The documentary American Factory has not only sparked much curiosity and conversations in the United States, but also touches themes that resonate with American expats in China. How do these American "fish out of water" navigate the white-water rapids in China?
For a dozen years, Paul Bailey, a lecturer at Jiangsu Normal University, has been observing the development in this industrial city, Xuzhou. Surrounded by an influx of factories for Fortune 500 companies like Caterpillar (U.S) and Fujitsu (Japan), this industrial city in Jiangsu province on the Yangzi River economy belt has drawn foreign investment attention non-stop to its various factories.
"Globalization and international trade are important things," says Bailey. "But in the last twenty or so years, the way it was practiced became only a search for cheaper labor rather than beneficial intentional trade."
Much in the same way that U.S., Japanese or European companies have been exporting capital to China since the 1980s, Chinese companies like Fuyao, the subject of the documentary, and Haier, a pioneer in Chinese enterprises operating abroad, have exported their capital investment overseas in recent years.
"As long as the factory management abides by the local laws and regulations, there should be no local opposition to these companies expanding their presence in the U.S.," Dr. Tim Klatte, Head of Shanghai Forensic Advisory Services in Grant Thornton China comments. Originally from Ohio, Klatte holds 25 years of China-related experience, of which nearly 14 years has been working in Shanghai building sustainable compliance programs for U.S. companies operating in China's complex and changing business environment. "It's also critical to employ local workers if the company plans to enter the local market and maintain a sustainable strategy."
In the 2019 China Business Report, released by PwC and The American Chamber of Commerce, shows that 47.1% of the 333 American companies operating in China who participated in the survey expect to increase their China investment in 2019, versus 61.6% in 2018. 22.5% manufacturers plan to decrease investment in 2019. Over the next 3-5 years, 57.8% of the members of AmCham Shanghai rated an economic slowdown as their biggest challenge, with U.S.-China tensions a close second (52.7%).
"A company like Fuyao is a cultural ambassador whose value matters much more, in the context of international relationship," says Ron Molenda, a senior manager in education and publishing industries, who feels sympathy with the Fuyao leadership team, led by Chairman Cao Dewang. Molenda noted that Cao and Fuyao stumbled into a huge American social issue around labor unions, which is substantially different from those in China.
According to PRC Labor Union Law, any Chinese enterprises or government-owned companies with labor unions should put aside 2% of workers' salary for its union's expense. Unlike the U.S, where labor unions operate independently, labor unions in China are a part of the enterprise, with its leaders assigned by the company.
"The challenge is often less about the culture gap, and more about the gap in expectations," says Molenda. Born and raised in New York City, with a decade in Taipei and six years in Shanghai, he points out that in Chinese corporate context, communication is often not about the words, it's about what's unspoken. This differs greatly from American styles of communication, which can be more direct and are often weighted towards an exchange of information.
"In the documentary, I see a lot parallels of the struggles when I was in China for the first time," When Mike McDonald, an architectural designer from Los Angles, came to China in 2012 for building Shanghai Disneyland Park, he and his team were trying to negotiate a new world.
Aside from environment and language issues, one of the major challenges he faced with his team was to produce a large number of Glass Fiber Reinforced Cement, where before they used to rely heavily on Themed Concrete Plaster which is hand-crafted on site. Therefore, the production for Shanghai Disneyland Park was different from previous park constructions.
Once the team got the first article done and authorized the production, Chinese factories mass-produced and streamlined it. Mike McDonald recalls the break-through experience of this massive production. He says that massive scale is one thing China does really well.
His team ended up working with hundreds of factories, venders and local suppliers across China to generate the material. As a result, the product had better quality control, the production is leaner and more efficient, and site construction time is reduced.
Taking advantage of the strength of Chinese factories, Mike McDonald's team applies the same method to their current Hong Kong Disney project to expend the castle. 50-ton pieces of steel frames manufactured in factories of Zhuhai across the bay were brought over by barges and lifted in place.
"It's a big transition from the way we used to work," Mike McDonald comments.
McDonald came to China with his wife, Alden McDonald, and children. This was not her first experience in China. Back in 1997, when Alden McDonald worked as technical designer for The North Face, traveling to China from San Francisco, to meet factories from Shenzhen and Guangzhou, she was amazed by the scale of Chinese labor production.
"I thought the clothing pieces were made by machines, " she recalls, "But actually there were thousands and thousands skilled people sewing and hand-making the clothings."
At that time, Chinese factories were known for low price, while she said her company was willing to pay more to get a higher-quality product. To reach an agreement from both sides, they made two kinds of products with different cost and quality for different markets. Now, the "Made in China" perspective has changed as Chinese manufacturing evolves.
"I'm impressed by the openness of both sides to be honest and truthful," says Alden McDonald. "The film resonated with me when seeing Chinese families who have to move to Ohio. How lonely and isolated it can feel."
When Alden McDonald first moved to Shanghai with her family four years ago, she had a vision that her kids could be friends with Chinese kids. But this hasn't happened as much as she had hoped, as the Chinese children often have to go to classes after school, to learn violin, math and soccer, etc.
Being a fish out of water can be frustrating. As a foreign actress in China, Alden McDonald is aware that a different mindset in China can lead to safety issues, "Americans tend to plan for the worst, but Chinese seems optimistic."
In the documentary, the American manager was concerned about the weather during factory construction, however Cao was positive that it wouldn't rain. Different outlooks like these are challenges that Alden McDonald faces working in China.
When she and her kids first worked on a Chinese filming set, they were there for thirteen hours in a room smelling of paint fumes, until an experienced actress came over to tell her that there are Chinese rules that protect children in terms of hours and safety.
"In China, you have to be responsible for yourself. There are rules and regulations but it lacks enforcement, " says Alden McDonald. After that experience, she established Foreign Actors Models Of Shanghai, FAMOS, an actors' community group with free membership. It has become a resource for over three hundred foreign actors to build their knowledge and relationships within the Chinese entertainment industry.
"We don't expect it can be as same as America, but at least we hope to understand each other, " says Alden McDonald. As globalization and automation bring rapid changes to both U.S. and China, we share the mutual position to navigate these interesting times.