Dragon's Year: A Dangerous year - Economist

[rcrmj]

peaceful protest is a good thing, there loads protests happening in China every year from streets to virtual world in various sizes, often they will get the result. it is a vital element for government to build a more balanced society, the basic income increased enormously, labour laws are better practiced than before and still improving, housing prices are in control, more and more...atm pollution and corruption are the biggest headache for us

 

[OrionHunter]

maybe dangerous for india perhaps.

Ah! I was just thinking what the heck is going on? No 'India' figuring in this thread so far?

And here it was at last! Pax Sinica was kind enough to break the ice! Now where are the other India baiters, biters and bashers? Some Chinese trolls can't digest their meals without India figuring somewhere. Probably an inferiority complex, what?

But alas! I can now go get some pleasant sleep.

Cheers!

 

[S10]

Ah yes, this happens all the time. When my pilot union struck in the 90's, the company hired mercenaries who fired upon us. We took dozens dead and wounded before we gave up.

What is going to happen in China is wage and work parity. The average worker at Foxconn makes a tiny fraction of the wages the same worker would make in the USA for the same work. Further, they are getting tired of working 12 hours a day, 6 days a week. Modern information exchange allows them to understand and compare, and human nature being what it is, eventually they will get what they want.

There will be pressure on companies to raise wages for Chinese workers. As the price of labor goes up, the attractiveness of moving manufacturing to China will diminish. Eventually, there will be a form of equilibrium.

Remember when Japan in the 1980's appeared poised to "own" the world? Everyone was copying the Japanese model... entire books were written on the subject. Eventually the hideously overworked Japanese workers simply said "enough" and the model fell apart; Japan fell into an economic funk from which it has yet to fully recover.

You stated that Chinese labour is "cheap", then the question is compared to what? Certainly when comparing itself to Europe or North America, salary in China is quite low. However, compared to most countries in Asia, Chinese labour costs are certainly nowhere near the bottom. Places like Vietnam, Philippines, Cambodia, Laos and Indonesia all have far cheaper labour. Why don't we see those emerging as manufacturing giants?

The answer is simple. Cost of labour is only part of the equation in the final product cost. Other factors such as working education, culture of work ethics, transportation/communication infrastructure and political stability are also at work. It is utterly ignorant to dismiss China's economic growth and attractiveness for investment as mere cheap labour. In terms of other factors mentioned, China is far ahead of any potential emerging competitors. If it costs you 1 dollar in labour to make a product worth 10 dollars in retail value, and $6 to transport it, then it's not competitive.

Sorry to burst your bubble, but China is here to stay.

 

[Icewolf]

december 21, 2012.

 

[KRAIT]

You have to give it to Chinese worker's technical know-how and the pool of such workers. They have become the backbone of chinese economy.