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Definitely an interesting article. I do think two points are worth mentioning: 1. China's 'reserve army of labor' hasn't necessarily been exhausted yet. Wages

by austinz 12y ago

Definitely an interesting article. I do think two points are worth mentioning: 1. China's 'reserve army of labor' hasn't necessarily been exhausted yet. Wages in the inland provinces still lag those found in the coastal provinces, and government policy is at least nominally trying to encourage investment and development there in an effort to close the gap. Smaller countries looking to jump-start their economies through export-driven industrialism may still need to compete with those provinces and should keep in mind their advantages and disadvantages (e.g. high freight costs). 2. It isn't enough for high wages alone to drive low-paying factory work out of China, Vietnam, or the other major manufacturing nations. Quality infrastructure, a reasonably well-educated workforce, political stability, etc are all contributing factors. Leaving aside the debate over whether export-driven industrialism is good or not, rising wages provide an opportunity for smaller countries to capture these jobs, but only if they take the initiative.

thaumasiotes 12y ago
Minor point: as to > China's 'reserve army of labor' hasn't necessarily been exhausted yet. Wages in the inland provinces still lag those found in the coastal provinces Wages in the inland provinces will, most likely, always lag the coastal provinces, for the same reason that wages in the inland provinces of the US lag coastal wages. The ocean brings commerce; commerce is money.
crdoconnor 12y ago
>China's 'reserve army of labor' hasn't necessarily been exhausted yet. Wages in the inland provinces still lag those found in the coastal provinces, and Inland province wages lag because building a factory in backwater China guarantees that you will be cut off from China's industrial infrastructure and your shipping costs will skyrocket. Hence no jobs there. If you want a job, you move to the coast. Those regions really can't compete with places like Vietnam or Bangladesh that have access to a decent port AND have the same level of wages. Their best hope for rising wages is still from migrant workers funneling cash home. >government policy is at least nominally trying to encourage investment and development there in an effort to close the gap. I don't think it's really working. A large proportion of that investment (if not most) is being blown on useless projects and siphoned off by corrupt local government officials and their cronies. Worse, it's (nominally, at least) debt driven investment, too, so the provinces will need enormous bailouts or stimulus at some point if they are not going to suffer a crippling depression. This happens in coastal China too, but the corruption and level of malinvestment isn't nearly as bad. I think on some level inland China will always be very poor. I can well imagine quality of life in coastal Chinese cities overtaking the US and Bangladeshi/Vietnamese cities moving to first world status while dire poverty still exists in the Chinese countryside.

by austinz 12y ago

thaumasiotes 12y ago

Minor point: as to > China's 'reserve army of labor' hasn't necessarily been exhausted yet. Wages in the inland provinces still lag those found in the coastal provinces Wages in the inland provinces will, most likely, always lag the coastal provinces, for the same reason that wages in the inland provinces of the US lag coastal wages. The ocean brings commerce; commerce is money.

crdoconnor 12y ago

>China's 'reserve army of labor' hasn't necessarily been exhausted yet. Wages in the inland provinces still lag those found in the coastal provinces, and Inland province wages lag because building a factory in backwater China guarantees that you will be cut off from China's industrial infrastructure and your shipping costs will skyrocket. Hence no jobs there. If you want a job, you move to the coast. Those regions really can't compete with places like Vietnam or Bangladesh that have access to a decent port AND have the same level of wages. Their best hope for rising wages is still from migrant workers funneling cash home. >government policy is at least nominally trying to encourage investment and development there in an effort to close the gap. I don't think it's really working. A large proportion of that investment (if not most) is being blown on useless projects and siphoned off by corrupt local government officials and their cronies. Worse, it's (nominally, at least) debt driven investment, too, so the provinces will need enormous bailouts or stimulus at some point if they are not going to suffer a crippling depression. This happens in coastal China too, but the corruption and level of malinvestment isn't nearly as bad. I think on some level inland China will always be very poor. I can well imagine quality of life in coastal Chinese cities overtaking the US and Bangladeshi/Vietnamese cities moving to first world status while dire poverty still exists in the Chinese countryside.