Beijing City To Raise Minimum Wage 21%

[interestrateripoff]

China appears to be spiralling out of control. A double digit wage increase in under 6 months gives some indication of what the real level of inflation is in China.

Still it's all contained.

[ken_ichikawa]

Damned evil commies!

Raising living standards,

containing inflation

Spreading the wealth around a bit more.

Those are all actions of a deranged terrorist rogue nation.

Maybe we should try a 30 minutes to destruction WMD propaganda campaign?

They should rely on conventional good measures like western nations money printing, ZIRP, money printing, inflation, money printing, stimulus spending, money printing. giving free moneney to the banks, money printing and externilising. Les not forget some money printing and of course money printing.

[ken_ichikawa]

wasnt making a statement either way on commies-cos we're all commies now,but let's face it,they're doing this to keep tehmselves in power.

Yup I know that, the CCP wants to remain in power at all costs, they detect some sort of imbalance they attempt to paper over it. Else they be faced with lots of people with pitchforks which you can't shoot (the army in CHina is only 4 million strong the peasants outnumber the army 300-1)

[jonb]

Damned evil commies!

Raising living standards,

containing inflation

Spreading the wealth around a bit more.

Those are all actions of a deranged terrorist rogue nation.

Maybe we should try a 30 minutes to destruction WMD propaganda campaign?

They should rely on conventional good measures like western nations money printing, ZIRP, money printing, inflation, money printing, stimulus spending, money printing. giving free moneney to the banks, money printing and externilising. Les not forget some money printing and of course money printing.

I think it is good news for us overall. This rise makes the minimum wage 68p per hour. If it continues to increase at this rate, combined with revaluation of the CNY then it could start to become competitive to bring manufacturing back to this country.

[ken_ichikawa]

I think it is good news for us overall. This rise makes the minimum wage 68p per hour. If it continues to increase at this rate, combined with revaluation of the CNY then it could start to become competitive to bring manufacturing back to this country.

Wages are a tiny component, the land prices and restrictions are the bigger problem. I can fill a factory with robots, the UK will want 2-4 million for the land and rights. China will fall over itself to offer the land (and a chance to steal my technology).

Edited December 29, 2010 by ken_ichikawa

[_w_]

That's the politburo making sure the crowds in their own backyard will behave. Information control will be easier and risk to themselves lowered if riots occur away from Beijing.

I suspect Shanghai will get the same privileged treatment (too many foreigners could report on disturbances) while the rest of the country will be left to fend for itself.

Edited December 29, 2010 by _w_

[Mikhail Liebenstein]

I think it is good news for us overall. This rise makes the minimum wage 68p per hour. If it continues to increase at this rate, combined with revaluation of the CNY then it could start to become competitive to bring manufacturing back to this country.

Inflationary increases have a habit of increasing their pace. Right now at the current pace, Beijing will match the UK for minimum wage costs in 5 years (10-11 periods of 21% inflation every 6 months). Of course minimum wages have tended to grow at more sedate rate than other wages and costs - and right now skilled labour costs in China are broadly what they are here.

Given all the other risks and costs of doing business in China and the fact you need more people to do the same work, I reckon companies that have made a decision to outsource there recently will start to regret it in the next 2-3 years as their costs spiral out of control.

It will be interesting to see companies unwind their Chinese positions; the reason China was attractive in the first place was because you could get large numbers of workers at low cost, as a result workers are used to working in large hierarchical teams. If costs need to be cut by reducing workers, I suspect we'll see the ability of these teams and the companies that run them slump. If you are to get away with this you need skilled autonomous workers, and the problem with China is that they lack autonomy. The UK had 100 years to get this right as it moved from mass production to so called knowledge workers, but in China this will happen in 5 years and the workforce probably won't keep up.

Also never under estimate the problem of having a large, angry ex workforce. I can see lots of boss-napping in China in the next 5 years. So security cost will go through the roof, meanwhile workers will be appeased with lots of fancy stuff like mandatory pension schemes to keep them quiet.

So all in all I can see a lot of companies that have bet big on China going down the tubes in the next 5 years. My top ones to watch would be the big more traditional IT companies - I could see an IBM or a Cisco suddenly imploding having run out of ideas other than cost cutting.

Edited December 29, 2010 by Mikhail Liebenstein

[The Masked Tulip]

I think you are going to see similar things here in the UK - especially in places like London. I have noticed a big increase in IT contract rates in the past 2 months in the regions let alone in London. The cost of just renting in London is such now that I expect, in 2011, we will see a big leap in salaries for skilled people otherwise simply why bother going to work there.

Inflation is well out of control now.

[Mikhail Liebenstein]

I think you are going to see similar things here in the UK - especially in places like London. I have noticed a big increase in IT contract rates in the past 2 months in the regions let alone in London. The cost of just renting in London is such now that I expect, in 2011, we will see a big leap in salaries for skilled people otherwise simply why bother going to work there.

Inflation is well out of control now.

The only rider I'd add to that TMT is that if we get a 20% pay rises, you can bet the £ drops by the same amount. That is internal inflation.

Interestingly for China, and I forgot to even mention the chances of the RMB rising, add in 30% there and I'll drop my prediction for the minimum wage being on par down to 4 years.

[The Masked Tulip]

The only rider I'd add to that TMT is that if we get a 20% pay rises, you can bet the £ drops by the same amount. That is internal inflation.

Yes, and something that King will deny is going on and will fluster and bluff throughout 2011 rising people's wages are being eroded... but I suspect that the banks, in particular, will do this - in fact are doing this already.

[ken_ichikawa]

That's quite a lot of paper. A 21% increase in Jan to 1160 after a 20% rise in June. Working that out it looks like the min wage in May was only 799, so that's a 45% increase in only 7 months!

Can you confirm whether Chinese menial jobs are priced along min wage lines, as they are here? Otherwise, this rise won't affect as many as we might think.

Nope can't confirm it either way. I can however confirm that truck acts are very much in fashion in China. Whereby people are paid in RMB but the cities built by the companies have shops and accomodation which is owned by their company which built it which have highly inflated prices which more than cover the wage increases.

I would however add though the Chinese menial worker situation (the ant colonies) it is not as hopeless as it first looks like. Many go there work 2-5 years saving enough money to go home set up a business or buy a house in their home cities and villages. When have you ever heard of a NMW worker saving enough in 2-5 years for such purposes?

[interestrateripoff]

Nope can't confirm it either way. I can however confirm that truck acts are very much in fashion in China. Whereby people are paid in RMB but the cities built by the companies have shops and accomodation which is owned by their company which built it which have highly inflated prices which more than cover the wage increases.

I would however add though the Chinese menial worker situation (the ant colonies) it is not as hopeless as it first looks like. Many go there work 2-5 years saving enough money to go home set up a business or buy a house in their home cities and villages. When have you ever heard of a NMW worker saving enough in 2-5 years for such purposes?

Have hooker prices increased as well?

[headrow]

Wages are a tiny component, the land prices and restrictions are the bigger problem. I can fill a factory with robots, the UK will want 2-4 million for the land and rights. China will fall over itself to offer the land (and a chance to steal my technology).

What is your technology?

Talking ultra violent drivel on an internet forum?

[_w_]

What is your technology?

Talking ultra violent drivel on an internet forum?

Erm, sorry but you need to get this right: _I_ am the only China basher in the village.

[headrow]

Erm, sorry but you need to get this right: _I_ am the only China basher in the village.

Sorry. I'll go back to my corner.

[_w_]

Sorry. I'll go back to my corner.

[wonderpup]

These Chinese people are behaving like communists, for christ's sake. Don't they know the only way to create real wealth is to give all the money to rich people- the fools.

Interesting to note that the Chinese Leadership is far more afraid of their population than the democratic states seem to be- I suppose this stems from the fact that there is no 'safety valve' in the form of elections over there- just a binary 'submit or revolt' model.

The real danger to those who would suborn a democratic state is that the gloss of democracy will wear too thin before you have consolidated your power, precipitating the kind of violent backlash the Chinese leadership is so keen to avoid over there.

[ken_ichikawa]

What is your technology?

Talking ultra violent drivel on an internet forum?

Its a hypothetical statement.

[ken_ichikawa]

Interesting to note that the Chinese Leadership is far more afraid of their population than the democratic states seem to be- I suppose this stems from the fact that there is no 'safety valve' in the form of elections over there- just a binary 'submit or revolt' model.

It's normal history and culture. Emperors and son of heaven leader types have always always had an absolute divine mandate. Problem is if you get flooding an earth quake or famine or drought. This is 'heaven' withdrawing the mandate of heaven from the leader.

So you get a big earth quake? It is the heavens saying they are upset with the emperor. Pitchforks check? Lock and load they march on the capital, engage in a sea of blood etc.

Also time after time if you annoy them enough they will make a stand. They were tired of the Japanese and each other in the 20s and 40s and fought a bloody civil war to get over it. They were tired of the BS in 1989 and would stand and be gunned down in their 1000s. As a government normally when you bring out the guns everybody runs away. But when you see them stand and be gunned down, you start to think hmm blimey! There is something different about it this time.

This has been replayed in HK 1966 67 81 riots. It went all Injin world when a tiny spark let a powder keg. 67 was particularly nasty after the British crushed the riot and murdered the person who started it they went home licked their wounds and made bombs for the next encounter.

[interestrateripoff]

This has been replayed in HK 1966 67 81 riots. It went all Injin world when a tiny spark let a powder keg. 67 was particularly nasty after the British crushed the riot and murdered the person who started it they went home licked their wounds and made bombs for the next encounter.

Quick learners then.

All hell could break out globally if the debt slaves of the world revolt.

[miko]

So all in all I can see a lot of companies that have bet big on China going down the tubes in the next 5 years. My top ones to watch would be the big more traditional IT companies - I could see an IBM or a Cisco suddenly imploding having run out of ideas other than cost cutting.

Oww lets hope so they deserve it fingers crossed.

[erranta]

Damned evil commies!

Raising living standards,

containing inflation

Spreading the wealth around a bit more.

Those are all actions of a deranged terrorist rogue nation.

Maybe we should try a 30 minutes to destruction WMD propaganda campaign?

They should rely on conventional good measures like western nations money printing, ZIRP, money printing, inflation, money printing, stimulus spending, money printing. giving free moneney to the banks, money printing and externilising. Les not forget some money printing and of course money printing.

It will be cheaper to buy "Made in Blitain" rat-a-tat tat soon!

[ken_ichikawa]

It will be cheaper to buy "Made in Blitain" rat-a-tat tat soon!

Why do you constantly maintain that Chinese people who speak English have a lisp? And cannot pronounce Rs? They don't they speak accented but completely understanable english AND Chinese. Can many UK people lay claim to being able to speak ONE language with proficiency?

[Ruffneck]

A number of Chinese here can't speak English at all.

They must have come illegally via boat is the only explanation i have for how they got in.

[erranta]

Why do you constantly maintain that Chinese people who speak English have a lisp? And cannot pronounce Rs? They don't they speak accented but completely understanable english AND Chinese. Can many UK people lay claim to being able to speak ONE language with proficiency?

Eff orf you Masonic 'pith' taker!

I have other reasons for spelling it - Blitish and have hundreds of previous posts with it spelt like that - so stop trying to put different things in peoples minds like the other Masonic *****as who have tried it on in past couple of weeks with nazis and jewish falsities!

There is a chink in your link above!