More than 30 million people died of starvation while ‘China watchers’ debated whether hunger was, in fact, wide-spread at all.

The business of gold was in trouble. Northern Italy was home to over 10,000 jewelry manufacturers, most of them small-scale artisan outfits that, taken together, make up the largest gold jewelry industry in the world. But competition from China and Turkey was threatening to wipe them out. You could see the changes already in Italy’s demand for refined gold; in the last four years it had slumped from over 600 tons annually to around 350 tons. Camponovo saw little prospect for an improvement. Every year, he said, Chinese entrepreneurs and designers decended on the big jewelry fairs in northern Italian towns such as Vicenza to buy speciems to take home and reproduce at less than one-tenth of the Italian price.

the bonhomie was not sustainable. The illegal immigrants-turned-entrepreneurs began to put their former Italian bosses out of business. Of the 6,000 or so textile companies that existed in 2000, less than 3,000 remained in mid 2005. Several Italian companies with more than a hundred years of history are hanging on by a thread. The main reason for this is that whereas in the past only one part of the process of making a garment was outsourced to China, now almost every step in the production process is being moved offshore. As spinning, weaving, cutting and sewing moves to Wenzhou, the Chinese factory bosses in Prato are better suited to transition than their Italian counterparts.

Almost all of the value had been stripped out of the industry and he began telling people – only half in jest – that he would begin selling motorbikes by the kilogram, like pigs. “the ex-factory price of our cheapest model is rmb 25 per kilo. That is a bit more than a kilo of live pig.’ Said one of his deputies, Yang Zhou, during another of my visits to the plant.

But thirty-three months after starting at zero with a new company in the city of Wuhu on the banks of the Yangtze River, Chery had made its first car, a four-door saloon called the Chery that bore more than a passing resemblance to the Jetta, which at that time was China’s best-selling car. Suspicions were immediately raised, partly because Chery’s main investor, SAIC, was a joint venture partner of Volkswagen and partly because one of Chery’s top executives used to make the Jetta in China for Volkswagen’s subsidiary Audi. Volkswagen launched an investigation and found their own original parts inside the Chery.

‘China is a big family. We have 200 million middle school students. Every day 22,000 girls get married; 44,000 babies are born. We eat better since we opened China’s door. Every day we eat 1.6 million pigs and 24 million chickens. Our premier not only wants young people to have a chance to study and grown-ups to have jobs, he also has to take care of 20 million kids in kindergarten and 12 million people aged 80.

Essentially there are many drivers pushing the flattening of the world. One of those things is the decomposing of the corporate value chain down into more and more chunks that can be connected and out sourced.

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Here is a great post showing how CinemaNow (and this was before the Fox release) is turning the tide...

I used to joke “its easier to ship a CD on truck across the country and put it on a store shelf on time than it is to get a Digital CD on the virtual shelf of DSP.”...