Today, I was on my way to the supermarket to get some fruit and vegetable for my refrigerator. Passing a generic-looking shop, I saw a rack of rather comfortable looking shoes. Picking one up, I could hardly believe my eyes when I saw a price tag of S$13.90. Other models on the same shelf had similar prices, ranging up to S$29. Interestingly, the shop stocked shoes with varying widths, something you rarely find in expensive shops.

I took a closer look at a few pairs, comparing their softness, their width and cut, more or less narrowing it down to two that I liked. A male voice came up behind me to point out the chief differences between the two: On my left hand, I was holding one with more commodious uppers that were stitched to the sole; on my right, the uppers were a little more fitting and glued to the sole.

I picked comfort and stitching, and turned to the sales clerk to ask for the other twin of the shoe so I could try it on. Bonus, bonus, he was a good-looking young man too.

To cut a long story short, I bought it. And it turned out to be the $13.90 pair that I had first spotted.

I know it won't be great quality, and will not even last half as long as a pair of Clarks. But at this price, I can buy 20 - 25 pairs of this for one pair of that brand name.

It was made in China.

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This just makes real in a personal way, one of the greatest economic phenomena of the last two decades -– the way China has been a great price deflator over a huge range of goods. Riding on its cheap domestic inputs, e.g. labour cost, and vast economies of scale, China has become a massive workshop to the world, flooding export markets with goods at ever lower prices.

In the process, higher-cost economies, not just in the West, but including Japan and Singapore, have seen their manufacturing industries badly undercut. Many factories have had to relocate themselves to cheaper countries; others have simply gone out of business.

What is the solution? One way would be to devalue our currency to match China's; that way our domestic inputs -– land, labour, etc -– would compete with China's. But that also means that as a whole the country goes down to the same poverty level as China -– not a politically viable solution.

The other way would be to continuously upgrade and retool. Workers here simply have to produce more efficiently, so that labour cost per unit produced is kept as low as possible. We should be shifting to higher-value products, i.e. things where labour cost counts for little. At the same time, we should be trying to stay ahead of the Chinese (and latterly, the Indians and Vietnamese) by specialising in knowledge and research-intensive products.

Knowledge industries, however, require vastly different social and cultural conditions from mass-production industries. The latter needs social discipline and obedience, technical skills and a premium on big organisations. The former needs a climate conducive to disruptive thinking and behaviour and a premium on damn-it-all go-it-alone attitudes -- in other words, individualism.

Without having to go into detail, one inescapable fact from the above is that of constant change, in the workplace, in one's career, in social norms.

To an extent, you see the Singapore government realising this. Thus the constant exhortation to re-learn and adapt. But resistance is great. Like people everywhere, Singaporeans find change bewildering and threatening. Many believe it shouldn't even be necessary, if not for the ruling class' desire to get ever richer.

Part of the problem is due to perception. Politicians, civil service administrators and business leaders read and travel, and they grasp the enormity of the challenge posed by China. The working class, more insular in their reading habits (if they read at all) and less well-travelled, have a less acute perception of global trends.

I've often said, mostly in jest, but partly too in seriousness, that the best thing our government can do to persuade people they need to change their attitudes, is to send every Singaporean on a trip to China, Vietnam and India, with extensive tours of their factories and industrial estates, and a look at the how hard people are willing to work to lift themselves up.

When you've ridden on a bus along a highway for two hours solid (150 km?), and through those two hours, you see nothing but uninterrupted rows of factories stretching to the horizon, I think you will have your consciousness well and truly raised.

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The last time I made this suggestion, albeit in jest as usual, I found someone who more than concurred. Jalil (not his real name, because he's a civil servant) added: "And the first group they should send to see the Chinese factories should be the Malays." If I recall correctly, his point was that of the major ethnic groups in Singapore, the Malays, of which he was one, had the poorest understanding of modern China, partly because so few of them travel there on holiday.

I think it has to do with food.

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I met Lucas (not his real name) last week in Kuala Lumpur. He was about to leave for Tokyo, as a tour guide for a group of 40 going on a factory tour organised by their company. It was a short three-day trip, but it was immensely difficult to organise, he said.

Apparently, all 40 employees were Muslim. It was virtually impossible to find suitable restaurants for them. These had to be either vegetarian (extremely rare, he said) or all-fish places. "But how many all-fish restaurants are there in the first place? And how many of these can seat 40 people at one time?"

It wasn't clear to me whether he succeeded in finding the necessary places within his budget, or if he would have to take them to normal restaurants, but order only non-pork dishes.

If the latter, he would expect protests. Lucas has had experience with some very strict Muslims who won't eat fish off a plate or bowl because the utensil is considered contaminated.

Then what happens? I asked him. "They just don't eat and complain through the whole trip that they are starving, what else?

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Culture is a major factor in economic performance. To the extent that religion informs culture, it plays a part too. Not seeing China first-hand means that the people's estimation of the emerging giant's economic threat lags behind the government's perception. This may be particularly so for the ethnic communities that find touring China hard. This mismatch between government and people means that the government's calls to adapt and change are met with skepticism and resistance.

© Yawning Bread