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If anything, the decline in needing cheap labor is going to be a problem for large countries like China. China needed those cheap labor factories to be the engi

by eej71 4y ago

If anything, the decline in needing cheap labor is going to be a problem for large countries like China. China needed those cheap labor factories to be the engine to help lift people out of rural poverty. Unfortunately that engine will now falter and many will be left behind. For an eye opening survey here, I highly recommend the book Invisible China.

alephnerd 4y ago
+1 on Invisible China. Scott Rozelle's group at the FSI has been doing some good work on trying to alleviate the opportunity gap that exists in several prefectures in the PRC.
- bigcat12345678 4y ago
  Xi Jinping know this problem all along. And his poverty eradication project is essentially siphoning embezzled fund from corrupted officials into rural areas. I bet Xi Jinping knows research work in the similar lines of Invisible China. https://www.worldbank.org/en/news/press-release/2022/04/01/lifting-800-million-people-out-of-poverty-new-report-looks-at-lessons-from-china-s-experience#:~:text=%E2%80%9CChina%20achieved%20its%20goal%20of,contributions%20to%20global%20poverty%20reduction https://www.worldbank.org/en/news/press-release/2022/04/01/l....
  - alephnerd 4y ago
    Rozelle's group at Stanford has consulted at the prefecture level with the CCP [0]. The PRC is de facto federal with a significant amount of leeway at the prefecture (state) level. In fact, a number of PRC policy initiatives are often done in coordination with research groups at Stanford University. The Guiding Cases [1] is another ministerial level initiative that Stanford has consulted on. [0] - https://sccei.fsi.stanford.edu/reap/content/reap-home https://sccei.fsi.stanford.edu/reap/content/reap-home [1] - https://law.stanford.edu/china-guiding-cases-project/ https://law.stanford.edu/china-guiding-cases-project/
    - bigcat12345678 4y ago
      Nice, first time learn this, thanks!
pishpash 4y ago
If they are poorer than people in Vietnam they can just go to Vietnam to work. That's not that much different than going to southern China to work. It is almost a common market.
- prox 4y ago
  Wouldn’t Vietnamese people be massively favored? How much chance would a common Chinese person have. Language is also different enough, and culture probably as well.
- toomanyrichies 4y ago
  Given their poverty, are you certain they have enough disposable income (let alone the personal freedom) to just pick up and move to an entirely new country?
- wwweston 4y ago
  Labor rarely has the mobility that capital does, especially when international borders are involved.
- alephnerd 4y ago
  A number of rural migrant workers in China DO go to Vietnam to work[0], though this has been increasingly cracked down on by the Vietnamese government[1]. On a similar note, the Belt and Roads Initiative itself essentially acted as a jobs placement program to alleviate labor issues after the 2015-16 Stock Market crash in China [TODO: Find page numbers from notes] [0] - https://data.vietnam.opendevelopmentmekong.net/dataset/fefed011-e10b-40bf-98bb-c46b3249e7f9/resource/59e0db97-4d84-4e55-89a5-5d63dc5af587/download/recent-migration-of-chinese-to-vietnam.pdf https://data.vietnam.opendevelopmentmekong.net/dataset/fefed... [1] - https://www.rfa.org/english/news/china/workers-10292020111656.html https://www.rfa.org/english/news/china/workers-1029202011165...
- grapeskin 4y ago
  Imagine telling poor Americans to just move to Guatemala to do poor people work since it’s not that different and you’ll realize how insane that sounds.
granshaw 4y ago
They are well on their way of climbing onto the next rung of the manufacturing ladder and manufacturing more complex items with higher margins that can absorb higher wages …and transitioning more to a service economy …no?
- alephnerd 4y ago
  Nope. By most standards the PRC is stuck in the middle income trap. To paraphrase an earlier comment I wrote sometime back: Chinese household median income is around $4,700-4,800 in 2021, with massive disparities between First world comparable regions such as Beijing, Shanghai, and Tianjin, and rust belt regions like Wuhan [0]. Even the Chinese Premier Li Keqiang has noted that 600 million Chinese earn less that $140/month [1]. [0] http://www.stats.gov.cn/english/PressRelease/202201/t2022011 http://www.stats.gov.cn/english/PressRelease/202201/t2022011... [1] https://www.globaltimes.cn/content/1189968.shtml https://www.globaltimes.cn/content/1189968.shtml
  - senttoschool 4y ago
    >middle income trap China is not a good example for the middle income trap. Middle income trap countries relied on cheap labors but could not move up in the value chain. China has moved up the value chain. They're the top or close to the top for many things including mobile phones, chip manufacturing (7nm), AI, software, 5G, electric car batteries, nuclear power, fusion research, quantum computers, etc. They also publish more scientific papers than any other country, by a significant amount. Conversely, true middle-income country like Brazil and Thailand have not moved up in the value chain one bit. China, Singapore, Hong Kong, South Korea, and Japan are all East Asian countries. They all have very similar values when it comes to education, hard work, and entrepreneurism. It's only a matter of time until China joins the first world. Their major cities are already first-world. Yes, there are countries that have cheaper labor than China right now but China should be able to replace that with higher value services such as exporting 5G tech or nuclear power plants.
    - alephnerd 4y ago
      Yet, median income [0] and HDI [1] both at the macro level and at the prefecture level are comparable to Brazil [2][3] and lag behind both Russia [4][5] and Mexico [6][7]. There is no denying the amount of growth the service sector in China has seen, yet a lot of this growth and development is among a sliver of the population living in better developed regions such as the various coastal prefectures. Beijing, Tianjin, Guangzhou, Shanghai, etc can be treated as developed, but what about the hinterlands such as Sichuan, Ningxia, Hunan, Guangxi, etc? This middle income trap is not a good thing by the way - I take no joy pointing this harsh truth out because this means hundreds of millions of PRC nationals are stuck in less than ideal economic positions. Also, if we are talking about the value chain, Brazil is very high in the ONG (Petrobras, Odenbrecht), Aeronautics (Embraer), Automotive, and Defense (Odenbrecht, Embraer) value chain thanks to economic policies in the 90s and 2000s that are comparable to those the PRC has started adopting in the past 10-15 years. [0] http://www.stats.gov.cn/english/PressRelease/202201/t20220118_1826649.html http://www.stats.gov.cn/english/PressRelease/202201/t2022011... [1] https://en.wikipedia.org/wiki/List_of_administrative_divisions_of_Greater_China_by_Human_Development_Index https://en.wikipedia.org/wiki/List_of_administrative_divisio... [2] https://en.wikipedia.org/wiki/List_of_Brazilian_federative_units_by_Human_Development_Index https://en.wikipedia.org/wiki/List_of_Brazilian_federative_u... [3] https://agenciabrasil.ebc.com.br/en/economia/noticia/2017-02/brazils-national-average-household-income-capita-40016-2016 https://agenciabrasil.ebc.com.br/en/economia/noticia/2017-02... [4] https://en.wikipedia.org/wiki/List_of_federal_subjects_of_Russia_by_Human_Development_Index https://en.wikipedia.org/wiki/List_of_federal_subjects_of_Ru... [5] https://tass.com/economy/1301957 https://tass.com/economy/1301957 [6] https://en.wikipedia.org/wiki/List_of_Mexican_states_by_Human_Development_Index https://en.wikipedia.org/wiki/List_of_Mexican_states_by_Huma... [7] https://www.efe.com/efe/english/life/mexican-households-have-an-average-of-3-8-members-843-in-monthly-income/50000263-2666718 https://www.efe.com/efe/english/life/mexican-households-have...

by eej71 4y ago

alephnerd 4y ago

+1 on Invisible China. Scott Rozelle's group at the FSI has been doing some good work on trying to alleviate the opportunity gap that exists in several prefectures in the PRC.

bigcat12345678 4y ago
Xi Jinping know this problem all along. And his poverty eradication project is essentially siphoning embezzled fund from corrupted officials into rural areas. I bet Xi Jinping knows research work in the similar lines of Invisible China. https://www.worldbank.org/en/news/press-release/2022/04/01/lifting-800-million-people-out-of-poverty-new-report-looks-at-lessons-from-china-s-experience#:~:text=%E2%80%9CChina%20achieved%20its%20goal%20of,contributions%20to%20global%20poverty%20reduction https://www.worldbank.org/en/news/press-release/2022/04/01/l....
- alephnerd 4y ago
  Rozelle's group at Stanford has consulted at the prefecture level with the CCP [0]. The PRC is de facto federal with a significant amount of leeway at the prefecture (state) level. In fact, a number of PRC policy initiatives are often done in coordination with research groups at Stanford University. The Guiding Cases [1] is another ministerial level initiative that Stanford has consulted on. [0] - https://sccei.fsi.stanford.edu/reap/content/reap-home https://sccei.fsi.stanford.edu/reap/content/reap-home [1] - https://law.stanford.edu/china-guiding-cases-project/ https://law.stanford.edu/china-guiding-cases-project/
  - bigcat12345678 4y ago
    Nice, first time learn this, thanks!

pishpash 4y ago

If they are poorer than people in Vietnam they can just go to Vietnam to work. That's not that much different than going to southern China to work. It is almost a common market.

prox 4y ago
Wouldn’t Vietnamese people be massively favored? How much chance would a common Chinese person have. Language is also different enough, and culture probably as well.
toomanyrichies 4y ago
Given their poverty, are you certain they have enough disposable income (let alone the personal freedom) to just pick up and move to an entirely new country?
wwweston 4y ago
Labor rarely has the mobility that capital does, especially when international borders are involved.
alephnerd 4y ago
A number of rural migrant workers in China DO go to Vietnam to work[0], though this has been increasingly cracked down on by the Vietnamese government[1]. On a similar note, the Belt and Roads Initiative itself essentially acted as a jobs placement program to alleviate labor issues after the 2015-16 Stock Market crash in China [TODO: Find page numbers from notes] [0] - https://data.vietnam.opendevelopmentmekong.net/dataset/fefed011-e10b-40bf-98bb-c46b3249e7f9/resource/59e0db97-4d84-4e55-89a5-5d63dc5af587/download/recent-migration-of-chinese-to-vietnam.pdf https://data.vietnam.opendevelopmentmekong.net/dataset/fefed... [1] - https://www.rfa.org/english/news/china/workers-10292020111656.html https://www.rfa.org/english/news/china/workers-1029202011165...
grapeskin 4y ago
Imagine telling poor Americans to just move to Guatemala to do poor people work since it’s not that different and you’ll realize how insane that sounds.

granshaw 4y ago

They are well on their way of climbing onto the next rung of the manufacturing ladder and manufacturing more complex items with higher margins that can absorb higher wages …and transitioning more to a service economy …no?

alephnerd 4y ago
Nope. By most standards the PRC is stuck in the middle income trap. To paraphrase an earlier comment I wrote sometime back: Chinese household median income is around $4,700-4,800 in 2021, with massive disparities between First world comparable regions such as Beijing, Shanghai, and Tianjin, and rust belt regions like Wuhan [0]. Even the Chinese Premier Li Keqiang has noted that 600 million Chinese earn less that $140/month [1]. [0] http://www.stats.gov.cn/english/PressRelease/202201/t2022011 http://www.stats.gov.cn/english/PressRelease/202201/t2022011... [1] https://www.globaltimes.cn/content/1189968.shtml https://www.globaltimes.cn/content/1189968.shtml
- senttoschool 4y ago
  >middle income trap China is not a good example for the middle income trap. Middle income trap countries relied on cheap labors but could not move up in the value chain. China has moved up the value chain. They're the top or close to the top for many things including mobile phones, chip manufacturing (7nm), AI, software, 5G, electric car batteries, nuclear power, fusion research, quantum computers, etc. They also publish more scientific papers than any other country, by a significant amount. Conversely, true middle-income country like Brazil and Thailand have not moved up in the value chain one bit. China, Singapore, Hong Kong, South Korea, and Japan are all East Asian countries. They all have very similar values when it comes to education, hard work, and entrepreneurism. It's only a matter of time until China joins the first world. Their major cities are already first-world. Yes, there are countries that have cheaper labor than China right now but China should be able to replace that with higher value services such as exporting 5G tech or nuclear power plants.
  - alephnerd 4y ago
    Yet, median income [0] and HDI [1] both at the macro level and at the prefecture level are comparable to Brazil [2][3] and lag behind both Russia [4][5] and Mexico [6][7]. There is no denying the amount of growth the service sector in China has seen, yet a lot of this growth and development is among a sliver of the population living in better developed regions such as the various coastal prefectures. Beijing, Tianjin, Guangzhou, Shanghai, etc can be treated as developed, but what about the hinterlands such as Sichuan, Ningxia, Hunan, Guangxi, etc? This middle income trap is not a good thing by the way - I take no joy pointing this harsh truth out because this means hundreds of millions of PRC nationals are stuck in less than ideal economic positions. Also, if we are talking about the value chain, Brazil is very high in the ONG (Petrobras, Odenbrecht), Aeronautics (Embraer), Automotive, and Defense (Odenbrecht, Embraer) value chain thanks to economic policies in the 90s and 2000s that are comparable to those the PRC has started adopting in the past 10-15 years. [0] http://www.stats.gov.cn/english/PressRelease/202201/t20220118_1826649.html http://www.stats.gov.cn/english/PressRelease/202201/t2022011... [1] https://en.wikipedia.org/wiki/List_of_administrative_divisions_of_Greater_China_by_Human_Development_Index https://en.wikipedia.org/wiki/List_of_administrative_divisio... [2] https://en.wikipedia.org/wiki/List_of_Brazilian_federative_units_by_Human_Development_Index https://en.wikipedia.org/wiki/List_of_Brazilian_federative_u... [3] https://agenciabrasil.ebc.com.br/en/economia/noticia/2017-02/brazils-national-average-household-income-capita-40016-2016 https://agenciabrasil.ebc.com.br/en/economia/noticia/2017-02... [4] https://en.wikipedia.org/wiki/List_of_federal_subjects_of_Russia_by_Human_Development_Index https://en.wikipedia.org/wiki/List_of_federal_subjects_of_Ru... [5] https://tass.com/economy/1301957 https://tass.com/economy/1301957 [6] https://en.wikipedia.org/wiki/List_of_Mexican_states_by_Human_Development_Index https://en.wikipedia.org/wiki/List_of_Mexican_states_by_Huma... [7] https://www.efe.com/efe/english/life/mexican-households-have-an-average-of-3-8-members-843-in-monthly-income/50000263-2666718 https://www.efe.com/efe/english/life/mexican-households-have...