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Cheap Chinese labour:

end of an era?

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Cheap Chinese labour:

end of an era? What do we know about it?

A typical day of a chinese worker

Scramble! Recent riots

Lewisian turning point

Data analysis

Have we reached it?

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What do we know about it?

Chinese products everywhere and in all areas of life

Chinese 'quality' - associations

Are their products necessarily of bad quality?

iPhone, Foxconn (Motherboards)

Own brands: Lenovo (former IBM), China Mobile, Bank of China, Air China,

Great Wall Motor

No-name products

Wages

1 March 2004 first minimum wage law

~ 150$ / month ~ 29000HUF

0.4-0.7$ / hour

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A typical day of a chinese worker

Work

Work

Work

Work

Work

Work

Work

Work

W O R KW O R K

24/724/7

W O R KW O R K

24/724/7

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A typical day of a chinese worker

Workers are underpaid for overtime work.

No annual leave, maternity leave or marriage leave. Workers are not paid for sick

leave.

No evaluations of occupational hazards. Protective equipment is not adequately

provided.

Overtime work totals 300 hours during peak seasons.

Sometimes, workers only get one day off in a month.

Draconian punishments

No trade union or other institutions

that represent workers rights.

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Let's start a riot

Sure. Just make sure you are not employed by a Chinese company.

A Chinese employee of Foxconn Technology Group jumped from a building to his

death Tuesday, state-run media said, in the 10th suicide this year at the

world's largest contract maker of electronics, such as the iPod, Dell computers

and Nokia phones.

Foxconn's massive plant employs more than 300,000 people. It is the size of a city,

it might be inevitable.

Cases:

missing iPhone interrogation

21 year old worker after night shift

Honda: better working conditions and pay rise

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Lewisian turning point

Developing countries' industrial wages start to rise, if a point is reached, when

labour has to be drained from the local tasks (eg: farming).

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So, have we reached it?

Chinese labour is still pretty cheap by Western standards.

GDP per capita incomes in China are a tiny fraction of those Western World,

it is almost impossible to argue that the era of cheap Chinese labour is overit is almost impossible to argue that the era of cheap Chinese labour is over.

China's domestic markets are not to be forgotten either.

Causes of a payrise:

inflation

soaring prices

frozen wages

severe downward pressure after the great crisis in 2008

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Sources

http://www.cbsnews.com/8301-503543_162-20006402-503543.html - China Seeing Dawn of a Labor Movement?

http://thenextweb.com/apple/2010/02/27/apple-child-labor-china-history-sketchy-manufacturing/ - Apple Used Child Labor In China A History Of Sketchy

Manufacturing

http://www.chinalaborwatch.org/investigations/2010_08_10/index.php - An investigation of suppliers of dollar general

http://www.msnbc.msn.com/id/37436341/ - China is finding out even cheap labor has limits

http://www.cbsnews.com/stories/2010/05/25/tech/main6518193.shtml - Another Suicide at China Electronics Plant

http://www.foxbusiness.com/story/markets/industries/industrials/signs-growing-chinese-labor-movement/ - Signs of A Growing Chinese Labor Movement

http://www.businessweek.com/magazine/content/04_50/b3912051_mz011.htm - Just How Cheap is Chinese Labor?

http://www.economist.com/economics/by-invitation/questions/era_cheap_chinese_labour_over - Is the era of cheap Chinese labour over?

http://www.indexmundi.com/china/#Economy Statistical Data about China's Economy

http://en.wikipedia.org/wiki/Arthur_Lewis_(economist)#Lewisian_Turning_Point - Lewisian Turning Point

http://www.lowyinterpreter.org/post/2010/06/15/Sir-Arthur-Lewis-and-Chinas-labour-unrest.aspx - What's behind China's labour unrest?

http://www.cbsnews.com/8301-503543_162-20006402-503543.htmlhttp://thenextweb.com/apple/2010/02/27/apple-child-labor-china-history-sketchy-manufacturing/http://thenextweb.com/apple/2010/02/27/apple-child-labor-china-history-sketchy-manufacturing/http://www.chinalaborwatch.org/investigations/2010_08_10/index.phphttp://www.msnbc.msn.com/id/37436341/http://www.cbsnews.com/stories/2010/05/25/tech/main6518193.shtmlhttp://www.foxbusiness.com/story/markets/industries/industrials/signs-growing-chinese-labor-movement/http://www.foxbusiness.com/story/markets/industries/industrials/signs-growing-chinese-labor-movement/http://www.businessweek.com/magazine/content/04_50/b3912051_mz011.htmhttp://www.economist.com/economics/by-invitation/questions/era_cheap_chinese_labour_overhttp://www.economist.com/economics/by-invitation/questions/era_cheap_chinese_labour_overhttp://www.indexmundi.com/china/%22%20%5Cl%20%22conomyhttp://www.indexmundi.com/china/%22%20%5Cl%20%22conomyhttp://en.wikipedia.org/wiki/Arthur_Lewis_(economist)%22%20%5Cl%20%22ewisian_Turning_Pointhttp://en.wikipedia.org/wiki/Arthur_Lewis_(economist)%22%20%5Cl%20%22ewisian_Turning_Pointhttp://www.lowyinterpreter.org/post/2010/06/15/Sir-Arthur-Lewis-and-Chinas-labour-unrest.aspxhttp://www.lowyinterpreter.org/post/2010/06/15/Sir-Arthur-Lewis-and-Chinas-labour-unrest.aspxhttp://en.wikipedia.org/wiki/Arthur_Lewis_(economist)%22%20%5Cl%20%22ewisian_Turning_Pointhttp://www.indexmundi.com/china/%22%20%5Cl%20%22conomyhttp://www.economist.com/economics/by-invitation/questions/era_cheap_chinese_labour_overhttp://www.businessweek.com/magazine/content/04_50/b3912051_mz011.htmhttp://www.foxbusiness.com/story/markets/industries/industrials/signs-growing-chinese-labor-movement/http://www.cbsnews.com/stories/2010/05/25/tech/main6518193.shtmlhttp://www.msnbc.msn.com/id/37436341/http://www.chinalaborwatch.org/investigations/2010_08_10/index.phphttp://thenextweb.com/apple/2010/02/27/apple-child-labor-china-history-sketchy-manufacturing/http://www.cbsnews.com/8301-503543_162-20006402-503543.html

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Thank you for your attention!