Tuesday, June 8, 2010

So Your thought that China was your outsourcing solution? Think Again!

Excerpt from the Toronto Star of June 8, 2010.

Suddenly, strikes are surging across China as poorly paid workers — the engine of China’s economic miracle — are demanding a bigger share of the enormous wealth the country is earning from its booming export-driven economy.

Last week much of the country’s attention focused on a strike at a Japanese-owned Honda factory in southern China — for which Chinese authorities allowed rare and open reporting. Workers there won a 24 per cent pay hike.

Foxconn responded with a 30 per cent wage increase – and announced a further 70 per cent Monday. But few in China heard about the clash in Pingdingshan — or more than 15 other strikes that spilled into the streets of China in May.

Crothall, whose organization tracks labour issues inside China, confirms that China is experiencing a noticeable surge in strikes.

“Coming out of the economic downturn last year, workers were probably more willing to bide their time and not rock the boat,” he observes. “But now they’re seeing the economy booming again and workers who are paid low wages are asking questions and demanding better compensation.”

My Comments:

SO if anyone thinks that China is a safe and secure haven for cheap products. It might have been in the past but think again. People cannot be exploited all the time. The tide is changing in China and other far eastern countries. The west by moving manufacturing jobs to east virtually killed the’ goose that lays the golden egg’. Well the goose is now starving to death but not quite dead yet. Unemployment in the west was the result of moving our manufacturing jobs to the east but it was the west and North America in particular that gave the east and China in particular the boost of kiss of life. Now the west can no longer afford to buy from itself let alone the east, so both parties suffer and that is why China has to stimulate her own economy to take up the slack, but that cost money and who is going to pay for it. Yes the likes of Honda and Foxconn and eventually all the other manufacturers. Eventually the surviving companies will have to move their operations back to the west and start to rebuild or revive and re-stimulate the ‘goose’ so as to start laying some golden eggs by providing satisfying and rewarding manufacturing jobs again. But time is running out. The goose is dying and needs immediate attention.