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Chinese government — worried about an ever widening gap between rich and poor — has raised the minimum wage 14% to 21% in the past year. To Harley Seyedin, president of the American Chamber of Commerce in South China, the conclusion is inescapable: "The era of cheap labor in China is over."
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The changing economics of Made in China will benefit both the rich and poor world. Countries like Cambodia, Laos, India and Vietnam are picking up some of the cheapest labor manufacturing left by the Chinese. And according to a recent study by the Boston Consulting Group (BCG), there is already evidence of at least the beginning of a shift in manufacturing operations returning to the U.S. Last year, Wham-O, the company that makes inexpensive, albeit iconic, toys, announced it was moving 50% of its Frisbee and Hula Hoop production back to the U.S. from China and Mexico, a move that created hundreds of new American jobs.
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According to the BCG study, in 2000, China's average wage rate was 36% of the U.S.'s, adjusted for productivity. By the end of 2010, that gap had shrunk to 48%, and BCG estimates that it will be 69% in 2015. "So while the discussion in the short term favors China," says Hal Sirkin, senior partner at BCG and the author of the recent study, "the spread is getting down to a smaller and smaller number. Increasingly what you're seeing [in corporate boardrooms] is a discussion not necessarily about closing production in China but about 'Where I will locate my next plant?'"
Originally posted by Rockdisjoint
reply to post by Frogs
If that was true, why do corporations choose to manufacture in China? There are countries with lower wage rates than China's. Or why do corporations from, Asia and Europe still outsource jobs to the U.S if the U.S has some of the highest wages in the world?edit on 27-6-2011 by Rockdisjoint because: (no reason given)
It wasn't possible, that's why these "businesses" all closed their doors in America and moved overseas. DUH
The American Wage was apparently putting a real monkey wrench in them getting that 700 million a year salary. I don't have to source anything, just look at Detroit.
Once Chinese wages reach near parity with other developed countries, there will be no incentive to outsource work there. In fact, when cartage costs are factored in, their products wind up being MORE expensive!
Originally posted by Rockdisjoint
........... on top of that there are many other incentives that keep businesses coming to China.
edit on 27-6-2011 by Rockdisjoint because: (no reason given)
nothing lasts forever and china is getting a taste of what they have done to others just like we got a taste of what we have done to others.
Originally posted by Rockdisjoint
reply to post by neo96
I thought they just copied the tech, that isn't the same thing as theft. The Chinese got nothing from this deal.....
but to complain about it is just retarded.
Charles R. Smith Tuesday, Jan. 14, 2003
A newly released document from the U.S. State Department reveals that the most successful Chinese espionage operation in recent history occurred during the Clinton administration.
The document accuses Hughes Space and Communications Company of violating U.S. national security 123 times by knowingly sending detailed missile and space technology directly to the Chinese army.
According to the State Department, the most serious violations occurred when Hughes gave the Chinese army information that supported its analyses of the investigation of the January 1995 failure of the launch of a China Long March 2E (LM-2E) rocket carrying the Hughes-manufactured ASTAR II commercial communications satellite.
Chinese General Shen Rongjun led the penetration of U.S. missile and space technology during the Clinton administration. The 2002 State Department letter makes it clear that they believe Gen. Shen led the successful penetration of the Clinton administration and Hughes.
In 1994, Gen. Shen was second in command of a Chinese army unit known as COSTIND, or the Commission On Science, Technology and Industry for National Defense. Shen, and his COSTIND operatives in front companies, secured a wide range of advanced missile and space technology from Hughes after a 1994 meeting with Commerce Secretary Ron Brown.