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Now that their source of quick profits, is undergoing its own "rising tide" ... lifting all local boats ... what is a Multinational based in China to do?

Higher Standards of Living for the People's Republic of China -- means low, low profits for the Corporations that would rule that profit pyramid world ...


Bye-bye cheap, Chinese labor
by Kathleen E. McLaughlin, globalpost -- Nov 10, 2011

BEIJING, China — Factories in China’s manufacturing heartland are feeling the squeeze again, with minimum wages in Guangdong province set to rise by as much as 20 percent on Jan. 1 for the second time in less than a year.
[...]

In other words, the days of endless, cheap Chinese labor are limited. What that means for consumers in the United States and elsewhere is simple: Things are going to cost more, soon.
[...]

In Guangdong, where thousands of smaller factories have been driven out of business in recent years by higher costs, factory owners are protesting the newest planned mandatory wage hike. Yet labor groups say the move is necessary for workers to keep up with fast-paced inflation and move toward the government’s ultimate goal -- transitioning away from low-end manufacturing.


Here's the current minimum wage in that China Province, where factory owners are closing up shop, as the people are finally starting getting their "fair share":

List of minimum wages in People's Republic of China

Province / Municipality    Monthly ( Yuan ) Monthly ( US$ )

Guangdong     850 – 1300   $129.95 – 198.75
(* Excluding Shenzhen *)

The US$ column is based on the 20th April 2011 conversion rate of US$1 = RMB ¥6.52. The table is correct as of 20th April 2011.

assuming a 4.3, 40-hr weeks per month  (172 hrs per month)

translates to an approximate hourly rate

Hourly ( Yuan )  Hourly ( US$ )

4.94 - 7.55    $0.75 - $1.15


Woo hoo.  A buck a hour in wages, THAT is breaking the Multinational minimum wage bank?


China’s rising wages
by Cai Fang, CASS, EastAsiaForum -- Sept 5, 2011

[...]
Wage increases are likely to continue into the long term for two reasons: first, China’s working age population is about to stop growing very shortly, and, second, the government has committed to to reducing inequality. For example, the 12th Five-Year Plan targets an annual increase in the minimum wage level of no less than 13 per cent.
[...]

In terms of income distribution, the wage increase for migrant workers has led to a narrowing of the long-standing income gap between rural and urban areas.


Imagine that -- China's government is actual working to increase "income distribution" for its workers ...  ie. Economic Fairness.

No wonder the multinational merchants of greed, are starting to sweat it ...



Who will the Multinational corporations tap next, in their never ending quest for more, more, ever more profits?

... especially given the 5-Year Plan of China has spelled out their National goals in B&W ...

[12th Five-Year Plan targets an annual increase in the minimum wage level of no less than 13%.]

Analysis: China costs start to worry U.S. multinationals
by Nick Zieminski, Reuters -- Aug 12, 2011

NEW YORK (Reuters) - For years, low prices on China-sourced goods helped dampen inflation in the United States. Now China's efforts to boost domestic consumer spending, reducing reliance on exports, are leading to higher costs for multinationals that manufacture goods there.

Eventually, China could export its inflation.

Conglomerates ranging from Emerson Electric (EMR.N) to Honeywell International (HON.N) feel pressure on margins from double-digit wage increases in China. So have toymaker Mattel (MAT.O), fast-food chain Yum! Brands (YUM.N) and computer maker Dell (DELL.O), analysts and investors say.

They have plenty of options besides raising prices, such as embracing automation or moving to China's less-developed interior. Some companies relegate China costs to the category of minor headache; others point to long-term benefits from richer Chinese consumers.


Afterall it's such a hassle to pull up stakes and set up a new "sweat shop" somewhere else. There are new Translators to re-hire, new Officials to re-bribe, new Swiss Account transfer-links to set up ... What a hassle!

What are the Corporate Captains of Capital to do?

I suspect they can read the writing on that Great China Wall ... and that they may be looking at investing in Gold Futures, right about now ...


The impact of China’s 12th Five Year Plan
April 24, 2011
by Yongsheng Zhang, Senior Research Fellow at the Development Research Center of the State Council (DRC), PRC.

[...]
At the top of the new blueprint [the 12th Five Year Plan (FYP) (2011-2015)] is a commitment to transforming China’s development model from the current low-efficiency, high-growth model to a more balanced model that seeks to address a whole range of increasingly important concerns. The targets of the new model include economic growth, structural adjustment, social services development, carbon mitigation and environmental protection, and transparency and governance reforms.
[...]

New economic risks and imbalances are emerging beneath the surface of China’s high growth economy. Trade surpluses have resulted in huge foreign reserves, excess liquidity, high inflation pressure, and bubbles in the capital and property markets. High GDP growth has not brought about a proportionate increase in human well-being across society, and public services are facing supply bottlenecks. Regulation and monopolies have unbalanced industry, and while there is an oversupply in the manufacturing industry, there is a shortage of service sector providers, particularly in medicine, education, finance, and banking. Finally, there is now a huge and growing level of risk associated with local government debts.
[...]

Still, China has a long way to go to catch up to the Western world in terms of per capita GDP. Given its big economic size and its deep integration into the world economy, the 12th Five Year Plan is not just a domestic issue; it is an issue for the rest of the world as well.


Woo hoo!  China's Government is planning on going Green?

That's good news for an ever-warming planet.


Uh-oh, that's bad news for those "Regulatory Cheats" who make their living surfing through the wild-west flat-world domain of global poverty. How is a Corporate entity to make a killing anymore, using their 1-dimensional "tap and burn" mentality?

Those easy profits are all drying up ... they might actually have to go out and -- Gasp! -- "work for a living"  ... oh noes.

Nahh!  Not on a planet with 7 Billion people in it -- most of them desperate.  Just have to cut back on the luxury frills for a bit, and move on to the next global conquest ... courtesy of the military powers that be.


It's still possible to keep your established corporate exporting operations running, as long as you know what the going rates are, and are willing to pay for the best local talent.

2011 Greater China Salary Guide
Adecco -- 03-30-2011

2011 Adecco Greater China Salary Guide, which is collaborated with Adecco China and HK, is now available. [...]

The salary guide reflects the market trends across all industry sectors and is based on placements of candidates from all areas of the branch network and internal reference in Greater China region.

2011 Wages -- in China (RMB)  Monthly Salary

Warehouse Manager --  Degree/Diploma   8+ years   
15,000 - 25,000

Warehouse Asst Manager --  Degree/Diploma   5-8 years   
12,000 - 20,000

Warehouse Supervisor --  Diploma   3-5 years   
10,000 - 15,000

Warehouse Officer --  Diploma   1-2 years       
7,000 - 12,000


Since

1 Dollar = 6.35 Juans (RMB)   (today's exchange rate)

1 Juan (RMB) = 0.16 of a Dollar  

that experienced Warehouse Manager in China currently translates to:


2011 Wages -- in China (RMB convert to Dollars) Monthly Salary

Warehouse Manager --  Degree/Diploma   8+ years   
$2400 - $4000

Warehouse Asst Manager --  Degree/Diploma   5-8 years   
$1920 - $3200

Warehouse Supervisor --  Diploma   3-5 years   
$1600 - $2400

Warehouse Officer --  Diploma   1-2 years       
$1120 - $1920


Wow, if this keeps up, pretty soon the typical China worker, will be on a par with the typical American worker.  

Multinationals execs actually might have to move back to the US one of these days to find an over-supply of desperate workers willing to work for subsistence wages.  Now if only they could get Boehner to repatriate their billions in cheap-labor profits they have been busy raking in with all their globe trekking, much of the last decade -- a Low, Low Tax Rate like 5%, on their offshore loot, might coax them back home to re-invest, or so they keep saying.  Funny, how it didn't quite work out that way, the last time they got such a Repatriation deal.


Afterall, those sweat shop owners know when the free-ride gravy train is about come to an end ... it's their money afterall -- THAT's something they actually care about!  

World economy needs China to slow growth gradually
by Paul Wiseman, AP Economics Writer – Oct 31, 2011

[...]
China's explosive growth remains the envy of developed nations like the United States. It grew faster than any other major economy in the April-June quarter, according to The Associated Press' latest quarterly Global Economy Tracker. Only Argentina's much smaller economy matched China's 9.5 percent annual growth rate.

By contrast, the U.S. economy grew at a 1.3 percent rate in the April-June quarter, before expanding 2.5 percent in the July-September period.
[...]

China's central bank has raised interest rates five times since mid-2010 to try to shrink inflation. Even so, consumer prices jumped 6.2 percent from August 2010 to August 2011. [...]

At the heart of the problem is how China has stoked its expansion. It hasn't encouraged its consumers to drive the economy with their spending, as Americans do. Instead, it's juiced growth by pushing exports and investing in factories, roads, railways and real estate.

Such investments account for about half of China's gross domestic product, a broad gauge of economic activity. That is a wildly lopsided share that suggests China is investing in far more construction than it needs.


Now if only we could get the American Government to invest its own infrastructure and economic well-being of its citizens, as much as China has invested in theirs.

Then maybe, America could see that 9% GDP growth "problem" too ...

Of course that would require the Multinationals and their well-paid sales reps in U.S. Congress to all agree, that Keynesian Economics actually works.

Just look at China -- slowing down 9% growth, by raising workers standards of living is quite "the problem" to have.

America should be so lucky ...



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Comment Preferences

  •  Tip Jar (6+ / 0-)


    What is necessary to change a person is to change his awareness of himself.
    -- Maslow ...... my list.

    by jamess on Thu Nov 10, 2011 at 02:18:20 PM PST

  •  You're right about the multinationals (2+ / 0-)
    Recommended by:
    jamess, Gooserock

    I've noticed more things made in places like Vietnam, Malaysia, etc. If we can just hold out another 40 or 50 years eventually they'll have used up the cheap labor and allowed America to collapse far enough that the jobs will come back here. :P

    GOP 2012 -- Austerity is just around the corner!

    by ontheleftcoast on Thu Nov 10, 2011 at 02:29:49 PM PST

    •  It would seem that (1+ / 0-)
      Recommended by:
      ontheleftcoast

      Tax Policy incentives might make it more expensive to invest so heavily overseas.  Get them back sooner.

      The long term solution, is locally-owned, employee-owned businesses, of course.

      Let Corporations, go out of business,
      due to their own bloatedness ... and loss of quality.


      What is necessary to change a person is to change his awareness of himself.
      -- Maslow ...... my list.

      by jamess on Thu Nov 10, 2011 at 02:38:35 PM PST

      [ Parent ]

    •  My Competition's Been India-Pakistan. (3+ / 0-)
      Recommended by:
      ontheleftcoast, jamess, kurt

      A few years ago I was seeing labor quoted at a buck a week or so.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Thu Nov 10, 2011 at 03:20:32 PM PST

      [ Parent ]

  •  Good, Maybe They'll Soon Be Able to Balance (1+ / 0-)
    Recommended by:
    jamess

    the piece of shit bandsaw their low end manufacturing sent me.

    I asked the "manufacturer" which is the new spelling of "importer" if a particular part they sell works on their bandsaw and they said uhn, Idunno.

    I suppose for 10 grand I can get a made in USA industrial bandsaw 9 feet high to cut my little 1/4" thick strips of wood, that won't shake itself so bad it falls over.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Nov 10, 2011 at 03:19:12 PM PST

    •  they said (1+ / 0-)
      Recommended by:
      nchristine

      it would be cheap.

      They didn't say it would work.


      I love all these self-assembly, big boxed items,

      with instructions barely readable,

      and parts lists, sometimes missing,

      and then barely fit.


      guess where they are always made ...

      NOT in the U.S.A.


      thx Gooserock,

      stay safe, man.


      What is necessary to change a person is to change his awareness of himself.
      -- Maslow ...... my list.

      by jamess on Thu Nov 10, 2011 at 03:52:03 PM PST

      [ Parent ]

    •  Now that is scary. I would HATE to work with (1+ / 0-)
      Recommended by:
      jamess

      a band saw that threatens to mutilate me at any moment. Some things you can't go cheap on.

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