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fransgeraedts (99.60)

The real China heroes; unwarranted pessimism (3)



August 22, 2010 – Comments (0) | RELATED TICKERS: FXP , YANG

a flashpoint for the debate about globalization and its consequences for the US has of course been the transfer of manufacturing jobs from the US to China. I believe many of those that comment on that here in Caps are to pessimistic about the future of the US-manufacturing and the effects of globalization on the US economy. See my earlier posts.

One of the reasons for my more optimistic view are the coming developments in China. I expect both an accelaration of wage-growth in china an the social and political turmoil that goes with it.

In that context this article seems relevant because it describes current trends and thinking about wage-growth in China from an inside perspective.

I recommend the website and the app for everybody interested in the developments in China. (I would be gratefull for any suggestion for other reliable dedicated sources on China. (I untill now only used FD, WSJ and the Economist))

To give an idea about my broader thinking on China i repost here a comment made on a post by Lordrobot: Another tech company leaves America. That post fits the profile of the unwarranted pessimism about manufacturing. But it also demonstrates an attitude towards China that i find worrying. It is a strange kind of admiration. It reminds me of the fellow travellers of an earlier era. 

Dear Lord Robot,

it is simple. Would you want to be a chinese worker? Would you want your son to be a chinese worker? your daughter?

Or do you simply want to profit from their absurd low wages, their horrible working hours and dire working circumstances? Profit as an investor, as a salesman selling them coal, a manager that employes them earning 500 times as much as they do, or as a consumer who gets to pay less for sneakers and i-pads and plastic toys?

Asian-work-ethic? You mean the despair of poverty?

Ah ..and that part about enforcing their laws..grin... someone probably forget to mention to you that this is still an authoritarian state? no liberties? that it is one of the most corrupt states on earth? that it has a prisonsystem with real slavelabor? that political dissent is life threateningly dangerous?

But hey if you can make an extra buck who cares right?

Now, dont misunderstand me. I am very much in favour of capitalism and freemarkets finally arriving in China. I am convinced that it will unlock a wealtheffect not just for China but for the whole world. I am also aware that because of the low productivity of their workers capitalist development there can only go the low wages route.  And of course there will be those that will abuse that situation and try to prolong low wages even if productivity rises -to make the extra buck, right? But i am in favour of the capitalist development of China in the first place because it will raise the real incomes of the Chinese common folk. It will lift them out of abject poverty. It will lift (many? of) them towards a middle class existence. But that of course will not happen without a struggle. So my heroes of China's economic development are the union-leaders there that risk life and limb to organize workers and fight for better wages and better working conditions! My China heroes are the chinese entrepeneurs that move with that upsurge and adapt their corporate strategy instead of using the corrupt power of the state to try and crush it. My China heroes are the transglobal corporations that demand from their Chinese supliers that they continuesly raise wages and working conditions. My China heroes are the corruptionfighters that try to clean the state up. My China heroes are the politicians and bureaucrats within the Chinese state that try to create a working judiciary, that try to privatise economic sectors further, that try to build democratic structures.My China heroes are the Chinese people that already act as if they were free citizens and take all the risks that that involves.


To conclude this post another example of a fellow traveller of the authoritarian China regime. Listen to Mr. Wynn and shiver. The last time business tycoons like this became fellow travellers Mussolini and Hitler guided their tours. Wynn on China versus US.



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