Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fifteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.
DESPITE TRADE TENSIONS FIREWORKS EXPORTS FROM CHINA ARE BOOMING
Liuyang, China: Birthplace and Epicenter of Fireworks Production
Many historians credit the Chinese in ancient Liuyang with creating the first natural firecracker around 200 B.C. Roasting bamboo caused it to explode due to its hollow air pockets. The noise it generated was said to ward off evil spirits. Some 800 to 1,000 years later, Chinese alchemists mixed saltpeter, charcoal, sulfur and other ingredients to discover an early form of gunpowder. When they stuffed that mixture into bamboo shoots and threw them into a fire, boom – the first “modern” fireworks were born.
Capitalizing on its pedigree of two centuries of fireworks production, Liuyang has focused its economy on becoming the undisputed fireworks capital of the world. Overall, China produces some 90 percent of the world’s fireworks. Around 60 percent of those are made in Liuyang.
Potential Powder Keg: Mr. Ding’s Dynasty
Whether you bought a multipack of screamers, bottle rockets, and roman candles from a roadside stand, or plan to watch a professionally-designed community display this Fourth of July, chances are the fireworks themselves were produced in China. In 2016, the United States imported $307.8 million worth of fireworks. Nearly all, $296.2 million worth, came from China. U.S. consumers purchase about half of the pyrotechnics China exports globally.
That may not be very surprising when you consider the abundant use of pyrotechnics at American events and celebrations. “Thunder Over Louisville” is an annual event that blasts through 60 tons of fireworks in 30 minutes.
What might be concerning, however, is the discovery by a Washington Post investigative team that around 70 percent of all Chinese fireworks entering the United States are produced, warehoused, transported, and ultimately imported under the control of companies owned by just one Chinese businessman, Ding Yan Zhong. The reporters estimate that Mr. Ding’s companies have imported 7,400 containers, 241 million pounds, of fireworks so far this year. Of the 108 containers that arrive on average every day, 72 are controlled by Mr. Ding.
Another Example of China on the Smile Curve?
There is a brighter side for the American fireworks industry. While there’s practically no firework manufacturing left in the United States, jobs in and around the fireworks industry follow a familiar pattern where the lower-skilled work is performed in China and other, higher value-added jobs can be found occupied by Americans. Here are some examples.
Pyrotechnic engineers are trained chemists who deploy their knowledge of how certain compounds react with other inputs to create bigger, brighter, and more exciting pyrotechnics. We love the classic chrysanthemum, peonies, and willow fireworks that send bright stars scattering into arcing trails. But we also await each Fourth of July the new patterns and colors these engineers have dreamed up.
The mean salary for a U.S.-based chemical engineer in 2015 was $103,960. Contrast this job with a firework maker in Liuyang, China, where most fireworks are still made by hand, by women for a mere $80-285 a month depending on skill level. It’s not just low paying; it’s dangerous work. According to a Slate article, Wang Haoshui, chief engineer with China’s State Administration of Workplace Safety, told a Chinese newspaper that only coal mining was considered a more dangerous occupation in China.
Today China produces 90% of the world’s fireworks.
In more desirable parts of the fireworks ecosystem, American show producers spend their days “choreographing” pyrotechnic displays for large scale events in sports arenas (Super Bowl halftime show and the Olympics) and concert venues (Kiss and Mötley Crüe). Winco Fireworks in Prairie Village, Kansas, imports and distributes fireworks but also innovates electrical firing systems. The company just launched the FireFly firing system that allows backyard enthusiasts to sync their music using Bluetooth® technology while detonating their fireworks wirelessly. Enthusiasts turned entrepreneurs are also common in the American fireworks industry. Scott Smith is one such example. He’s an electrical and computer systems engineer from Ganesvoort in upstate New York and founded COBRA, a company that creates software for designing fireworks shows.
Growth is Explosive in China
As with so many other consumer products, demand for fireworks is growing so rapidly in China that Liuyang manufacturers are turning their attention inward. China’s Spring Festival and lunar New Year celebrations offer healthy competition to demand for fireworks at American Fourth of July parties.
Chinese manufacturers also say it’s getting harder to export due to strict U.S. requirements. The U.S. American Tobacco and Firearms agency (ATF) requires “anyone in the business of importing, manufacturing, dealing in, or otherwise receiving display fireworks” to first obtain a Federal explosives license or permit from ATF for the specific activity. Firecrackers sold to the American public can only have 50 milligrams or less of pyrotechnic composition per firecracker.
China’s regulations are more permissive, not simply as they pertain to manufacturing, but also with respect to the power consumer fireworks can pack. Fireworks available for purchase can be several times more potent than fireworks that have been banned in the United States.
Trade Ensures the Continuation of an American Tradition
The first American fireworks display is said to have taken place in Jamestown in 1608. According to historians, John Adams wrote a letter to his wife on July 3, 1776 in which he predicted that the Fourth of July, the day on which the Continental Congress adopted the Declaration of Independence, would be “the most memorable in the history of America… celebrated by succeeding generations as the great anniversary festival.”
He went on to suggest the commemorations “be solemnized with pomp and parade…and illuminations [fireworks]…from one end of this continent to the other, from this time forward forevermore.” Wherever and with whomever you enjoy those colorful bursts in the night sky, celebrate this symbol of American independence and also the economic dynamism we currently enjoy thanks to our role in the global economy.
THE ANTI-FREE TRADE EFFECT OF ELECTIONS