Modern Trading Cycle of Scrap

a.              India and China are similar when it comes to their demand for resources and their role in recycling scrap material. When comparing the two however, China deals with scrap material on a larger scale than India. This situation is the result of a compilation of factors. When looking at labor costs, the article, Chapter 5: Backhaul of Adam Minter’s work, Junkyard Plant, states that Indian workers in the scrap business make around $80 a month while Chinese workers in the same business make around $250. At first glance, this may seem confusing as to why many prefer to go through China instead of India, but there are other factors that are more important. When it comes down to it, it all boils down to shipping cost as well as cost of refinement. In the case of China and India, China ships all over the world, making the shipping to China very cheap in order to avoid backhaul. Since this is the case along with having many refineries that can operate at a very cheap cost, many countries, such as the United States, choose to send a lot of their scrap resources to China. In return, China refines these materials, manufactures items with them, and sends them back to the United States or other countries, and the process is done all over again. India on the other hand, does not export as much and therefore many of their clients are in the Middle East where some of their major exports are and where there is a fairly large amount of scrap material available. Like I mentioned before, this amount is not nearly as much as the amount processed in China, which can be deduced to being due to the shipping costs.

b.              Although this new global market is helping the efficiency at which scrap materials are being re-processed, there are also some problems that are arising. The main problem that I see is the decreasing need for people to work in the ship/scrap yards. The article states, “What they don’t have, however, is a lot of people out here. Sure, there’s enough staff to receive, process, and dispatch all of this scrap. But compared to a crowded Indian or Chinese scrapyard, it’s a skeleton crew.” (101). This passage is very important to acknowledge because even though the exportation of scrap materials makes more sense than processing them in the United States because of cost and fuel, the jobs in the United States are decreasing. This is a problem because while we seem to be trading materials in the most efficient manner possible, the advances in technology and efficient processes are taking away jobs within the United States that were once available. In the long run, this could have a negative affect on the economy if not monitored closely.

c.               Modern transportation relates to the themes raised by Jared Diamond in “Why Did Human History Unfold Differently On Different Continents For The Last 13,000 Years” because modern transportation favors certain countries much like geography did before. Countries with easily accessible ports and those will many raw/scrap materials are able to trade with one another and excel in this new economy, much like how China is now. However, the focus has changed from geography providing domesticable livestock and plants to being able to ship efficiently to many wealthy nations around the world.