THAT little “Made in China” tag can be found on much of what we own — clothes, toys, shoes, electronics, food products, kitchenware, jewellery.
For decades, the country has been seen as the “factory” of the world, with its massive supply of inexpensive manufacturing labour.
But as the country’s economy expands at breakneck speed, the omnipresent stamp may soon become a thing of the past.
Chinese factory workers are now getting paid more than ever. According to market research firm Euromonitor, the average hourly wages hit $3.60 last year. This may not sound like much, but it represents a 64 per cent growth from 2011.
For comparison’s sake, that’s more than five times the hourly manufacturing wage in India, and puts China on par with countries like South Africa and Portugal.
It means President Donald Trump’s repeated threat to go after China for its cheap exports to boost US manufacturing may be a bit outdated.
An increase in wages means an increase in costs for companies who trade with the rising superpower, which means China could start losing their jobs to other developing countries like Sri Lanka, where hourly factory wages are around 50 cents.
As we speak, southeast Asian countries like Cambodia and Myanmar are already moving towards displacing China’s role as the go-to location for cheap product building.
Bloomberg reports countries like Myanmar, Cambodia and Laos will eventually displace China’s title as the “world’s factory” within 10 to 15 years.
But according to Vox, the Chinese Communist Party is unlikely to intervene, as lowering the wages to improve competition would risk provoking social unrest.
It comes as companies are also investing in robots in efforts to automate as much as possible to offset labour costs, according to Jefferies analysts Sean Darby and Kenneth Chan.
China’s industrial robotics market became the world’s largest in 2013, and is continuing to grow.
Whether the country can and will rise to “superpower status” as expected is yet to be seen.
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