The world’s largest retailer had a ready explanation when its after-Thanksgiving sales fell flat: Its “already low everyday prices” weren’t low enough.

And it certainly must have received a sales boost when the media began reporting Wal-Mart’s solution: even deeper markdowns.

But there may be an alternate explanation for why some Americans are shunning Wal-Mart, and it may have nothing to do with prices.

If you Google the words Wal-Mart and “unfair competition,” that Web search engine returns 8,260 entries, many of them references to articles in major magazines and newspapers. Google Wal-Mart and “overseas” and you draw more than 800,000. Again, many refer to unflattering media reports. Try Wal-Mart and “China,” and you receive almost 900,000 hits.

Just before Thanksgiving, the investigative PBS program “Frontline” spent an hour exploring what it called the “joint partnership” between Wal-Mart and the Peoples Republic of China. The provocative title of the program: “Is Wal-Mart Good for America?”

(Read transcript: www.frontline.org)

Going to China

Reporters Hedrick Smith and Rick Young documented that a large number of manufacturing companies, under relentless cost-cutting pressure from Wal-Mart, have moved their manufacturing operations to China and other Pacific Rim countries.

Rubbermaid, which employed 1,000 in Wooster, Ohio, five years ago, is now out of business. The longtime American company, with no factories in China, could not react quickly enough when plastic resin prices spiked and it quickly found itself off the shelves at Wal-Mart.

On the day the “Frontline” cameras visited, the company was auctioning off its equipment. The firm’s largest piece of injection-molding machinery, a house-sized piece of steel, was sold to Chinese bidders for $850,000 and shipped overseas.

In another case, the last remaining U.S. maker of television sets filed an unfair trade practices claim against a Chinese firm. The small company in Tennessee found itself arguing in hearings against the Chinese and Wal-Mart, which joined in the defense of its Chinese supplier. (The U.S. company eventually prevailed.)

The PBS reporters visited a province in China where many U.S. firms have relocated. Workers in the top-paying firms there earn $100 per month, or about 50 cents per hour. Many others earn less.

Duke University economics professor Gary Gereffi told “Frontline” that Wal-Mart has 6,000 global suppliers, 80 percent of which are located in or have operations in China.

Of course, all of the big-box retailers import from China. But Wal-Mart sells more in three months than Home Depot, the second-largest retailer, sells in a year. Wal-Mart, according to the business magazine Fast Company, does more business than Target, Sears, Kmart, J.C. Penney, Safeway and Kroger combined.

(www.fastcompany.com/magazine/77/walmart.html)

What two-way street?

Wal-Mart is clearly the leviathan of U.S. retailing. China, meanwhile, is by far the largest exporter to the United States in nearly all retail consumer categories.

For years, we were told and naively believed that foreign trade would become a two-way street: Low-wage countries would sell us raw materials and simple products, while we sold them products that took knowledge and skill to produce.

That isn’t happening, as our massive trade deficit, now $120 billion with China alone, shows.

The PBS reporters visited the port of Long Beach, Calif., where acres and acres of rail-car-sized shipping containers sat, stacked five high, waiting for delivery. They contained everything from machinery to toys, from clothing to footwear – $36 billion worth of goods this year alone. Even the giant cranes unloading the ships are imported from China.

And what do we ship back? Smith asked the Long Beach port manager: $3 billion worth of raw materials, mainly cotton, animal hides and scrap metal, he replied. Oh, and we export wastepaper, which is reprocessed in China and returns as cardboard boxes full of new goods.

Goods worth $36 billion coming in; $3 billion going out. Is that the way this is supposed to work?

Brink Lindsey, an economist at the libertarian Cato Institute, estimates that we have lost a million jobs to China.

Says professor Gereffi: “Wal-Mart and China are a joint venture, and both are determined to dominate the U.S. economy as much as they can.”

And that should concern us all.

Rex Rhoades is executive editor of the Sun Journal. Readers should know that his opinions – like those of all columnists on these pages – are not intended to reflect those of the newspaper’s owners, employees or carriers. E-mail him at: [email protected].