Quote:
Originally Posted by Katsunami
It looks like manufacturing is moving to Indonesia for some types of products. China is getting too expensive it seems.
|
China bootstrapped itself from Third World agrarian nation to first world industrial power by exploiting low labor costs. They did it the same way Russia did after the Bolshevik Revolution - move the peasants off the farms to the cities to become an industrial workforce. But unlike Russia, China didn't have to force the move. A job in one of the urban factories had better hours, better working conditions, and
paid better than being a peasant on the farm, and workers flocked to the cities in droves, with side effects of urban sprawl, pollution, and highly inadequate transport infrastructure. Those Chinese workers got paid a tiny fraction of what Western workers would get for the same work, but it costs a lot less to
live in China. Those factory jobs were a step
up.
Now China is running out of peasants on the farm (in part due to a draconian one child per family policy to
reduce the population,) and manufacturers must compete for labor, with rising labor costs. (One large Chinese manufacturing outfit announced a full court press into robotics in consequence.) China is no longer the low cost producer. I believe Mexico currently holds the overall title.
That's having interesting side effects here. One of the hot buttons in the US has been illegal immigration from Mexico as Mexicans come to the US to earn money which they send back home. There are some indications that trend is reversing, as the Mexican economy is becoming more robust, Mexicans feel less need to come to the US to earn money, and some who did emigrate illegally are returning home.
China, meanwhile, faces the challenge of growing its economy by serving the demands of its growing middle class rather than through export, and the Chinese Communist Party is trying to figure out how to stay in control when the nature of the economy and society they have been moving toward is contrary to the sort of centralized control they favor.
______
Dennis