I started this blogspot in 2006. 

The “E-Waste” That Built China’s Good-Enough Computer Market

I started this Blogspot in 2006.

At the time, blogs could still attract professors, journalists, regulators, recyclers and overseas buyers into the same argument. Some consequential things happened here. The blog helped expose the “80 percent of e-waste is exported” statistic as a press-amplified hoax. It documented the African technicians and importers whom Interpol’s Project Eden treated as environmental criminals. Eventually, those arrests stopped.

Today, attention spans are shorter. Most of my new blog posts are little longer than a weekly LinkedIn or Facebook post. Worse, because embedding a funny or provocative YouTube music video was considered clever 15 or 20 years ago, Google now appears to penalize or de-link many of those older posts. I may have to revisit hundreds of them and remove the dead or distracting video inserts.

Honey badger don’t care.

The evidence in those posts still matters.

Two stories about China that no one connected

In September 2007, Harvard Business Review published an article by Bain & Company chairman Orit Gadiesh and Bain partners Philip Leung and Till Vestring titled “The Battle for China’s Good-Enough Market.”

The authors described a rapidly expanding Chinese middle market for products that were reliable enough and affordable enough for consumers who could not—or would not—pay the premium demanded by Western brands. Chinese manufacturers were learning to serve that market at enormous scale and could eventually use the same skills to compete in India, Brazil and even developed economies.

The Bain article understood something that most Western environmental journalists did not: “good enough” was not a euphemism for garbage. It was a sophisticated manufacturing strategy.

But Bain told only half the story.

Two years earlier, at RECCON-05, Helen Su had presented slides showing one of the supply chains feeding that Good-Enough Market: semi-knockdown, or SKD, factories purchasing used CRT monitors as reusable manufacturing cores.

These were not primitive dumps where Americans abandoned unwanted computers. They were factories testing imported monitors, recovering functional cathode-ray tubes and combining them with new or replacement electronics, wiring and plastic cabinets to manufacture affordable displays.

The Bain consultants saw the Good-Enough Market from the boardroom.

Helen Su showed us what it looked like on the factory floor.

Almost no one connected the two.

The manufacturers the West failed to recognize

The names associated with this manufacturing world were hardly marginal. They included Terry Gou of Foxconn, Simon Lin of the Acer/Wistron manufacturing lineage, and Rowell Yang of Proview.

Their companies belonged to the Asian contract-manufacturing system that produced much of the world’s electronics. From approximately 2000 through 2010, factories in this network were among the most important participants in the international secondhand CRT market.

Yet almost no one in the United States or Europe appeared to understand who these buyers were, what they manufactured, or why they purchased used monitors.

Western consumers recognized IBM, Dell, HP and Apple. They were far less likely to recognize the contract manufacturers that actually built products behind famous brand names. When those unfamiliar Asian companies purchased used CRT monitors by the container load, campaigners found it easier to call the transactions “waste exports” than to study the manufacturing economics.

I sat next to EPA’s Clare Lindsay during Helen Su’s RECCON-05 presentation. Clare was very bright, and she seemed to understand immediately how important the evidence was.

But Helen Su’s evidence was drowned out by the simpler narrative promoted by Jim Puckett and repeated throughout the Western press: used CRT monitors exported to Asia were “e-waste,” and the people purchasing them were presumptively engaged in illegal dumping.

The actual market was far more interesting.

They were buying cores, not importing garbage

A CRT monitor contained much more than scrap glass and copper. The cathode-ray tube was its most costly and technically demanding component. If the tube still worked—or could be economically repaired—it could be removed, tested and installed in another cabinet with new controls, wiring, housing and electronics.

That is the logic of a “core.”

American rebuilders have long purchased used automobile engines, alternators, transmissions and toner cartridges for precisely the same reason. The used product contains an expensive central component around which another useful product can be manufactured.

The Asian SKD factories applied that familiar remanufacturing logic to computer displays.

They understood tariffs, component values, repair yields, labor costs and the purchasing power of emerging markets. They could combine reusable CRT tubes with new parts and sell reliable monitors at prices that students, families, schools and small businesses could afford.

These CRTs were traded as reusable manufacturing cores within the WTO-governed system of international commerce. They were not legally transformed into hazardous waste merely because they crossed an ocean—or because an environmental organization called them waste in a press release.

The factories were cunning in the best sense of the word.

The missing case study in Bain’s article

Bain described China’s Good-Enough Market as the battleground between premium multinational brands and local companies offering reasonable quality at much lower prices. The authors warned that companies mastering this middle market could become formidable global competitors.

The CRT monitor was an almost perfect case study.

A Chinese family, school or small business did not necessarily need the thinnest new flat-panel display available at an American shopping mall. It needed a dependable screen at a price it could pay. A repurposed CRT could provide access to a computer, the internet, educational resources and business software years before a new flat-panel display became affordable.

Reuse was not incidental to the Good-Enough Market. It was one of the ways that market achieved affordability.

The SKD manufacturers extended the productive life of one of the most energy- and material-intensive components ever installed in a desktop computer. They preserved the embodied mining, refining, glassmaking, engineering and manufacturing already invested in the CRT.

That was reuse—not dumping.

The irony is striking. In the same decade that elite Western business consultants were warning multinational corporations to study China’s ingenious Good-Enough Market, elite Western environmental organizations were portraying one of its supply chains as a criminal waste trade.

One group admired China’s ability to manufacture affordable products from every available competitive advantage.

The other looked at the reusable components entering those factories and saw only garbage.

Why the Western press missed the story

First, the factories were far away. Most reporters never interviewed the buyers, factory managers or engineers. They photographed scrap yards and informal workshops instead.

Second, contract manufacturers were nearly invisible to Western consumers. Their names did not appear prominently on the equipment, even though they possessed immense technical expertise and manufacturing capacity.

Third, “toxic waste dumped on poor people” was an irresistible story. “Highly capable Asian manufacturers arbitrage reusable components to supply lower-income consumers” required more explanation and produced less shocking photography.

Fourth, environmental campaigns confused appearance with function. A used monitor might look obsolete beside a new flat screen in California. Inside an SKD factory, however, its tested CRT was an industrial input with a measurable yield and a negotiated price.

Finally, the waste narrative treated lower income as proof of victimhood rather than as a market condition to which engineers and entrepreneurs responded. If an African or Asian buyer purchased used equipment, the Western campaigner saw someone being exploited. The possibility that the buyer understood the equipment, calculated the repair yield, negotiated the price and intended to make money was barely entertained.

That was not environmental justice. It was the removal of agency from people of color who understood the equipment better than the journalists describing them.

The accusation survived; the market disappeared

Most Americans and Europeans who vaguely remember the CRT-export controversy still remember the shipments as illegal exports of hazardous waste.

They do not remember Helen Su.

They do not remember the SKD factories.

They do not remember the reusable cores.

They do not remember that Terry Gou, Simon Lin and Rowell Yang belonged to the contract-manufacturing world transforming Asia into the center of global electronics production.

And they probably do not connect those factories with the Good-Enough Market that Bain and Harvard Business Review identified as one of the most important competitive developments of the decade.

They remember photographs of broken electronics and a slogan.

That is why these old blog posts remain important, even if Google no longer likes their obsolete YouTube links. They preserve a contemporary record of a market that was real, sophisticated and consequential—and that Western institutions largely failed to understand.

The tragedy is not merely that working CRTs were called waste. The deeper tragedy is that the technicians, buyers and manufacturers who extended their lives were written out of the history.

The Western press saw used monitors moving east and south.

Bain saw the rise of the Good-Enough Market.

Helen Su showed us the bridge between them: factories, engineers and reusable cores.

Twenty years later, most of the West still has not put those three parts of the story together.