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Re: <nettime> The Art of Sweatshops [4x]
John on Wed, 11 Aug 2004 11:45:13 +0200 (CEST)

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Re: <nettime> The Art of Sweatshops [4x]

Look for China to implode medium term:

Signs of overheating are unmistakable: an explosion of credit; rampant
overcapacity (nine tenths of manufacturing goods are in oversupply); and
the return of inflation (2.8% in the first quarter of 2004). President Hu
Jintao, and his prime minister, Wen Jiabao, have assured financial markets
that 'resolute' measures are being taken to rein in excessive investment
and engineer a 'soft landing' for the economy but, so far, with no
discernible impact.

"China is in a situation of severe over-investment", noted Credit Suisse
First Boston's Hong Kong office. What's more, this investment is chasing
diminishing returns. According to The Economist, China currently needs $4
of investment to generate each additional dollar of annual output,
compared with $2-3 in the 1980s and 1990s.

Ominously, China displays many features of Asia's 'tiger economies' in the
period leading up to their spectacular crash in the summer and autumn of
1997. Last year, fixed asset investment accounted for an unprecedented 47%
of China's GDP, with the construction sector accounting for half this
figure. By comparison, in 1992-96 fixed asset investment in South Korea,
Thailand and Indonesia averaged 40% of GDP, still extremely high by
international standards. In the same period, Indonesia, Malaysia, Thailand
and the Philippines experienced money and credit growth rates of 25-30% a
year. China's money supply grew by 20% last year, and bank credit (new
loans) by 56%.

< snip >

16 million manufacturing jobs have actually disappeared since 1995, as
Chinese industry has upgraded its technology. Shanghai Baosteel Group, for
example, the world's sixth largest steel producer, cut its workforce to
100,000 from 176,000 five years ago.

< snip >

While average per capita incomes have risen rapidly in the last 20 years,
the gap between rich and poor is now the biggest in the world. This has
been a largely urban boom, with average incomes in the cities six times
those of rural ones.

from: http://www.socialismtoday.org/84/china.html


The workers got screwed, ala the Soviet Union.  Of course China is not
exactly the same, but they are headed for trouble as the realization that
sacrifices for socialism have not delivered a better life AND NOW the
country must swing back towards a market economy to keep investments of
hard cash flowing.

I think manufacturing jobs flow there because labor is so cheap.  But it
is cheap in India as well and India does not have the historical baggage
China does.  I think baring a nuclear exchange with Pak., India will
continue to be the main recipient of outsourced tech jobs.

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