of profit margins. Ironically, the implementation of Walmart’s Ethical Standards (ES) program, created in 1992, has exacerbated the imbalance in the retailer-supplier [End Page 61] relationship, shifting the main responsibility for compliance with labor standards to the factories.
The second part of the book offers insights on what it is like to work in a Chinese Walmart store and how Walmartization impacts Chinese workers. The first Walmart store opened in Shenzhen in 1996. In 2006, Walmart acquired Trust Mart’s 107 retail stores. In a riveting chapter titled “Corporate Cadres” (i.e., store managers), David J. Davies examines the store management and corporate organizational structure in China’s stores by comparing them to their counterparts in the United States and drawing parallels between Walmart’s corporate culture in China and Maoist ideology (hence the term cadres). “References to egalitarianism, loyalty, service, shared sacrifice, and...