There Isn't A 'Next China'

[liberal N proud]

This is a somewhat interesting if not strange look at outsourcing and the China effect...


Prices of products made in China are rising, and, in the short term, this is bad news for consumers and businesses that buy products made in China (read: everyone). As a result, a lot of people in the manufacturing world are asking, "Where's the 'Next China?'"

The answer to this question is vitally important, but not particularly uplifting. Unfortunately, there is no "Next China." Sourcing executives would do well to spread the word — and fast.

The Rise of China

China is not the first country to dominate manufacturing. (In reverse chronological order, think: South Korea, Taiwan, Japan, America, and England). However, the speed of China's rise — and the scope of its manufacturing dominance — has been staggering. There have been three ingredients to China's success: pro-trade government policy, solid infrastructure, and a huge, underemployed labor pool.

It is this last ingredient — China's huge labor pool — that has kept manufacturing costs so low for so long. Typically, you would expect wages to rise as more and more companies start manufacturing in a particular region and demand for labor increases. However, in the case of China, there were so many people that needed jobs that it seemed companies would always be able to find more people that were willing to work for very little.

But, as we now realize, it only seemed that way.

Rising Prices in China

In the last few months, we have seen the landscape change very quickly in China. In the wake of several suicides, high tech powerhouse Foxconn raised wages dramatically. In response to multiple strikes, Honda also offered workers significant pay increases. While the speed of change is breathtaking, the fact that things are changing is not a surprise to most sourcing executives, who have seen the writing on the wall for years.


http://www.mbtmag.com/Content.aspx?id=637

[Ozymanithrax]

1. No more globalist policy of finding the next country with

a ready supply of cheap labor.

That will change things.

[Tierra_y_Libertad]

2. China is now opening a vast new market for it's goods....China.

While we've been bailing out banks, they've been building infrastructure and buying up overseas mineral rights, oil futures, and real estate. And, now, slowly, they are raising wages so that the Chinese people can buy goods that say "Made in China".

[Skittles]

3. maybe Chinese folk will demand better quality goods from China

instead of the garbage we are used to