Will inflation slay the Chinese dragon?

[fedsron2us]

Source: London Times

China’s CPI leapt from 4.4% in June to 5.6% in July � modest numbers by global standards, but worrying for a regime obsessed by social stability. Many people in China do not believe the figures. In 1989, anger over inflation helped to set off mass demonstrations. Last year it was discontent about corruption and the widening gap between rich and poor that sped the ascent of President Hu Jintao and led to the eclipse of the party’s “Shanghai Faction”, identified with China’s growth-at-all-costs policies.

The Communist leadership has taken a firm step to the left in the past year. Wages have risen about 15%. A tough new labour law strengthened the official trade unions. Foreign-owned firms, including the steadfastly antiunion bosses at Wal-Mart, must recognise it. Taxes have been equalised between foreign and domestic firms.

Policy planners in Beijing have also taken direct aim at low-cost, labour-intensive exports � the sectors that add little value and where the worst abuses occur, such as the recent scandals that led to millions of toys being recalled by Mattel and other big brands. The ambition is to go up the value chain, shedding downmarket products while making televisions, computers and � eventually � cars for export.

On July 1, the Chinese government phased out subsidies on about a third of all exports, targeting textiles, toys and other bargain-basement products.

Read more: http://business.timesonline.co.uk/tol/business/economics/article2367252.ece

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Looks as though Chinese labor is not going to be cheap for much longer.

Interesting how the Murdoch owned Times regards workers getting a decent wage as being 'leftist'.

What with the credit crunch and everything it looks as though the western corporate parasites are in for a tough time. Cry me a river.

[jgraz]

1. Favorite quote of the article: "'Made in China' is gradually losing its competitive edge"

Gee, that tends to happen when you poison your customers. :eyes:

[Champion Jack]

2. "'Made in China' is gradually losing its competitive edge" yeah

Not only does it mean poorly made shit, but, if you're not careful, it will kill you!

[stillcool]

3. I wonder how long...

it will take to bring back manufacturing in this country? I buy very little as I'm fortunate to be able to make blankets, clothes, rugs...lots of stuff for far less money than I could buy it...even from China. Main Street is looking pretty sad these days..there are quite a few thrift/consignment/antique stores, restaurants and bars...and that's about it. Most of the things I use to sew, knit, etc., are bought from yard sales and thrift stores...the only other place I can buy it is Walmart, or on the net....which more times than not is the same thing as buying from a thrift store.

[onewholaughsatfools]

4. do we all forget

China is a communist country. They control their people the can kill them if they wish, why do you think they have the largest military in the world, Now the real question is, WHY DO YOU HELP THEM BE THE WEALTHEST COUNTRY IN THE WORLD...by purchasing the china made trash........ point that finger at yourself each and every time you buy a product from China.........

[stillcool]

6. China has the largest military in the world?

http://www.globalsecurity.org/military/world/spending.htm

World Wide Military Expenditures

Country Military expenditures - dollar figure Budget Period
World $950 billion 2004 est.
Rest-of-World $500 billion 2004 est.
United States $466 billion FY04 actual
China $65.0 billion 2004
http://www.globalsecurity.org/military/world/spending.htm

[Massachusetts]

10. Long live the US Empire

Hail Caesar!

[NYC]

5. Phased out subsidies. Chinese prices will go up.

...On July 1, the Chinese government phased out subsidies on about a third of all exports, targeting textiles, toys and other bargain-basement products...

Perhaps, we'll be able to manufacture products here again.

[FreakinDJ]

7. We sold off the equipment

we would have to retool

[NYC]

13. Retool we must.

At least we ought to. Time for some investment in the U.S. economy.

[entanglement]

8. I welcome gains made by the Chinese working class in their struggle for human & economic rights

No doubt the Maoists were forced to allow these concessions to avert a more general uprising against them as in 1989.

[cornermouse]

9. I think we could be in the early stages of a trade war as well.

First there's a lot of speculation about the possibility of China (possibly China even saying?) they were going to dump the dollar in favor of other currency. Then we find out the chinese imports are poisoning us and our pets. Yesterday China was accusing us of sending them microscopic worms in wood packaging and substandard vitamins.

[JNelson6563]

11. When they start making cars in big numbers,

enough to sell to the world's markets, it's all over but the cryin'.

Julie

[RUMMYisFROSTED]

12. The Chinto?

The Chinese Pinto? :shrug: