Globalization works in the long run

[Puppycow]

Toy Prices Rise as China Wages Increase

A Western buyer at the Canton trade fair protested against higher prices by wearing a T-shirt emblazoned with “Too Expensive” in Chinese. That generated little sympathy from toy seller Clara Zhang.

“We all laughed so hard,” said Zhang, 26, sales manager for Nanjing Happy Toy Co., maker of teddy bears and stuffed ducks. “Then we said, ‘Sorry, sir, you probably need to pay even more.’”

Worker salaries have almost doubled in the past year to 2,000 yuan ($308) per month in factories in Guangdong province, the nation’s manufacturing hub, according to toymakers attending the fair.
Oil and Cotton

Wages for the millions of migrant workers running China’s factories soared 40 percent in 2010, Tao said earlier this year. Guangdong province raised minimum wages this year, with workers in Guangzhou city earning at least 1,300 yuan ($200) a month as of March 1, the state-run Guangzhou Daily newspaper said.

“Wages are increasing day by day,” Jimmy Tang, general manager for Chenghai Junfa Toys Co. in Shantou, said while sitting on a pile of plastic water guns and telescopes at the toy fair. “If you don’t do it, people go somewhere else.”

Eventually, maybe our grandkids can work in a factory making toys for Chinese kids.

 

[MarkyX]

Eventually, maybe our grandkids can work in a factory making toys for Chinese kids.

Don't quote me on this, but a few months ago I went to a seminar and one of the top investment managers at CIBC (not going to give a name) was there. I asked him what would be a good idea for a retail investor to get into. His response was that I should be looking for American manufacturers that are producing products for China, because there is a middle class developing there and they want foreign quality goods.

He couldn't name any specifics, because that would be violating our regulation rules, but he is allowed to give a general specific.

Point is, it's already happening, and it seems the United States is one of the first people to realize this. Sadly I don't think I've heard of Canadian companies doing this yet.

 

[timhau]

Aren't Chinese companies already looking to outsource some of their manufacturing work to places that are less expensive than China's industrial provinces? Those places include countries like Vietnam and Egypt (or at least, Egypt prior to the Arab Spring).

 

[The Don]

Anecdotally, some IT functions are being "onshored" here in the UK because, all factors considered it's cheaper to do the work in the North of England or Northern Ireland (in the examples I've recently encountered) that offshoring to India.

Although the dayrate may be lower in India, additional costs and the difficulties of distance working has meant that general offshoring is being replaced by offshoring of specific skills