- Joined
- Jan 3, 2009
- Messages
- 2,605
- Points
- 0
Could pay raises threaten China's role as the 'world's factory'?
By Xing Zhao 2 July, 2010 CNN
Factory workers have gotten their way and been promised wage increases, but netizens debate whether this is good for China in the long run.
Even there is labor law workers still have to work over 12 hours a shift. The pay raise is the same, not real.
— Xingcheng Luochuan, Chinese netizen from Jiaxing
For the past three decades, China has been the world's factory, manufacturing goods consumed around the word. The “Made in China” miracle is built on that fact that China, until recently, has had very cheap labor. However, with the increasing labor unrest, a wave of pay raises have been announced, and although many are celebrating the labor victory, voices online wonder if this is what’s best for China in the long term.
Pay raise wave
Zhang Yansheng from the Development and Reform Commission's Economic Research Center tells the International Herald Tribune in an interview that a survey he carried out in the Guangzhou and Shenzhen area shows that GDP has been growing at over 10 percent for years while the cost of labor has hardly climbed at all. “That is obviously not right,” says Zhang.
Intrigued by Foxconn's series of suicides, Zhang's group announced that it will offer its workers performance-based pay raises that would increase some workers' wages up to RMB 2,000 per month.
Seeing this shift from two major companies in its region, the Shenzhen government raised its minimum wage to RMB 1,100. Eleven other provinces and cities adjusted standards for minimum wages between 10 and 20 percent, including in Beijing.
Chinese factories: Do they stay or do they go?
“Such pay raise is unreasonable,” says Huang Mingzhi, head of the Taiwan Chamber of Commerce in Shenzhen to QQ.com. “We cannot afford and will not follow. With this trend, most of Taiwanese electronic factories on the mainland will leave within the next three to five years.” Foxconn has already announced plans to move thier factories more inland and north.
With rumors about major foreign companies considering moving their factories from China to other countries in Latin America and Asia due to China's increased labor costs, head of China's Investment Commission Zhang Yahan argues that factories will remain in mainland China since wages are only one small part of overall production costs. “It is more possible that factories will be moved from the coast to central or western China,” says Zhang. “And that is also what the Chinese government encourages them to do.”
About the change of China's status as the world's factory, netizen Suiyi Rufeng from Fuzhou says, “Pay raises might threaten China's place as world's factory and even hurt people's pockets, but in the long run we shouldn't want China to always be the world's chimney.”
Read more: Could pay raises threaten China's role as the 'world's factory'? | CNNGo.com http://www.cnngo.com/shanghai/life/...e-netizen-happy-about-it-999174#ixzz0t7z6vH6x
.
By Xing Zhao 2 July, 2010 CNN
Factory workers have gotten their way and been promised wage increases, but netizens debate whether this is good for China in the long run.
Even there is labor law workers still have to work over 12 hours a shift. The pay raise is the same, not real.
— Xingcheng Luochuan, Chinese netizen from Jiaxing
For the past three decades, China has been the world's factory, manufacturing goods consumed around the word. The “Made in China” miracle is built on that fact that China, until recently, has had very cheap labor. However, with the increasing labor unrest, a wave of pay raises have been announced, and although many are celebrating the labor victory, voices online wonder if this is what’s best for China in the long term.
Pay raise wave
Zhang Yansheng from the Development and Reform Commission's Economic Research Center tells the International Herald Tribune in an interview that a survey he carried out in the Guangzhou and Shenzhen area shows that GDP has been growing at over 10 percent for years while the cost of labor has hardly climbed at all. “That is obviously not right,” says Zhang.
Intrigued by Foxconn's series of suicides, Zhang's group announced that it will offer its workers performance-based pay raises that would increase some workers' wages up to RMB 2,000 per month.
Seeing this shift from two major companies in its region, the Shenzhen government raised its minimum wage to RMB 1,100. Eleven other provinces and cities adjusted standards for minimum wages between 10 and 20 percent, including in Beijing.
Chinese factories: Do they stay or do they go?
“Such pay raise is unreasonable,” says Huang Mingzhi, head of the Taiwan Chamber of Commerce in Shenzhen to QQ.com. “We cannot afford and will not follow. With this trend, most of Taiwanese electronic factories on the mainland will leave within the next three to five years.” Foxconn has already announced plans to move thier factories more inland and north.
With rumors about major foreign companies considering moving their factories from China to other countries in Latin America and Asia due to China's increased labor costs, head of China's Investment Commission Zhang Yahan argues that factories will remain in mainland China since wages are only one small part of overall production costs. “It is more possible that factories will be moved from the coast to central or western China,” says Zhang. “And that is also what the Chinese government encourages them to do.”
About the change of China's status as the world's factory, netizen Suiyi Rufeng from Fuzhou says, “Pay raises might threaten China's place as world's factory and even hurt people's pockets, but in the long run we shouldn't want China to always be the world's chimney.”
Read more: Could pay raises threaten China's role as the 'world's factory'? | CNNGo.com http://www.cnngo.com/shanghai/life/...e-netizen-happy-about-it-999174#ixzz0t7z6vH6x
.
