China's Economy and the Future of American Fear

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http://www.theatlantic.com/international/archive/2012/09/chinas-economy-and-the-future-of-american-fear/262970/



Earlier this week, President Obama and Mitt Romney took turns needling China in front of large Ohio crowds. The two campaigns are running back-to-back television ads in the state, each trying to out-bluster the other on being "tough" on China. As our own Molly Ball writes, the attacks work -- largely because they appeal to middle-American concerns over outsourcing and competition.

Both men might want to pull their punches while they can. Although China is still the world's workshop, rising wages means that many companies are beginning to shift their operations to even lower-cost environments like Vietnam, Cambodia, and other areas where labor is plentiful -- and cheap. Foxconn, the technology contractor with a Western reputation for draconian workplace practices, plans to invest $12 billion in new Brazilian factories.

Beyond the increasing price of labor, recent changes to Chinese tax law have cut back on incentives to foreign investors, even as Vietnam has begun to respond in the opposite fashion. This has led one Taiwanese company to consider relocating:

'Wang, of JoyFly Technology, says he has just returned from a research trip to Vietnam, where he found that factory land in the south could be leased for 30 percent less than in China's Pearl River Delta, the export hub close to Hong Kong. "Of course, Vietnam's roads are nowhere near as good as China's and there are often power cuts," he admits.'

If the current trends continue -- and together with the prospect of a long-term slowing of China's economy, people like Wang will only become more common -- it's not hard to imagine a world where the big, bad country that stole America's jobs is no longer China. Instead, it'll be wherever those Chinese jobs went: Mexico, Brazil, Thailand, even Poland.

[fasttense]

1. Nation hopping is the inevitable result of that stupid globalization idea.

Corporations jumping from country to country trying to outrun the inevitable rise in labor costs as citizens' social awareness catch up with their economic exploitation. As one country eliminates child labor, corporations move their factories to another country that has yet to value a childhood. When that country's citizens realize how abusive corporate factories are to their babies, the corporations finds another place to squeeze out labor for a pittance.

Eventually corporate entities will have used up every corner of the globe.

[jsr]

2. It's about the race to the bottom sponsored by corporate vultures