I like bicycles. I like reading about them, I like looking at them, but most of all I like riding them. You can have fun, get some exercise and see nature. And, you can learn a lot about yourself by pedaling a bike.
I also like to follow professional bicycle racing. As this is written, the top pro teams are gearing up for the biggest race on the calendar—the Tour de France. Widely acknowledged as the world’s toughest endurance event, le Tour covers 2000+ miles, making a grueling circuit around France that takes in both the Pyrenees mountains in the south and the Alps on the countries eastern border. Even after roughly 80 hours of racing, podium placings are often decided by not more than a couple of minutes—sometimes, just a few seconds.
While le Tour is without question the biggest race, there are many, many more on the pro calendar, from February through October. And, there’s big money involved in pro racing. Bike racing in Europe is as big as or even bigger than NASCAR is in this country. Like NASCAR sponsors, companies spend millions of dollars (or euros) to be the primary sponsors of racing teams. They figure the publicity they get when their riders do big things on the bike is worth the cost.
Given the performance parity at the sport’s highest level and the vast amounts of money involved, it should come as no surprise that there are some individuals and teams willing to bend or break the rules to get an edge. In bike racing, cheating most commonly takes the form of doping—using illegal performance-enhancing drugs.
Probably the most commonly abused performance-enhancing substance in bike racing is erythropoietin (EPO). Originally developed to help sufferers of anemia and other blood diseases, EPO stimulates production of red blood cells, thus increasing oxygen-carrying capacity. Unfortunately, it also can cause blood to have a viscosity similar to that of 40-weight motor oil, causing all kinds of health issues up to and including death.
What’s the point of all this? Well, it’s high time Products Finishing readers were more up to speed on what’s happening in the sport of professional cycling. No, wait—it’s that there always have been and always will be people who are willing to risk life and limb to resort to cheating if they think it can help them gain a competitive advantage.
The same applies to companies, industries and even entire countries. Case in point: China and its currency. Groups representing U.S. manufacturers will tell you that the undervalued yuan (it’s pegged at about eight to the U.S. dollar) gives Chinese companies an additional competitive advantage on top of those previously discussed in this space and many other places.
The China Currency Coalition (www.chinacurrencycoalition.org), for example, is an organization of U.S. industrial, service, agricultural and labor organizations dedicated to elimination of the yuan’s undervaluation. The group says the Chinese currency is undervalued by 40% or more, adding to the already burgeoning trade deficit with China and speeding erosion of the United States’s manufacturing base.
What, if anything, can and should be done about the currency disparity—and what impact a re-valuation would have—has been and continues to be debated in the halls of Congress and elsewhere. Some want to impose unilateral tariffs on Chinese imports to the United States. One problem with this approach is possible inflation, assuming increased prices of Chinese goods are passed on to U.S. consumers.
More serious are potential repercussions from the World Trade Organization (WTO), which basically prohibits unilateral imposition of tariffs and any other actions it sees as detrimental to free trade.
Another approach is advocated by the National Association of Manufacturers (NAM). The organization wants the International Monetary Fund (IMF) to enforce rules designed to prevent countries from manipulating exchange rates to gain artificial trade advantages.
There’s a fairly broad consensus among economists that the yuan is undervalued and that Chinese monetary policy is responsible for the undervaluation. There’s less consensus on how this really affects trade. So is it really cheating? Certainly it’s one more piece of a complicated puzzle that needs to be addressed to gain a more level manufacturing playing field. NAM and other concerned groups and the U.S. government need to keep the pressure on IMF to enforce its currency rules and bring the yuan valuation more into line with reality.