Wednesday, January 16, 2013
The future of China as World's factory
So interesting things are happening in China. This article talks about how China is loosing its edge as companies seem to be relocating to other Asian countries. The article says, "The shift—illustrated in weakened foreign investment in China—has pluses and minuses for an economy key to global growth." What are some of the pluses and minuses can you think of for both China and the neighboring countries?
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This article caught my attention. On the one hand, the article starts with paradigm shifts. China is modifying its industries. The rising of its wages does not discourage the private investment in consume. Beyond this consequence, China is looking for a new space in the world. China is not any more a cheap country for making cheap and poor quality of products. Nowadays, China has become an appropriate place for private investment in technology. Maybe, this is a very positive statement. However, we only have to see the statistics in the technology sector for realizing of the China´s advance. On the other hand, the articles explains that the investment has fallen. This has been caused by the raising in the cost of the factor and not by the political government. This is a key because it shows that when people are doing business, they do not care of the political situation. They care of the their own benefits that it.
ReplyDeleteThis article really surprised me because I never thought that China would be losing its edge in world's factory floor. For a long time, China has no competitors in producing products at the lowest price. Now, China can't keep relying on a low-cost competitive advantage because they are facing with many competitors from Southeast Asia.Consumers prefer products with higher quality instead of low quality China products. China companies are now concerning about adding value to upgrade the products. It is a good thing because now consumers all around the world would not be worried about using China products.
ReplyDeleteI think this is a great part of China's continuing growth. Workers are starting to enjoy higher standards of living, and now workers in other countries can start making their way out of poverty too. I agree with Priscila's characterization of this as a "paradigm shift". It's going to be key for China to strengthen its intellectual property laws so that their economy can start to shift from manufacturing to innovation.
ReplyDeleteThis article is not surprising at all. There are many places in the world where labor is cheaper than in China. China was the center of attraction for all the manufacturers when the rate of globalization started to go up rapidly because it had cheap labor in huge quantity. With increasing wage and development in China, other countries with cheaper labor will attract investors as businesses always look to minimize their cost.
ReplyDeleteThis will be a big advantage to the other developing South Asian countries. Furthermore, the rising competition will also help to increase the quality of the products.