Cde Monomotapa wrote:For the West it is simple..radically change the labor laws that it makes business sense to hire a Westerner over a Sino or Mexicano. OTW, status quo will remain.
The attractiveness of China as an investment destination is not only based on their labour market but many other factors. Just last year alone the FDI's grew to $105B:
1. A member of WTO. Remember WTO's main objective is to liberalize international trade, complaints on China are fast trooping in & now or later they'll have to fully align with international trade traditions to survive.
2. Some go with the thought of the 1.5B internal market but realise with cheap labour disposable income is a fable among the Chinese thus they end up exporting & with their GDP not expected to continue growing at the pace it did the internal market will still be a pipe dream.
3. Corporate taxes at Special export zones being at around 12.5% to 15% & places like the US still at 35%, the place becomes damn attractive but the reality is with a growing economy so does standards of living also rise & thus more govt expenditure expectected making a rise in taxes inevitable.
4. Cheap labour with time will be over. With the growing inflation & a contracting global economy, its just but a matter of time.
5. The Chinese would rather have a weak USD for a reserve currency or any other currency rather than let their currency taste the international currency markets. They need their currency weak coz that's their bloodline.
6. You can never control a growing skilled labour market & citizenry for long. As they say it only takes a man to change an ideology. With the billionaires & millionaires China is churning out i see an 'Anna' coming out.
7. The increase in commodity & mineral prices will make them more vulnerable just like the US & depedence on oil, their's will be coal & gold.
8. Their aggressiveness towards showing their economic might will also be their downfall in more ways than one. They are purchasing sovereign debts left right & center, debts that might become pieces of paper. They should seek advice from the USSR, a war is normally not only about guns & bombs & you might win a battle against the west but not the war.
9. Their stringent rules on constitution of ownership of foreign businesses.
In more ways than one their strengths might easily turn out to curtail them.
'They say money cannot buy me happiness but when i compare when i had none and now, i'm happier' Kevin O'leary