chinese factory workers strike for more money

[wayno]

Workers on strike at a Chinese factory owned by the world's largest maker of athletic shoes have rejected management's latest offer in an ongoing labour dispute that is crimping production for brands such as Nike and adidas.

The on-off work stoppage at Yue Yuen Industrial's massive factory complex in southern China, which employs more than 40,000 workers, has stretched into the second week as both sides have failed to reach an agreement.

http://www.nzherald.co.nz/business/news ... d=11243027

I'm just wondering, if this will be a more common trend in the future? will you have to pay more for asian produced goods as workers demand more money? the article mentions a shortfall in migrant workers.
Chinas one child policy is eventually going to leave it short of labour in the coming years. if they can't cover the labour shortage from immigrants and other countries can't pick up production for the same low prices, then what will that mean for the price of outdoor gear. and will it enable factories in western nations to start competing with asian factories eventually?

[Giddy_up]

I think it has to come wayno, Chinas population is just becoming more demanding and they will continue to need more of everything to feed their appetite. Thin end of the wedge, I would say.

I am amazed that the Govt hasn't stepped in and crushed it with force by now though.....

[wayno]

govt may be nervous about reacting because its such a big event involving so many people and its in the international press.

[GPSGuided]

The Chinese economy is changing too, like all past Asian countries. From cheap manufacturing towards more tech focused. Manufacturing will move to the next cheapest location and it won't be long before we'll see African products. Irrespective, there's still a long way to go before Chinese wages becomes uncompetitive on the world stage. Just a little less margin for the companies in the meantime. Given they have 1.3B in population, those numbers are still tiny in their eyes. Just not so by the numbers we are used to. A completely different sense of scale.

[wayno]

yes i've noticed in recent years, a range of items i buy from well known brands previously would have been associated with a country like china now made in a range of asian countries and less made in china...

[GPSGuided]

They are now putting men and women into space and landing on the moon. The technology transfer and economic flow on effect will be similar to the benefits of the space race in the US. Profits will be made on products with higher tech content and less on rubber thongs and T shirts. Note how Chinese companies already owns Volvo, Thinkpad etc, the transformation has already started. With a success hungry generation coming up, innovation and competition will be fierce.

The big differentiator there is that they have a growing and huge internal consumer market. They can sustain a self contained eco-system. Similar may be said about India but not quite comparable from an infrastructure point of view.

[Giddy_up]

There is no doubt that wealth is being shifted from more traditional countries. This is going to create huge economies in what have been traditionally poorer nations by capita. The unification of Asia will make everything that has happened in industry to date, pale into insignificance and it will happen in our lifetime. Huge business opportunities will exist for people willing to take on and manage the risk early.

[wayno]

perhaps we will end up making cheap goods for china.....

[Giddy_up]

perhaps we will end up making cheap goods for china.....

Its possible wayno, there has been a huge upward shift in levels of heavy industry in the U.S through their rust belt. This was the area that witnessed the U.S version of the industrial revolution and just slowly got shut down on the back of cheaper imports. Maybe the pendulum is starting to swing back the other way, as it must one day.

It would be costing Nike a pretty penny in lost production thats for sure. Two weeks is a long time to not have 40,000 people doing something.

[GPSGuided]

perhaps we will end up making cheap goods for china.....

Won't happen. Whilst they can be short of workers along the developed coastal manufacturing belt, the vast majority of migrant workers are from the inland provinces (hence the reason for the shortage as life got better at those inland provinces) and the inland rural population will continue to provide an almost inexhaustable supply of hand power. It's just a matter of relocating the factories. Not an issue if the target market is domestic. The manpower resource in a 1.3B population is not something us in the sparsely populated Western world are familiar with. We can continue to sell our minerals, agricultural produce, holiday destination and knowledge until they exceed our knowledge base. Cutting down CSIRO and tertiary funding won't help us maintaining that lead.

[Giddy_up]

perhaps we will end up making cheap goods for china.....

the inland rural population will continue to provide an almost inexhaustable supply of hand power.

Not sure I agree GPS. China has a 1 child policy and if strictly adhered to, will yield them a population of 200 million by the end of the century. Thats only 80 odd years away and in the scheme of things, not that long.

[wayno]

china have relaxed the one child policy, cant remember the exact details, from memory its people who sole children from single child families are allowed to have two kids ?
but i've spoken to chinese and the single child rule has been relaxed for a long time for farming families. and its hard to enforce in remote areas...
i believe theres still supposed to be issues around manpower shortages, it will take a few years before the change in policy will catch up. the current generation coming into working age are still from the one child policy and it will be that way for quite a few years to come

[GPSGuided]

Not sure I agree GPS. China has a 1 child policy and if strictly adhered to, will yield them a population of 200 million by the end of the century. Thats only 80 odd years away and in the scheme of things, not that long.

Nothing beats on the ground data. Fact is, 1 child policy is a fully calculated and planned policy and is not applied uniformly across China. There are lots of exceptions to accommodate special circumstances and doesn't apply to most minority ethnic groups. I understand also that they have just started to withdraw from the policy in major cities. In other words, it's all calculated and planned. Fact is, whilst there will be an aging population there, it's all dialled in for sustainability, irrespective of what China bashing media cares to want us to believe. They actually know what they are doing economically.

[wayno]

i doubt they entirely do know what they are doing economically, they've been on a policy of spend up big time and they are over stretching even their own economy, they have new empty cities that have remained empty for years.... they are banking on increases in exports, but that can't go on forever

[GPSGuided]

I think it's again an issue of scale. In the big scheme of things from their perspective, they have full control and can dial in the growth and other parameters. Of course, the specific faults that get reported are all astronomical numbers to us. I'd have far less confidence in their economy if they have an India like democracy. That'd induce chaos.

Irrespective, I would not worry about outdoor gears losing China as a manufacturing base. Economic natural selection will always find a suitable replacement. The only worry I have is a tanked Aussie economy where we could no longer afford those goods. Going back to 50c to the USD would be disastrous!

[Gadgetgeek]

Some manufacturing is coming back to western countries, as the economy of scale doesn't apply as much. I recall reading an article about GE and how they were able to improve profit margin in a few appliances by bringing the manufacturing back into the US as they could get better quality control, faster updates to parts and techniques, and lower lead time for shipping and such. Improvements could be prototyped and put into production within days, instead of months.

I think we'll see certain categories of manufacturing come back, especially anything that can be customized, or produced on a boutique sort of level. Like the UL world is seeing. Stuff like shoes will probably start to move to africa, or possibly poorer european countries that still have infrastructure, like spain and greece. I think political stability will have more to do with where manufacturing goes than just the dollars side of things. I get the feeling that China might get unstable in the next 20 years or so. Lots of factors colliding very slowly. Aging population, very poor male-female ratio, new world wants with old world expectations of behavior. Something is going to break.

[GPSGuided]

I have less fear of all those factors than the geopolitical clashes b/n the major powers. US doesn't want a united and powerful China and will does its bit to stir things up. In the meantime I feel sorry for Ukraine, a country with incredible agricultural and technological wealth. Going down the drain for the next 10 years. Let's not let us get caught as pawns in these games.

[Giddy_up]

Going back to 50c to the USD would be disastrous!

We won't see 50 cents, but I'm sure that there would be a lot of industry in Australia that would disagree that a lower Aussie dollar would be disastrous.

[GPSGuided]

Going back to 50c to the USD would be disastrous!

We won't see 50 cents, but I'm sure that there would be a lot of industry in Australia that would disagree that a lower Aussie dollar would be disastrous.

That earlier comment was obviously directed towards the original theme of purchasing outdoor gears. Yet again, with the loss of local car production and ever increasing purchase of imported products, even those who make money off a lower AUD would need to significantly increase their expenditure. Fx fluctuation is where wealth is made or lost big time. Not good.

[Giddy_up]

Local car production has been subsidised by tax payers for decades and Australia can't get rich trading FX that's for sure. We will just have to holiday at home and spend our hard earned locally and buy our bushwalking equipment the same way. Isn't that better for all concerned here in Australia.

[GPSGuided]

...buy our bushwalking equipment the same way. Isn't that better for all concerned here in Australia.

No objection there. But I suspect it will cause heartaches amongst many current members here. LOL