China Goes Irish And Begin To Price Themselves Out

[Realistbear]

http://uk.finance.yahoo.com/news/western-profits-wilt-on-china-s-surging-wages-tele-01558a040aea.html?x=0

Western profits wilt on China's surging wages

Ambrose Evans-Pritchard, 21:18, Wednesday 18 August 2010

Rising wage and production costs in China are eating into the profits of Western companies and may soonset off an exodus of multinational companies to cheaper locations.

The Achilles heal in all Tiger economies it seems.

Oh well, it was bad while it lasted I suppose.

[cells]

http://uk.finance.yahoo.com/news/western-profits-wilt-on-china-s-surging-wages-tele-01558a040aea.html?x=0

Western profits wilt on China's surging wages

Ambrose Evans-Pritchard, 21:18, Wednesday 18 August 2010

Rising wage and production costs in China are eating into the profits of Western companies and may soonset off an exodus of multinational companies to cheaper locations.

The Achilles heal in all Tiger economies it seems.

Oh well, it was bad while it lasted I suppose.

This is no bag thing, chinas workers will see its wage increase in real terms greatly over this decade. Those who require a lot of cheap human labour for tasks that are not easily automated (like textiles) will move onto the next big cheap free trade block.

Within 10 years, 20 years max the Chinese will be as rich as most EU citizens.

[Charlie The Tramp Returns]

Within 10 years, 20 years max the Chinese will be as rich as most EU citizens.

The Communist Government of The People`s Republic Of China have held power since the Revolution by ensuring the majority of their citizens remained poor, if what you say happens then the People`s Republic will be no more and I can`t see that happening as China is too far entrenched in Communist Ideology which they impose on the majority of their people.

[Mega]

What they need to do is find an Bankupt island off the coast of Europe..........that used to have LOTS of industrial output.......hmmmm

Mike

[Stay Beautiful]

The Communist Government of The People`s Republic Of China have held power since the Revolution by ensuring the majority of their citizens remained poor, if what you say happens then the People`s Republic will be no more and I can`t see that happening as China is too far entrenched in Communist Ideology which they impose on the majority of their people.

Its china coming up on USA neck and neck.

Chinese are so savvy.

[okaycuckoo]

Its china coming up on USA neck and neck.

Chinese are so savvy.

Really? So were the Japanese.

US will prevail.

[pl1]

Really? So were the Japanese.

US will prevail.

Hasn't China just taken over (literally this week) Japan's mantle of "world's second largest economy" which Japan held since the 1970s?

[South Lorne]

Those who require a lot of cheap human labour for tasks that are not easily automated (like textiles) will move onto the next big cheap free trade block.

....UK....

Within 10 years, 20 years max the Chinese will be as rich as most EU citizens.

.....should pass the UK in the next 2 years as Brown's scorched earth policy pays off....

[right_freds_dead]

The Communist Government of The People`s Republic Of China have held power since the Revolution by ensuring the majority of their citizens remained poor, if what you say happens then the People`s Republic will be no more and I can`t see that happening as China is too far entrenched in Communist Ideology which they impose on the majority of their people.

so just like a modern democracy then ?

[South Lorne]

so just like a modern democracy then ?

...yeah ...Clown Brown style.....

[right_freds_dead]

...yeah ...Clown Brown style.....

seems like both sides are going to meet in the middle, which to be fair is the most obvious way for a globe to run. hopefully thats how economies and politics will evolve. we cant have a two tier world.

how upset are we about a two tier housing market. imagine that market was food.

this site would be called rice price crash. RPC for short. or just 'R' if you are a serial poster.

[South Lorne]

seems like both sides are going to meet in the middle, which to be fair is the most obvious way for a globe to run. hopefully thats how economies and politics will evolve. we cant have a two tier world.

how upset are we about a two tier housing market. imagine that market was food.

this site would be called rice price crash. RPC for short. or just 'R' if you are a serial poster.

...more likely to be RPI ....RPC will be RIP....

Edited August 18, 2010 by South Lorne

[ken_ichikawa]

The Communist Government of The People`s Republic Of China have held power since the Revolution by ensuring the majority of their citizens remained poor, if what you say happens then the People`s Republic will be no more and I can`t see that happening as China is too far entrenched in Communist Ideology which they impose on the majority of their people.

Is it? There are actual noises about democratisation, I wrote about it on my blog about it here

http://ask-a-chinese-guy.blogspot.com/2010/08/china-must-reform-or-die.html

It is entirely possible, Taiwan changed from a fascist totalitarian state into a sham democracy in a space of 8 years under the leadership of Lee Teng Hui.

As I say on the blog in democracies you still have the same crooks at the top so the old men at the top of the CCP stay in place anyway.

[South Lorne]

Is it? There are actual noises about democratisation, I wrote about it on my blog about it here

http://ask-a-chinese-guy.blogspot.com/2010/08/china-must-reform-or-die.html

It is entirely possible, Taiwan changed from a fascist totalitarian state into a sham democracy in a space of 8 years under the leadership of Lee Teng Hui.

As I say on the blog in democracies you still have the same crooks at the top so the old men at the top of the CCP stay in place anyway.

...there are no true democracies ....

[_w_]

Within 10 years, 20 years max the Chinese will be as rich as most EU citizens.

I wonder if you've thought this through, not that I have a clear answer myself: to bring them to our standard of living, where's the extra food, commodities, energy going to come from? A rough guess, we would need to multiply food production by a factor of three or four in that timescale. How's you do that?

[right_freds_dead]

...more likely to be RPI ....RPC will be RIP....

theres nothing safer than oxen pulling a primitive tiller over ankle deep VC infested paddy water.

[aa3]

A number of nations would like to get millions of the labour intensive factory jobs in China. For example there is real development going on in Ethiopia, Kenya and Tanzania. 160 million people in those 3 nations combined.

Bangladesh is another with 160 million also.

[Britney's Piers]

A number of nations would like to get millions of the labour intensive factory jobs in China. For example there is real development going on in Ethiopia, Kenya and Tanzania. 160 million people in those 3 nations combined.

Bangladesh is another with 160 million also.

Now if they have such huge populations, why can't they find domestic demand, without sucking it out of western countries as well?

The globalisation scam relies on the East producing and the West consuming, with economic structures in each country reflecting these roles - the East with artificially surpressed currencies and wages, no labour rights and minimal human rights and the West with easy access to credit and pro-consumerism, anti-saving indoctrination of the populace. It's difficult for anyone in either country to reverse the role because the deck is stacked against them.

You cannot say that globalisation is the free market. It is not, precisely for these reasons. It's a hoax meant to drive down living standards in the west, perpetrated by globalist round tables and the UN, while a few at the top make off like bandits.

Edited August 19, 2010 by Britney's Piers

[Meat Puppet]

This is no bag thing, chinas workers will see its wage increase in real terms greatly over this decade. Those who require a lot of cheap human labour for tasks that are not easily automated (like textiles) will move onto the next big cheap free trade block.

Within 10 years, 20 years max the Chinese will be as rich as most EU citizens.

Not withstanding the availability of resources that has been brought up to make this possible this seems far too optimistic.

China's per capita GDP is currently about what South Korea's was in 1970. If China replicated their amazing growth since then they would still only have a per capita GDP that is less than one-third what it is in Western Europe currently after 20 years. And that would be a very optimistic outcome.

Edited August 19, 2010 by Meat Puppet

[Britney's Piers]

seems like both sides are going to meet in the middle, which to be fair is the most obvious way for a globe to run. hopefully thats how economies and politics will evolve. we cant have a two tier world.

IF the playing field was level, then yes, global competition would make sense, but it isn't.

Competition is supposed to lead to higher quality, but ask anyone whose dealt with outsourcing and they will tell you the quality is lower, and it happens only because of lower prices and wages. This is a huge misuse of resources!

[AvidFan]

I wonder if you've thought this through, not that I have a clear answer myself: to bring them to our standard of living, where's the extra food, commodities, energy going to come from? A rough guess, we would need to multiply food production by a factor of three or four in that timescale. How's you do that?

It's going to be the quickest rise and fall of empire so far. Demographic peak is 2011, so they've had it anyway. I'd say they transition very quickly from creditor to debtor, run up a 30-year credit cycle and build an entitlements programme out of it, consume the Earth and run places like Vietnam as the equivalent of their "East India" company. In 30 years they will have topped out with an empire loaded with even more debt than the West, an even more skewed wage distribution than the US (middle classes being made measurably poorer year on year) and even fewer morals.

[Mikhail Liebenstein]

theres nothing safer than oxen pulling a primitive tiller over ankle deep VC infested paddy water.

Yes, when all these western investments go pear shaped, there probably will be a whole load of VCs infesting the paddy fields.  I am told decomposing VCs are second only to bloated central bankers in terms of increasing rice yield.

[Mikhail Liebenstein]

IF the playing field was level, then yes, global competition would make sense, but it isn't.

Competition is supposed to lead to higher quality, but ask anyone whose dealt with outsourcing and they will tell you the quality is lower, and it happens only because of lower prices and wages. This is a huge misuse of resources!

Actually a lot of outsourcing firms will simply go bust as these rises happen. They have large numbers of relatively unskilled workers, and frankly only get through by a lot of trial and error and wasted time on the part of individual workers.  

As long as the west can just hold onto its skill and education levels for another decade or so I suspect we'll see a premium again for quality and know how. In my book one good coder (especially on safety critical stuff) is worth a 100 code monkeys.

[wombat999]

What they need to do is find an Bankupt island off the coast of Europe..........that used to have LOTS of industrial output.......hmmmm

Mike

WHY??????

[AvidFan]

Just think yourself lucky you don't have a horn growing out of your forehead.

Thanks for that. How do you know I haven't?