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I was reading the news yesterday and stumbled across a surprising fact. Considering all the media accounts that I have been seeing accusing China of 'stealing US jobs', it was particularly surprising.

Evidently, China's total manufacturing employment is going down at a rate that, although not as high as here, is comparable.. (ie. its not that much lower)

The same as here, China's manufacturing workforce is declining, although also like the US, their service job workforce is increasing.

China lost 15 million manufacturing jobs between 1995 and 2002. (During that period, the US lost 2 million, which is still a LOT, because the size of the total workforce here is much smaller)

What are the reasons China is losing these jobs? The same as here, increased costs of labor relative to even lower wage countries and also rapid improvements in manufacturing automation are making the cost of even China's cheap labor higher in relation to the cost of more machines.

See, for example,

Japanese robots enter daily life
http://www.usatoday.com/...

and

Robots set to overhaul service industry, jobs
http://www.csmonitor.com/...

Will service jobs take up the slack here, and in China?

Honestly, its hard to say, but I think the indications are no, that there, just like here, service jobs are less skilled jobs that tend to be much more interchangeable.

So, they tend to pay less and often, obviously, they don't offer job security because they don't take much skill.

A bigger factor may simply be increased use of automation in many different capacities.

Obviously, especially since the Internet and especially, mobile computing has expanded, the opportunities for automation to enter many new fields is expanding by leaps and bounds.

Even jobs previously thought safe from automation, like delivery and agricultural jobs, are now threatened in many developed countries where cheap labor is not plentiful.

In a continuous process that has been going on for well over a century,  in manufacturing, business automation of many kinds is making huge strides in helping businesses shed workers at all levels.

Its also creating new jobs, my guess is that, at te beginning of each new technology, at least one or two new jobs for every five or ten old jobs that are replaced.

(This number declines as the commodity is commodified)

There are many new classes of technical jobs, small in number, designing, installing and maintaining automation systems in various ways. Those jobs pay well, but they are also a rapidly moving target. The product cycle from idea, to custom implementation (i.e. profitable) to commodity (cheap, mass produced) is very fast. The money for small business good but in that time, a business needs to establish a niche and market it well, because that window of time is short, it can be as short as five to seven years.

What does all this mean? For both Americans, Chinese, and really, all the other manufacturing workers globally, things are changing quickly. Its not enough to simply be good, or cheap. Jobs are getting harder and harder to find and keep. There is powerful downward pressure on wages in many markets because of this. (although in China, because they have been so low historically, wages are going up, but they are still very, very low compared to the US, Japan and Europe, in particular)

Looking ten or fifteen years into the future is hard under these circumstances. The era of the 'job' MAY be ending, to be replaced by the era of the contract or task.

We will need to adjust our expectations and behaviors accordingly as we enter this post-industrial landscape..

Perhaps its time to try to save more, spend less, and push for a new look at the kind of safety nets that other developed countries have? Perhaps a shorter work week might buy us some time, also.

To preserve jobs here in the US, a focus on quality has helped us in the past, and will continue to help, but we also need a renewed focus on the importance of requiring health and safety standards in other countries we trade with to be higher. Otherwise, it is a grossly unequal situation. US companies that are involved in foreign countries should stop pushing for further relaxations or eliminations of their safety and pollution standards.

I don't know a way to force them to do this but its essential to slowing the disappearance of human done jobs here in the US.

Originally posted to Andiamo on Mon Mar 03, 2008 at 06:24 AM PST.

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Comment Preferences

  •  reading where? (3+ / 0-)
    Recommended by:
    Heiuan, DocGonzo, DWG
  •  I don't think protectionism (2+ / 0-)
    Recommended by:
    burrow owl, koNko

    will work.  Shortening the work week simply won't work either.  If you try to divvy up the work to protect people, you just make it harder for companies to hire and fire.

    And then they will just leave for another state or country where costs are cheaper.

    There's no stopping the flow of capital required to run  businesses.  

    The only solution is to make the cost of business low, and educate people so they can make an effective work force.  They have to be well educated and flexible.

    If they aren't they will only be useful in their job for a short time, and then they will be unemployable.

    Eat your lunch, or somebody else will.

    •  Automation... (3+ / 0-)
      Recommended by:
      PsychoSavannah, koNko, ellend818

      I was trying to make the point that automation is eliminating jobs GLOBALLY. Which has little, really, to do with 'protectionism' or 'free trade'.

      As people become less essential to business, (except as CONSUMERS, which is the Achilles heel of all this, i.e where will the customers come from..) jobs as we know them becomes scarcer, and business becomes more profitable and individual workers, on paper, SEEM more productive, because the employers need less people (and put more technology in play) for a given output.

      This is the way of the future.. In 100 or even 50 years, factories will be huge, people-less places, with robots, perhaps even tended by other robots.

      We will probably have a welfare state, becuse honestly, why hire peope when machines will do almost everything better, faster and cheaper. And also, they dont complain or ask for raises or act bitter over doing "stupid, boring" work.

      •  I agree we will have a lot (1+ / 0-)
        Recommended by:
        koNko

        more automation and the use of robots.  

        Why do you see that we SEEM more productive?  In what way is that not actually more productive?

        I disagree though that we will become a welfare state.  Those people who are intelligent, flexible workers will be hired at a premium.  They will get paid a LOT more in a global economy than a replaceable service industry worker.  

        Those people will have more money, and a lot more political power.  Why would they want to turn it into a welfare state?

        I guess I see the next 50 years as a political battle between the political "haves" who are quite capable, and the political "have nots" who don't have the skills to compete.  

        We as a nation don't seem willing to admit the obvious. Those jobs that left are gone for good.  The rest of the world is catching up and they are willing to do the same jobs more cheaply.  There is no bringing those jobs back.

        The only way for our nation to prosper it compete on the advantages we have (democracy, transportation infrastructure, flexible and educated workers, capital liquidity, mobility of workers, and most importantly the ingenuity of our people).

        A welfare state may take care of our poorest people the best, but it is the single greatest way to disable our advantages of the nation as a whole.

        It is a conundrum.  

      •  A true story about people and automation. (1+ / 0-)
        Recommended by:
        PsychoSavannah

        I'm Chinese so you can ask me any question about here.

        First some personal history. I had the change to live in the USA and Gernany for several years atending University and working, Then I returned home.

        Several years ago, 1994 I think, a French subsidiary of a major German company was qalifying our company to make parts. A team of managers visted our factory for a week to audit our operation and I was assigned to handle the project. At that time, we had no sophisticated automation or streamlined assmebly lines, just a workshop of machines and lots of manual labor. Our compnay was good with a strong quality concept, but we really couldn't meet thier standards and they made (really) a report of several hundred pages with lists of improvements to be made. I had to tell them, we understand, but we can't afford everything you want so can you please just give us a chance on something simple and we'll try our best. One guy, the Quality Manager Mr. F offered to meet us halfway, to let us try to for one year to make some samples for testing while improving our procedures to meet the mininmum he could accept. My boss agreed and told me my job was to get it done because he knew it was our only chance and would be good for the company. And so we did and almost two years later, we finally got some business. Mr F visited us many times and we became friends.

        Then I was invited to visit thier factory in France to get some trianing and understand their process. They had (have) this very great modern factory with much auotmation and almost no manual labor. Naturally, Mr F was proud and also quite generous to explain things in detial including their management systems. A great experience.

        Then the night before I left we joined for dinner. We went to the train, used the smart card to pay our fare, and borded the automatic train. No workers at all. I remarked on how amazing it was.

        He replied, "Don't you think it's a little rediculous? Sometimes I think we love machines too much and people not enough." And I noticed his eyes were red so I turned away. Later at dinner he said he hoped I learned a lot and could help my company to modernize and grow, and to make the right decisions.

        It was the best lesson. Now we have newer very modern factories and the old one is much nicer but still a little "Old", like the peole working there. I'm most proud f it because, desipte the technical disadvantages, it has the most skillful and knowledgeable people. One guy working there is almost 70, but the company still lets him becuase he's a great teacher of young engineers. This guy only has primary school educations, but he knows everything about his work and runs his department like a Swiss watch.

        I do think it's a mistake to go too far. In fact, Takahiro Fujimoto, the inventor of the Toyota Production System, the most renowned thinker on lean manufacturing, totally agrees.

        He said: "Machines are nothing without people." It's true. They don't drink beer and don't share your problems.

        When harmonious relationships dissolve, respect and devotion arise; when a nation falls to chaos, loyalty and patriotism are born - Daodejing (paraphrased)

        by koNko on Mon Mar 03, 2008 at 08:51:53 AM PST

        [ Parent ]

    •  I believe more can be done. (0+ / 0-)

      Actually, the flow of capital is a serious prolem for many countries becuase it avoids taxation and become predatory, no less do for poor countiresvproviding the labor/resources than wealthy ones losing the capital beyond it's borders,

      The pedulum has sawing too far in the direction of multinational corporations and needs to swing back toward national interests, not any particular nation, but nations un general verses enterprises. The system is totally out of balance.

      That's the importiance of political activism.

      When harmonious relationships dissolve, respect and devotion arise; when a nation falls to chaos, loyalty and patriotism are born - Daodejing (paraphrased)

      by koNko on Mon Mar 03, 2008 at 10:00:41 AM PST

      [ Parent ]

      •  What is your thinking on this? (1+ / 0-)
        Recommended by:
        koNko

        Why shouldn't capital be able to flow to wherever it wants to?

        •  The problem is ... (0+ / 0-)

          Tax avoidance, predatory investment and shelters that take money out of the financial systems of investing and host countries.

          I'm at work now and don't have the time to elaborate in detial, but its a big enough problem that many countries are undertaking legal reforms to counter-act thre practrices, particularly tax avoidance.

          Consider that, when a country/city/etc offers incentives like tax holidays, investment credits, etc to attract investment, they are trading away resources and assests of society in the hope to secure employment and return on the resources. By various means (usually shel corporations and transfer pricing) corporstions dilute the value of products locally, take profits in countries not producing but having the lowest available tax rates, then resell the products into markets providing the capital, selling the products at a lower margine to minimize profits tax.

          Another example would be companines negotiating predatory deals with tax holidays, then closing factories at the expiration of the term and moving on to the next sucker. This strategy is commonly used in poor countries to get cheep labor and no or minimal taxation. Take ther case of athletic shoes:

          Japan
          Korea
          China
          Thailand
          Vietnam
          Cambodia

          ... comming to a poorer country next time the tax breaks expire.

          In primcipal, capital markets should be free, in practice, it can facillitate robbery and the victims are always the poorist nations.

          When harmonious relationships dissolve, respect and devotion arise; when a nation falls to chaos, loyalty and patriotism are born - Daodejing (paraphrased)

          by koNko on Mon Mar 03, 2008 at 10:01:34 PM PST

          [ Parent ]

          •  Thank you for your response (0+ / 0-)

            I think it is not only poor countries that suffer.  Similar things happen in the United States.

            An example is spare and service parts for cars.  Companies in Japan will manufacture them, sell them to the shell company, and claim no profit.  The shell company then resells it to another shell company in the United States, who sells the parts here for high dollar, but low margin.

            There was recently an article in the Atlantic Monthly how the Chinese government skims off all the trade between the US and China because American customers pay in dollars, and Chinese vendors turn it over to their central bank, and get paid in rimbibi (not sure how to spell that).

            It seems to me there would be an enormous opportunity for some other company to act as an intermediary and do that trade instead of the Chinese government.

            Any thoughts on that?

  •  I think that China has a fair chance (1+ / 0-)
    Recommended by:
    PaulVA

    of being a trainwreck.

    No rule of law
    Demographic pyramid that looks first world (they just reversed 1 child policy apparently, or looking at it?)
    800M people still on $2/day, seeing vast disparities in wealth
    An envt that is destroyed
    And yes, sadly even poorer countries out there to take their jobs

    •  Huh? (3+ / 0-)

      "No rule of law" ?

      Try telling that to the tens of thousands of people they execute each year!

      I agree with you on the spirit of what you are trying to say but I think that ultimately, the real longterm enemy of the continuation of the 20th century job concept is automation and in that we are all in the same boat (humanity, that is)

      :o

      China is the manufacturing haven right now because its so big and so cheap.. and because they have very few if any effective controls on things like pollution and safety.. (this is partly because their provincial governments are INCREDIBLY corrupt, not to say ours arent, but we are not even close in level of corruption.)

      But eventually, silicon, not meat, will do those jobs and then they will have the same problems as we do.. except worse.

      Dont forget, they almost had a revolution in 1989. Dissatisfaction ie VERY high there. The government will be in power only as long as te standard of living keeps rising. When that stops, things wll get ugly fast. They know it which is why they are SO repressive.

      Also, time goes by very quickly as technology is concerned.. these changes are happening rapidly.

  •  Trouble for india and china (1+ / 0-)
    Recommended by:
    koNko

    People bang on about india and china, but in the future, both these countries are going to have huge problems when industries, like robotics, which start to imping on the unskilled work sector

    •  In the future? (0+ / 0-)

      No, in the present.

      When harmonious relationships dissolve, respect and devotion arise; when a nation falls to chaos, loyalty and patriotism are born - Daodejing (paraphrased)

      by koNko on Mon Mar 03, 2008 at 08:53:56 AM PST

      [ Parent ]

      •  It would be great if. (warning, LONG) (0+ / 0-)

        our next (US) president could figure out a way to gently nudge both US (and our other trading partners, including the Chinese) towards some international standards on things like worker safety, freedom to organize and negotiate, workplace toxic exposures, etc. But don't get me wrong, I don't want to see anyone else scapegoated for the part of our problems that are our fault. (most of them.. unfortunately)

        And, as I said in my post, a lot of what is happening is happening everywhere. We are all in the same boat.

        As I'm sure we all know, in the past (much more than now) US companies had very much the patronizing colonial attitude when they set up in foreign countries. Especially China. Now I think everyone has realized that in most cases that is incredibly inappropriate and we are moving rapidly towards seeing each others workers as equals.

        So, I think its appropriate for Americans to be asking the question "Why aren't they paid more"?
        And other similar questions. also, of course, US companies that set up anywhere should not be able to get away with maintaining dangerous situations when they know better. Thats just common sense. Treat other people as you would want to be treated yourself.

        :o

        I'm an American and I support keeping as many jobs as we can in the US but I also support international trade relationships, when they are conducted with integrity.

        I think its just as heartbreaking when bad things happen to Chinese workers as when they happen to Americans.  

        We are much more alike than many people realize.

        Actually, I think Chinese are sort of the Americans of Asia, very smart, and also very proud of their country and its 4000 year long history. They are hopefully coming out of a long bad spell and they feel as if they deserve what they have worked so long to get. The end of the imperial period in China, the beginnings of a (unfortunately very corrupt again) republic and then Mao and then the Deng era have been like traversing 500 years in just two or three generations. No wonder there are stresses..

        I really hope that both of us can handle the changes that are coming too. Nobody is discussing them.

        China needs MUCH more of a safety net and we in the US really too need much more of one now.

        The era of 'the job' is really ending, probably for good, and it is very scary. We are in denial.

        We have had really, many years of relative prosperity here in the US. Nobody wants to do what it would take to extend that for a while but we really have to force them to do things to make that happen. I really don't know what the solution is. You can't turn back the clock and we really wouldn't want to. We all have to ride the wave, and its going to be a big one.

        I hope the reaction of our (the US) leaders won't be a stupid one. That could happen very easily. What we should do is try to take a longer view, more like the Europeans, but that way of thinking seems alien to many of our leaders.

        In China, I also think they could learn a lot from Europe as far as safety nets go. Try to cushion people somehow from the worst of it, and focus on educating the younger generation so that they can benefit from the landscape as it changes. Really, its the same here. People will not be able to work into their seventies and eighties. How will they eat?

        I hope we can accept it when we realize that so many of our assumptions are wrong. And deal with it.

        In China some of the Mao years were really nightmarish. Everything, almost, since Maos death has been an improvement. People for the most part have enough to eat.

        But the government's position is shakier, I think than most Americans realize. Its telling that they still have the terrible system they set up in the bad days to prevent desperate, starving poor people from going into the cities and its a sword hanging over the country. Its like a caste system.

        For all their problems, at least its not like then. (the late 50s and early 60s were the worst)

        But it could get bad again, if we just were to cut off trade arbitrarily. But the US could secure a position of respect from the Chinese people if we did ut some pressure on them IN THE RIGHT WAY to change. That would be a win win for all of us and it might help stop the loss of US jobs as well.

        KoNko, as you can see, I actually would love to chat about China.. but I would not want to get you in trouble, either.

        I was actually one of the (not very many) Americans who demonstrated (here) in June 1989, to try to support the students and prevent the crackdown..

        I have a lot to say..

        anyway, enough of that.. You obviously know much more about this stuff than I do. I am just speculating.

        I found an interesting free online book on computers and society a few days ago.. Ive been reading it..

        maybe some of you might want to check it out.. it gives some of the history of the issue..

        Trapped in the Net:
        The Unanticipated Consequences of Computerization
        by Gene I. Rochlin

        Princeton University Press and copyrighted, © 1997

        (but free to read online)

        http://press.princeton.edu/...

  •  I was talking to a manager who said (0+ / 0-)

    he's expecting to see a major drain on jobs in the Chinese economy?

    Why? Simple. China's tied to a corpse (the US... no offence meant). Oil is getting more and more expensive (mostly due to the dollar's inflation, but also due to dwindling supply), while China has to keep the Yuan's purchasing power artificially low in order to be able to export, particularly into the US, which means they can ill-afford oil when compared to, say, Europe.

    Furthermore, rising oil prices equal rising transport prices, which make it more attractive to establish all but the most labour-intensive production processes (which benefit the most from inexpensive labour) closer to home. Throw in a bit of consumer nationalism (preferring to buy homemade products) into the mix and China could head into a world of pain.

    Omne malum nascens facile opprimitur, inveteratum fit plerumque robustius. - Cicero

    by Dauphin on Mon Mar 03, 2008 at 06:59:46 AM PST

    •  They are doing everything they can to transition (5+ / 0-)

      to a more balanced kind of production..
      Which is badly impacting US companies because they are stealing US products and technologies (for example, counterfeiting Cisco routers, etc.) and they are very hard to stop for us.

      The whole web of trust and quality/branding infrastructure that we have built up in the West is very new for them. This cuts both ways in that you often see high quality Chinese products that could and should have brand names attached to them, that are completely anonymous.

      Personally, I likeChinese people and I think they are working very hard and deserve more in the world, in some senses. They have had a terrible history.

      But they do NOT deserve our corporations falling all over each other to move jobs from here to there, often just taking whole (admittedly, often obsolete) factories apart and shipping them there.
      Instead, they should set up automated factories here. It may not save the low skilled jobs but it would create a smaller number of high skilled jobs that would remain in the US.

      And avoid training and providing the infrastructure for competitors gratis!

      Why we don't see that is insane..

      •  Were you on the same planes... (2+ / 0-)
        Recommended by:
        PsychoSavannah, koNko

        as I was going to China, because you seem to have the same hands-on experience. I'm not sure I agree with you about the Chinese setting up companies here as the Japanese have done. After WW2 there was a necessary Japanese-American cooperation that created that level of comfort. I've been going to China for almost 20 years but I don't see that happening that quickly although I have a number of Chinese friends.

        I also like the Chinese. That may be because women have  a more integrated role than they do in Japan.

      •  There's great resistance to that. (0+ / 0-)

        I think it's difficult for Americans to accept Chinese companines in the USA. The only big one is Haier, which bought Maytag.

        Andaimo is correct, the paternal relationship of the US toward Japan made reverse investment more acceptable where Chinese companies are viewed as outsiders.

        Ironically, it makes sense because any Chinese company operating in the US would face great pressure from all directions to do well But overcoming the cutural barriers is very difficult and the resentment by displaced American workers is likely to be more strong than what Japanese companies faced.

        Lots of companines have been started by Chinese in the US, but that's different than a foreign company comming in. i'm sure it will happen, but it won't be easy.

        When harmonious relationships dissolve, respect and devotion arise; when a nation falls to chaos, loyalty and patriotism are born - Daodejing (paraphrased)

        by koNko on Mon Mar 03, 2008 at 09:52:29 AM PST

        [ Parent ]

        •  Correction. (0+ / 0-)

          I should say "ellend818 is correct" (about Japansese).

          When harmonious relationships dissolve, respect and devotion arise; when a nation falls to chaos, loyalty and patriotism are born - Daodejing (paraphrased)

          by koNko on Mon Mar 03, 2008 at 10:03:47 AM PST

          [ Parent ]

  •  We've been loosing jobs for years. (0+ / 0-)

    Basically, there are 4 manjor factors:

    (1) The dissolution of bankrupt state run enterprises.

    (2) Automation and other forms of increased indusrial efficiency.

    (3) A transition from labor-intensive farming, mining and the like to more productive practices or changes in technology.

    (4) Migration of labor-intensive jobs to lower cost countries (India, Bangledesh, Vietnam, Cambodia, etc).

    Entering the WTO has lost more jobs in China than it created. The implications are:

    (a) Growing income disparity, greater even then in the USA.

    (b) Permenant unemployed or underemployed class, mainly people over 40.

    (c) Increased dependance of famillies on employed members; young people working in factory jobs typically send at least half their pay home to support poor family members.

    (d) Growth of migrant workers, mainly displaced farmers or miners, who are employed in the construction industry of other heavy labor low wage jobs, leading a hand to mouth exisitance. These are the most disadvantaged people in our society.

    In fact, the government is now undertaking various reforms to address these problems particularly in the araa of income redistribution by tax relief in poor areas and higher taxes in urban areas, labor law reform, and improving our megar social benifits.

    But frankly, it's a really big problem and most people live a hard life. The Chinese middle class is only about 20% of the population.

    Some of these are global problems - China is not special. Some of them are the natural product of economic and social change.

    It's not so difficult for us to understand the problems faced by US people these days. We share many problems. So does the world. It's not new.

    VOTE. YOU CAN. YES YOU CAN.

    When harmonious relationships dissolve, respect and devotion arise; when a nation falls to chaos, loyalty and patriotism are born - Daodejing (paraphrased)

    by koNko on Mon Mar 03, 2008 at 07:53:03 AM PST

    •  Big Middle (1+ / 0-)
      Recommended by:
      koNko

      I think that by "we" you mean "China".

      But frankly, it's a really big problem and most people live a hard life. The Chinese middle class is only about 20% of the population.

      20% of China's population is larger than all of the US. Though its' "middle" is above a lowest class that's much poorer than the classes below America's middle class, and the Chinese upper class is much smaller than the US' upper classes.

      In a lot of ways, talking about "China" monolithically, especially as some large parts of China have really developed so much while other large parts not at all is like talking about "the Americas". The Americas south of the Rio Grande have been exploited for the growth of some large parts of the US (and relatively small parts of Canada) for centuries, and will continue to be. In the US our border is drawn along the top of Mexico, while in China the border is drawn around the entire country (which wasn't nearly always a single country). The comparisons are hard to derive conclusions from when they're not really parallels.

      "When the going gets weird, the weird turn pro." - HST

      by DocGonzo on Mon Mar 03, 2008 at 10:19:36 AM PST

      [ Parent ]

      •  In numbers of people, yes. (0+ / 0-)

        In dollars, no. The income of a "middle-class" Chinese is comparatively lower than the USA. I think that a familly making the equivelent of about US 800-100 per month would be solidly middle clas here, in the US the mean would be above that.

        It's absolutely true that wealth is concentrated in the costal mega cities and this is a difficult problem to solve (will take many years). The current national political doctorine of "Creating a Harmonious Society" is largely based on the principles of:

        - redirecting public revenue to poor areas at the expense of rich areas to moderate income disparity and provide for infrastructure development where needed.

        - improve social benifits (including education, medical, etc) for the poor, who have nearly none.

        - protecting the environment and building renuaable energy insfrastructure.

        I suppose if you Goggle that, wou could get some information.

        Or you can check my recent diary about some environmental legislation, there a lot of links and discussion in the diary.

        The think about China is it's huge population. When you change a law or policy, it can effect the lives of a billion for better or worse.

        When harmonious relationships dissolve, respect and devotion arise; when a nation falls to chaos, loyalty and patriotism are born - Daodejing (paraphrased)

        by koNko on Mon Mar 03, 2008 at 10:16:15 PM PST

        [ Parent ]

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