Chinese Immigration to the USA - Research Paper Example

Impact of Chinese immigration to U.S over decline of Michigan furniture market Ki-Jun Ahn (A96406220)  July 29 In last few decades a lot of people from the developing world, especially China have immigrated to the developed world in search of better economic, health or social opportunities. Till 1980s, the American furniture industry was the leading furniture industry in the world. Michigan was the hub of furniture production in the United States. With Chinese immigration to the U.S. a lot of Chinese labour force learnt the art and style of furniture making from the U.S. furniture manufacturers. By offering better economy of scale than the United States manufacturers, Chinese took over this market. Immigration of Chinese to the U.S. proved one of the very important points in this economic shift. Introduction: Impact of Chinese immigration to U.S over decline of Michigan furniture market cannot be denied. Plafker (2008) discussed how important it has become for the local/domestic U.S. furniture market to add value to its products. To remain competitive, the market needs to outsource less and become more productive in their own efforts. Plafker (2008) noted that while historically, the furniture industry in Michigan had thrived on local timber, most manufacturers had been forced to scale back or close down completely due to a lack of innovation and diversification within their manufacturing processes. Usually due to economic, political or social reasons, people from one country move to another country for permanent residence. This phenomenon is called as immigration. Looking at the map of immigration trend in the world, it is obvious that most of the immigration in last few decades have been from the most densely populated region of the world to the world’s most economically stable region. The immigration has been frequent to the extent that it has increased the competition for jobs and unemployment to the level that the shift of whole economic activities and industries can be seen from older region of dominance to newer ones. Key: Net Immigration for 2008. (Blue: Positive; Orange: Negative; Green: Stable; Grey: No Data available) Discussion: Taking the case of Michigan furniture industry, it can be seen that most of the profitable ventures related to Michigan based furniture industry are now operational in China. As the map shows, even in the recent years, the trend has been of migration from China, to the U.S and not other way round. As a result, Chinese work force has literally taken over the U.S work force, especially considering the point that Chinese have the capability of offering economy of scale at the best possible level in this world. Table 1: Percentage Share in Furniture Market (2006) Country Percentage Share in Furniture Market China 30% European Union (Basically Germany, Italy, France and the UK) 25% U.S 15% Source: McGregor, 2007. The world economy has changed in the 21st century and so is the furniture industry. At present 70% of the furniture production in the world is coming from the traditional producers. Some developing countries which have crossed the U.S in furniture production are China, Mexico and a group of countries from South East Asia. China has the biggest competitive advantage to offer. They have the resources, they have the potential, and they can offer economy of scale. The only thing they lacked was the knowledge and grip on the popular art and style of furniture. This is what the Chinese immigrants learnt from Michigan based manufacturers. Other important furniture producers come from the European Union. Canada and Australia also are two of the main producers (McGregor, 2007). The case under discussion here is however the fact that Chinese immigration to the U.S has led to the over take by Chinese furniture manufacturers. Mills (2007) indicated that the supply chain within the lumber industry finds itself in a difficult situation due to a decline in demand for local furniture in Michigan. Moreover, manufacturers have widely embraced diversification, going into newer revenue generating avenues like wooden cabinet production and wood flooring. The manufacturers need to keep such diversification under close scrutiny, especially in light of the current housing meltdown. Still, a business’ failure to avail itself of the benefits of outsourcing could spell doomsday for its enterprises. This is what happened to the Michigan furniture industry. Till 1980s, it was world’s most important hub of furniture production. Things changed as China offered unlimited business opportunities to global industry. With the global market becoming increasingly demanding, the furniture industry in Michigan is becoming more competitive. Unlike in the past, the competition is no longer limited to regional furniture manufacturers (Darling, 1984). With more and more Chinese now working in the U.S market, the unique selling points of the U.S based furniture giants are no more unique. Chinese immigrants have learnt the art and style of American furniture industry, and the concept has immigrated to China. From China it is much easier to produce low cost furniture for the whole world, and that is what is happening now. There is enough data to indicate that this industry in Michigan has incurred heavy losses due import of upholstered furniture from countries providing goods at cheaper rates. Unchecked immigration and globalization caused a negative impact on the Michigan upholstered furniture industry since the year 2000 (Aviva, 2007). Conclusion: China has taken over the Michigan furniture industry. The unique selling point was the style of furniture they offered. Once due to Chinese labour force influx in the United States that did not remain a secret, Chinese businesses were in the position to offer the same quality, style and design at much cheaper rates. In retrospect, Michigan furniture industry started to suffer in its prime markets – Asia, especially the Middle East. Its biggest competition, as in many other sectors, came from the emerging furniture industries of China, which offered off-shore customers low-cost products. Immigration from China has done a full circle. The Chinese labour force has learnt to do things the way U.S work force did. Chinese businesses have the capital required for starting off similar ventures in China. The over all result has been a clear shift of economic benefits towards China. China always had the benefit of number of people who can work on a project, but it took over economy only after the immigrations to developed regions of the world from China surpassed every past record. At present China is the leading industrial nation not only in the production of furniture but in other industries as well. The basic reason behind their success is the fact that they have learnt the existing methods and innovative approaches in whichever region they have migrated to. They have brought the knowledge back to their homeland. With ample resources, Chinese businesses have been able to make it big on the knowledge gained by experience of their average labour force. Immigrations have thus played an important role in changing the current shape of economy for both China and the U.S. References: Chomsky, Aviva. They Take our jobs! : And 20 other myths about Immigration. California. BeaconPress. 2007. Darling, Sharon. Chicago furniture: Art, Craft, and Industry 1833-1983. Chicago. W W Norton and Co Incorporation. 1984. McGregor, James. One Billion customers: Lessons from the front line of doing business. LA. Free Press. 2007. Mills, Nicolaus. Arguing Immigration: The Debate over the changing face of America. New York. Touchstone. 2007. Plafker, Ted. Doing Business in China: How to profit in the world’s fastest growing Market. New York. Business Plus. 2008. Read More