China’s Social Unrest
You’ve no doubt heard cynical comments complaining that all of our manufacturing jobs are being exported to China and the other far-eastern countries. But remember: No trend lasts forever.
One of China’s main advantages from an economic standpoint is that it offers labor very inexpensively. This will only continue until the Chinese rediscover the concept of unions, and I believe they’re heading that way. A report from China Digital News quotes the Asia Times as follows: “Recent protests have been sparked by the near-fatal beating of a migrant worker, an illegal hike in taxi fees and low wages in an electronics plant - to name a few. These are but the tip of the iceberg in the nation of 1.3 billion people where the wealth gap is widening, corruption is widespread and the rule of law is far from entrenched. For those who know their Chinese history, this raises the specter of devastating peasant and other revolts over the ages, sometimes cataclysms that have toppled regimes.” (My emphasis)
According to Marginal Revolution, “58,000 major incidents of social unrest took place in China in 2003 — an average of roughly 160 a day and 15 percent more than the year before.”
I believe that the Chinese labor bubble will collapse as either A) the Chinese unionize or B) the Chinese revolt against the system holding down their wages.
As the Chinese proverb goes, interesting times.