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China's Excess Labour Evapourates, Inflation Picks Up

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http://www.bloomberg.com/apps/news?pid=20601068&sid=aZGJ0mc_Dm5o

China Reaches Lewis Turning Point as Inflation Overtakes Labor

By Bloomberg News

June 11 (Bloomberg) -- Shenzhen Jufeng Handicraft Co. was so eager to ensure employees returned to work after February’s Lunar New Year holiday that it threw them a party, handed out gifts and bused workers to homes 1,000 kilometers away.

“We needed to do more to make them stay,” said Sunny Jia, sales manager of the Shenzhen-based company, which makes linen, leather bags and cabinets for such customers as Oscar Collections Ltd. in the U.K. “All our customers wanted orders shipped within a month.”

China, once an abundant provider of low-cost workers, is heading for the so-called Lewis turning point, when surplus labor evaporates, pushing up wages, consumption and inflation, said Huang Yiping, former chief Asia economist at Citigroup Inc. The result may prompt manufacturers to switch to cheaper countries such as India and Vietnam.

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http://www.cnbc.com/id/37629716

China Inflation Picks Up but Not All See Tighter Policy

Published: Thursday, 10 Jun 2010 | 11:38 PM ET

By: Reuters

Chinese inflation quickened to a 19-month high in May, but a moderation of growth in factory production and capital spending could further ease worries that the world's third-largest economy runs the risk of boiling over.

Consumer prices rose 3.1 percent in the year to May compared with a 2.8 percent annual rise in April, confirming a Reuters report from Wednesday and exceeding the official year-average target of 3 percent.

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If they try and keep China going, they'll reach the "all 15's" scenario a few commentators have suggested: 15% growth, 15% inflation, 15% interest rates. Rapid Renminbi appreciation will follow. In fact, this is perhaps how they are going to play it. Feedthrough inflation to exports and therefore our imports will follow. Maybe a year of "bad" 5% growth first?

It's either that or they'll let it go on diminished Western demand for goods. But with houses secured on debt at 100 times personal income in some major cities, they need to inflate even more then we do...

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they'll need to be having 2 children per family soon...for growth.

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China seems to be nearing a turning point, that Lewis turning point with wages. Where they simply run out of the once endless masses of migrant workers who constantly held down wages. If people didn't like the low wages there was always another migrant worker ready to take their place. But that is changing rapidly it looks like. One factor in it is the development in China's hinterlands is huge. So migrants are moving to the cities in the hinterlands.

If hundreds of millions of Chinese get some real disposable income that could really help the western industrial economies. One to watch is personal computers and laptops.

Companies which need low cost labour can move to South Asia which is about 20 years behind China.

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China seems to be nearing a turning point, that Lewis turning point with wages. Where they simply run out of the once endless masses of migrant workers who constantly held down wages. If people didn't like the low wages there was always another migrant worker ready to take their place. But that is changing rapidly it looks like. One factor in it is the development in China's hinterlands is huge. So migrants are moving to the cities in the hinterlands.

If hundreds of millions of Chinese get some real disposable income that could really help the western industrial economies. One to watch is personal computers and laptops.

Companies which need low cost labour can move to South Asia which is about 20 years behind China.

I think you miss the point...they dont need western industrial economies...like the Earth doesnt need Mars.

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  • 142 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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