> But I'm not entirely sure how this fits into a global economy. If workers in China are working for cents there is no way a similar industry in Australia can c

> But I'm not entirely sure how this fits into a global economy. If workers in China are working for cents there is no way a similar industry in Australia can compete with a minimum wage of $18 an hour. We've seen this in textile manufacturing in particular. This has been discussed to death here in Portugal. Portugal had, up until the 90s, a strong textile and shoe making industry. It moved to the east during the late nineties, early noughties. Strangely, the last five years have seen a renaissance. Our cost of labor, while cheap in EU terms is orders of magnitude above eastern countries. The explanation for the resurgence of the industry is twofold: a) Cost of labor accounts for less than one third of final product cost; b) Logistics advantages can easily recover the cost difference. Think short lead times, work force adaptability, higher automation, lower defect ratios, smaller inventory. Couple this with fashion sticking less and less to two collections per year (and going for high adaptability during the season), and you get a competitive advantage China and Vietnam do not have.