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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhy the corporate sector is desperate for the TPP
It's not cheap to build things in China anymore.
China is showing rapid increases in wages and signs of resilience in hiring despite slowing growth, a reassuring sign for leaders seeking to put more money in the pockets of ordinary Chinese, but a trend that could prove difficult to sustain as countries nearby threaten to encroach on China's manufacturing dominance.
Chinese private-sector wages rose 14% in 2012, data showed Friday, good news overall for Beijing's push to make consumer spending a more important part of growth. But higher labor costs also hurt business profitability and export competitivenesswhich could pose its own risks to the economic recovery.
Chinese private-sector wages rose 14% in 2012, data showed Friday, good news overall for Beijing's push to make consumer spending a more important part of growth. But higher labor costs also hurt business profitability and export competitivenesswhich could pose its own risks to the economic recovery.
Countries such as Bangladesh, Cambodia and Vietnam have all ramped up their garment sectors as global retailers look for alternatives to China.
Crystal Group, an apparel producer for Marks & Spencer, Abercrombie & Fitch, and Gap, says it has more than tripled its staff in Vietnam over the past three years, but made only small increases in its China workforce. "It's a simple matter of economics for us," says Andrew Lo, CEO of the Hong Kong-based company, as it becomes less cost-effective to make basic t-shirts and jeans in China
Crystal Group, an apparel producer for Marks & Spencer, Abercrombie & Fitch, and Gap, says it has more than tripled its staff in Vietnam over the past three years, but made only small increases in its China workforce. "It's a simple matter of economics for us," says Andrew Lo, CEO of the Hong Kong-based company, as it becomes less cost-effective to make basic t-shirts and jeans in China
Rising manufacturing costs in China were one reason private-equity firm Grumman Hill Group LLC decided to put shoe maker Aerosoles up for sale this year, a person familiar with the matter said. The Edison, N.J.-based shoe company makes virtually all of its products in China, but wage inflation there is pressuring margins, this person said..
With that experience replicated across China's factories, industrial profits contracted for much of 2012. Export growth fell to 7.9% from 20.3% in 2011, as Chinese firms lost out to Vietnam and other low-cost competitors. That suggests China's leaders face a tough choice between keeping wages on a rising trend to boost household income, and controlling costs for the manufacturers that create many of the mainland's jobs.
"So far we haven't seen unemployment rates going up, with real estate, infrastructure, and services supporting strong job creation," said Haibin Zhu, China economist at J.P. Morgan. "But wage growth can't be sustained without profit growth. If the corporate sector remains weak, rapid wage growth will be difficult to sustain."
http://www.wsj.com/articles/SB10001424127887324767004578488233119290670
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Why the corporate sector is desperate for the TPP (Original Post)
Jesus Malverde
May 2015
OP
China taking all our jobs, now other countires taking China's jobs. Karma is a bitch.
patricia92243
May 2015
#4
Hell Hath No Fury
(16,327 posts)1. Bingo!
Period, end of story.
It will be interesting watching China deal with the ramifications of their experiment with capitalism. Could we see the start of a new Worker's revolution in the near future??
moondust
(20,006 posts)2. "Ideally, you'd have every plant you own on a barge
to move with currencies and changes in the economy." -Jack Welch, 1998
Jesus Malverde
(10,274 posts)7. Great quote and insight into the minds of Americas leaders....nt
awoke_in_2003
(34,582 posts)3. China, one day, will have a strong middle class
They are basically where we early Industrial Revolution.
patricia92243
(12,601 posts)4. China taking all our jobs, now other countires taking China's jobs. Karma is a bitch.
Jesus Malverde
(10,274 posts)5. Just wait for the robots.
nikto
(3,284 posts)6. This tells me how much *the whole World* needs a Labor-Movement
Where are the greedy Corps gonna' go then ---- Mars?
PADemD
(4,482 posts)8. Not Mars, Robots n/t