The End of Cheap China | Social Finance Matters (investing and business models for good) | Scoop.it
TRAVEL by ferry from Hong Kong to Shenzhen, in one of the regions that makes China the workshop of the world, and an enormous billboard greets you: “Time is Money, Efficiency is Life”.

 

China’s economic growth has been explosive. Many people predicting the economic future have used current growth percentages and trajectories to extrapolate into the future. The question that we should ask is: how long can China continue to grow at this current pace? Many signs are pointing to the difficulty that China will have in sustaining these levels of growth. The era of China being the world’s go-to source for cheap manufacturing is dependent on current geographic variables, variables that the economic growth is altering.

 

Manufacturing prices are rising, especially in the coastal provinces where factories have usually been agglomerated (also known as Special Economic Zones --SEZs). The more success that China has in manufacturing, land prices will go up, environmental and safety standards will increase. Collectively, this will mean that labor costs for the factories will also be increasing as Chinese workers are not only producing but also becoming consumers of manufactured goods with an increased standard of living. This is changing the spatial patterns of employment in China and will impact Chinese manufacturing’s global influence. Sarah Bednarz recommends this article as “a needed update on the new international division of labor (NIDL).”  For more on the topic, see Shaun Rein's book, "The End of Cheap China: Economic and Cultural Trends that will Disrupt the World."


Via Seth Dixon