Wal-Mart’s China Risk is Rising

Sunday, June 3, 2007 15:16

For a wihle I have said that if the U.S. government were really serious about closing the trade gap they would take a trip to WalMart.

And I don’t mean their local neighborhood supercenter, but Wal-Mart HQ.

Until recently, it was a little known fact that the company which built on “Buy American, it Could be Your Job” was China’s 6th largest trading partner. That if you looked at goods imported from China into the united States, over 15% of those goods landed in a Wal-Mart.

Now, I do not point this out nor am I making them the focus of this post because I do not like Wal-Mart. Actually, I have a lot of respect for a company that goes from one store, to the leading retailer. However, if the U.S. Congress were really serious… they would have made the call a long time ago.

Well.. it appears someone else has beat them to the punch, and unlike congress, the union rarely gives up a fight with any organization they feel locks them out of the process.

According to the Forbes article Union Attacks Wal-Mart on China Goods

WakeUpWalMart.com unveiled Thursday what it called an effort to turn conservatives against the retailer with ads alleging Wal-Mart had turned its back on Walton’s values since he passed away in 1992 by increasing its buying overseas.

Now, as I am not a Walton, I am not sure what the true values of Wal-Mart are, however they have done an excellent job of aligning themselves as the retailer of choice when looking for the lowest priced goods… and so, it should not be surprising that they are buying from China.

With so much of the trade balance being owned by Wal-MArt, it really has made itself an easy target for those competing for a chair in the 2008 elections. Wal-MArt’s labor issues aside, this is a topic that could really grab hold in America as many of the categories that are purchased in China, were ONCE made in the U.S.A: textiles, PET FOOD, Levi’s, etc…

WakeUpWalMart.com said it would be airing a 30-second television ad in 30 markets in the South and Midwest this summer, mainly during local news programs, for a total cost of $1 million.

In my mind, this effort by the union could be dangerous as the message may spread outside of the union and into the general populas. Which will be interesting to watch how Wal-MArt defends itself over the next 18 months.

But more interesting to me is to think of the supply chain implications should Wal-Mart see a broad-based pushback from consumers. How would they move buying back to the U.S.? Would consumers take on the additional cost? What would be the effect on the shipping industry? etc?

Both comments and pings are currently closed.

2 Responses to “Wal-Mart’s China Risk is Rising”

  1. Fleet Driver Trainer says:

    October 2nd, 2008 at 2:19 am

    The pros and cons of the global economy…. Why not just welcome the opportunities?

  2. JM says:

    September 28th, 2010 at 7:42 am

    The US Government is testing a new theory, that economic trade will change a country more quickly that a Cold War will. With the new Rise of Russia and it’s seeming slow reintegration they are worried that while they ultimately won the Cold War, they also lost because the result is simply the same Russia just weaker but growing ever powerful once more.

    The stakes could NOT be higher, because at some point China will have to decide what it’s priorities are, whether it wants to regain all it’s former territory (Vietnam, Burma, Laos, Cambodia, Taiwan, Korea, Japan, parts of India) or just continue to entrench itself and build itself into a Diamond of a country.

    Either way, the continued trade with China means that few countries can (or will) fight China. The US and the EU both have multiple ways of destroying all of China (or any and all countries up to and including the entire world), but with a fight force of 1.5 Billion there is little in the way of Physical Force that any country could exert if China simply decided it wanted to regain it’s former territories, one country at a time.

    China has a LONG view on history which has a lot to do with Chinese culture and the fact that they believe that their dead ancestors guide them. They believe that even if they die, they will guide their children from the spirit world. (Maybe??) So theoretically China could determine to slowly regain it’s former territory, one square mile at a time.

    If you examine maps of the South China sea, you will sea that China already claims ALL of the water up to 1 mile of Vietnam and other country’s borders. A BOLD move and a STRONG statement that shows that China IS intent on and will reclaim it’s historical territory.

    Exp: Living in China 3 years