Bye-bye cheap, Chinese labor

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Zyzzyva

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BEIJING, China — Factories in China’s manufacturing heartland are feeling the squeeze again, with minimum wages in Guangdong province set to rise by as much as 20 percent on Jan. 1 for the second time in less than a year.

And while one Chinese province’s minimum wage might seem like a local issue, the salary question underlines a continuing momentum in China toward building higher-end business and better jobs.

In other words, the days of endless, cheap Chinese labor are limited. What that means for consumers in the United States and elsewhere is simple: Things are going to cost more, soon.

“I think there’s quite a good argument now that the global race to the bottom has been concluded,” said Geoffrey Crothall of the China Labour Bulletin, a Hong Kong-based labor-rights group. “There’s nowhere else to go.”
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http://www.globalpost.com/dispatch/.../111109/china-economy-manufacturing-guangdong
 
Isn't this good news for all of our local manufacturers?

Maybe now our local stuff will become more attractive?

But yeah, not good for cheap prices across the board.
 
Its all relative, those guys will still be getting only a pittance of what laborers in other parts of the world get, no one can really compete head to head with china when it comes to cheap labour/production on a huge scale.
 
Garyvdh said:
Isn't this good news for all of our local manufacturers?

Maybe now our local stuff will become more attractive?

But yeah, not good for cheap prices across the board.
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It is good for everyone. Local manufacturing jobs are more important than slightly cheaper toys.

But obviously it depends what type of product is being manufactured. An iPhone for instance is built with about 8 dollars of labour, so a 20% jump in labour costs won;t mean much to the total phone price at the end of the day. But what is clear is that China is beginning to have growing pains and its only going to increase, which long term is better for the world.
 
Fader4 said:
Its all relative, those guys will still be getting only a pittance of what laborers in other parts of the world get, no one can really compete head to head with china when it comes to cheap labour/production on a huge scale.
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For now yes, but this is just the start.

China should always have some advantage; what's important is the gap is closing somewhat which will help the USA for instance compete. If this will help us much, with our poor productivity, probably not.
 
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For branded products, e.g. Apple products, prices for consumers won't increase as Apple and other companies pay their chinese manufacturers a pittance. They'll have to start paying more.

For products with no real brand or 'worthlesss/pointless' brands, it will be interesting to see how it works out. In some instances, those products will get manufactured in other South East Asia countries instead like Vietnam, Indonesia, Thailand, Myanmar, etc. China is trying to move up the value chain, so that won't neccessarily affect them to badly.

PS. there's no hope for SA manufacturers of low cost products. Our labour will never be anywhere near as efficient as those asian slave workers (even at ten times the wages)
 
Carbon_Fibre said:
For branded products, e.g. Apple products, prices for consumers won't increase as Apple and other companies pay their chinese manufacturers a pittance. They'll have to start paying more.

For products with no real brand or 'worthlesss/pointless' brands, it will be interesting to see how it works out. In some instances, those products will get manufactured in other South East Asia countries instead like Vietnam, Indonesia, Thailand, Myanmar, etc. China is trying to move up the value chain, so that won't neccessarily affect them to badly.

PS. there's no hope for SA manufacturers of low cost products. Our labour will never be anywhere near as efficient as those asian slave workers (even at ten times the wages)
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The long term picture is slightly more interesting in that as the slave laborers earn more they will eventually expect better working conditions too. The Chinese communist political model will also start coming under pressure as the Chinese think more of themselves. This upwards pressure will likely lead to a lot of rioting followed by heavier political oppression which should change the dynamics of the country long term.

Also, robots are already starting to do a lot of the slave grade work which should see quite a bit of manufacturing moving back to western countries if the political will is there - which it clearly is. Countries are beginning to appreciate the need for low skilled manufacturing jobs again.
 
Rampant cost pull inflation here we come. To make matters worse Europe is on the brink of collapse due to the sovereign debt crisis and if Italy is allowed to fall the contagion which would have brought about its demise would spread across Europe and the globe. Bleak times lay ahead, put those new jobs and cars on hold for tad longer if you can fellas.
 
see how minimum wage laws and china's control of yaun is going to give everybody headaches
 
minimum wages is the wrong way to go about it. The Chinese labourers themselves are demanding more now. Companies must pay what the market demands. I don't like across the board minimum wages though, it always causes more harm than good.
 
It's cyclical. China will rise, the west will fall etc. there will always be somebody living on a rubbish tip wanting a better life. There will always be somebody who has become lazy from inherited wealth or socialism.
 
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