THE end of cheap China is at hand. Blue-collar labour costs in Guangdong and other coastal hubs have been rising at double-digit rates for a decade. Workers in the hinterland, too, are demanding—and receiving—huge pay increases. China is no longer a place where manufacturers can go to find ultra-cheap hands (see article). Other countries, such as Vietnam, are much cheaper. What will this mean for China and the world?
Contrary to conventional wisdom, it will not mean that companies close their Chinese factories and stampede to somewhere poorer. China is still a terrific place to make things. Labour may be cheaper elsewhere, but it is only one cost among several. Unlike its lower-paying rivals, China has reasonable infrastructure, sophisticated supply chains and the advantage of scale. When demand surges for a particular product, the biggest firms in China can add thousands of extra workers to a production line in a matter of hours.
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2 comments:
As China becomes more of a capitalist country it becomes wealthy, as the US becomes more of a communist country we become poor with the exception of the ruling government elite. The Chinese revere education and hard work, unlike the United States which worships food stamps and Nike tennis shoes.
How do you know what the Chinese revere? Maybe they revere rice. Fireworks. Spaghetti. Or digging tunnels. lol.
This country is reaping what it has sowed.
Nobody likes it. When we all turned a blind eye to everything we have done in the past, we never thought it would come back to bite us.
Those days are here. We have become a wicked child and in need of correction.
We shall be judged in the same manner we have judged others.
Call it what you will. Every knee shall bow, including our own. No matter how evil and haughtily we have become.
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