The End of Cheap China, Revised and Updated: Economic and Cultural Trends That Will Disrupt the World

PROLOGUE

The year was 1998. Steve Jobs was years away from introducing the iPod to the world, and audiences were packing cinemas across the globe to see Leonardo DiCaprio’s love affair with Kate Winslet in Titanic.

I turned off the lights in my grubby hotel room in Changchun, a dingy industrial city in northeast China famous for being the capital of Manchukuo, the Japanese-controlled puppet state during World War II. I had been sitting upright on a hard, wooden train seat for 18 hours all the way from Tianjin, and my back ached. The room’s air conditioner unit wheezed loudly, and a potent mixture of smells emanated from the bathroom, but I was so exhausted I started to drift off to sleep anyway.

Then the calls started.

The first time I answered, a giggly, cutesy voice on the other end playfully asked, “Do you want some fun?” I knew what “fun” meant. No, I told the voice, not my style, and I hung up. Undeterred, the girlish voice called back every five minutes. “Do you want some comfort?” she cooed. I hung up. The phone rang again. “Do you have any aches I can massage away?”

I fumbled around in the dark trying to disconnect the phone, without success. Finally I ripped the phone out of the socket. It was damaged, but I figured I’d just settle up with the hotel manager the next day—after all, everything in China at that time was cheap.

Then there was a knock on the door. I opened it, and standing in front of me was an absolutely stunning girl. She had a slender, lithesome body; ...