Certainly, but I'm quite sure the costs are already higher than those in developing nations. Unless China makes a significant turn and expand their domestic market, their growth will falter significantly. If they do, they loose on their cost advantage. Finding balance is always tricky.
Actually, the costs in China are still lower than in a number of other developing nations; and those who do have lower costs don't have anywhere near the infrastructure and capability that China does. Keep in mind, China is simultaneously a first world and a third world nation...in the major urban areas like Beijing and Shanghai, it has all the trappings of a first-world nation; but head out West, and you have areas that are still very much third-world (I myself run a charity in an area of the Himalayas where many people don't even have electricity or running water, and living is much the same as it was 100 years ago). So while costs
are increasing in some parts of China, they are still very very low in other parts. Its still gonna' be quite some time before that changes.
I have no problem with your disagreement...simply point out any other country that can provide the same massive infrastructure, at the same or a lower cost
Okay, though the gap is much narrower if you include several other countries in the mix - like Indonesia, Vietnam and Philliphines, with a combined population in excess of 350 million. A fraction of that of China, certainly, but also a fairly significant competitor.
You're "throwing together" countries that are separated by oceans, and with little or no political cooperation. Different business laws, and different systems of government. Philippines is a struggling democracy with tons of corruption; Indonesia is a Muslim democracy that's dealing with major internal ethnic conflict; and Vietnam is a Communist nation that lags behind China by at least a decade. And put together, they don't even represent 1/3 of China's capacity.
I'm sorry, but you're really grasping at straws to try to make such a comparison. Ask
any multinational if they prefer to have all their industry in one country that can handle it all...or stretched out over several widely separated nations, all with different rules and procedures...and I can pretty easily predict what their choice will be.
If Chinese economy hits a serious snag, as it's bound to soon as you say, that's no longer an advantage.
Ya' know, I came to China in 1993, when it was still very much a struggling economy, and capitalism had just barely begun to rear its head. A great many multinationals came into China during that time...and lost money. For over a decade, in fact, they bled. Why? Because they knew that once the market matured, they'd have access to one of the largest markets in the world, and the companies who had been there from the beginning, developing connections and reputations, would be the ones who'd best capitalize on that.
And the vast majority of foreign business leaders that I've talked with here feel the same way I do. They all expect a period of economic instability, and fully anticipate the possibility of economic hardship during that period. But, like me, they also believe that on the other side of that, there'll be a new, stronger China...with even more money to spend on their products. And they wanna' be here for that.
Besides which, there's the other side of the equation...if/when an economic crisis hits, it may damage the domestic market, but it will also mean that labor costs will go down dramatically. Thus, the loss of profits from domestic sales will be compensated for by increased profits from lower manufacturing costs for exported goods.
Yes, China has several advantages, and their centralized government works partially to it's advantage as well. Corruption, favoritism, etc aside, it works towards one goal: to have a huge economy.
Unfortunately it's also a drawback. In doing so, they serious neglected an amicable foreign policy, resorting to petty thuggery to get what they want, inflated bubbles of gargantuan proportions and left a large proportion of population out of the loop.
Foreign companies quite frankly don't care about if "a large proportion of the population is left out of the loop". And for all the problems that exist in doing business in China (and there
are a lot of them), again I'd challenge you to propose any other country that can offer comparable costs, scale, and potential domestic market.
I'm not arguing that China's some sort of paradise (far from it); only that, from a business perspective, there's no other countries currently out there who can compete. China may not be an ideal choice...but try finding a better one.
Looking at it, how would you comment on a comparison between Imperial Germany in 1910 and China now? Certainly there are several significant differances - imperial Germany being much more kind to it's people for instance - but important parallels exist, agreed?
I'm sorry...but I see almost no points of comparison.
I see China as a dinosaur of late 19th to early 20th century, a fascist state that is oriented towards "establishing it's place under the Sun", much like Germany. In order to do so they need a powerful economy, which became just about their sole goal in the past 30 or so years.
Fascist? You
are aware that Communism and Fascism are at
polar opposites from each other on the political spectrum? While China's certainly no longer anything resembling a pure Communist system, I'd hardly see it as having moved to the opposite extreme of fascism. Quite the opposite, China today is an aggressively capitalistic economy.
I'm sorry, but at this point your arguments seem to be taking a rather big detour from anything that I've seen or experienced in China. Comparisons of modern China to fascist Germany under Hitler seem absolutely ludicrous to me...if you want to continue to make such a comparison, please state some concrete comparisons, rather than simply throwing around (terribly inaccurate and misused) labels like "fascist".
