Fewer Workers and Rising Wages Equals More Spending

August 18, 2010

The Economist published an interesting piece about the changing economic landscape in China.   If you read between the lines, it appears that the Wall Street crash that shook the world in 2008 and is still generating pain may have been a catalyst for changes benefiting the Chinese worker.

In 2008, 670 thousand factories closed their doors in China putting 25 million migrant laborers out of work, but wages went up 17.3% by the end of 2009, which makes no sense.

When I was still teaching and California’s money was tight, schools saw funds cut, jobs lost and salaries frozen, which is still happening now because of the 2008 crash.

A shrinking workforce in China happened to coincide with the 2008 global economic meltdown.  The International Business Times reports that due to China’s longtime one-child, family planning policy, the population of 20 to 39 year-old workers, the backbone of China’s labor force, has dropped 22% in the last 10 years while older workers are staying in the villages.

These changes encouraged China’s central government to shift support from businesses to workers by encouraging the provinces to raise the minimum wage while keeping a low profile during labor unrest.

Some industries moved inland where wages are lower but ended up selling their products to local Chinese consumers, which caused other foreign companies to build factories inland—not for the cheap labor, but to get closer to those local consumers.

According to The Economist, “As pay goes up, the country’s domestic market will become more lucrative. Foreign firms that came for the workers will stay for the shoppers. China will become more of a workshop for itself and less of one for the world.” 

In today’s harsh global economy, China may have the only growing consumer market. In fact, this may generate jobs in America.  To understand, you’ll have to read both pieces yourself.

See Hitting Endless Home Runs

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

In the National Interest

August 17, 2010

It seems America might be helping Vietnam become a nuclear power.

The Hindu reports that China is protesting what might be an American “double standard”.  A leading Chinese strategic expert on nuclear policy and disarmament told The Hindu that any move to allow Vietnam, which neighbors China, to enrich its own uranium would be “double standards” on the part of the U.S.…

This latest hot-button issue took off soon after the Wall Street Journal reported that the US was talking with Vietnam about sharing nuclear fuel and technologies that would include Vietnam enriching its own fuel, which is used in nuclear weapons.

Why would the U.S. play this dangerous game?  The answer may be found from Margi Mason of the Associated Press.  She writes that the U.S. has a “national interest” in seeing the claims resolved in the South China Sea.

So, what is in the national interest of the US to help Vietnam?  The answer is oil and to keep our military close to China while gaining allies. 

The US population needs the gasoline and diesel made from oil to drive to work and shop. The huge oil companies need to sell that oil, gasoline and diesel so they can pay wages to their employees while making profits. America’s national interest is everything to do with jobs and the economy.

However, China is not happy because what the US is doing in Vietnam is not in China’s national interest.

Discover The Real Police State

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

The WHO’s War on Tobacco

August 17, 2010

Gillian Wong for the Associated Press wrote about a battle over tobacco heating up in China—pun intended. China also signed the global anti-tobacco treaty backed by the World Heath Organization to cut tobacco use.

However, in China, tobacco companies sponsor public schools.  Something similar happened in the US when Coke and Pepsi installed vending machines in the public schools where students could feed their sugar cravings and grow obese at the same time.

In fact, at Nogales High School in La Puente, California where I taught for years, I was told one morning by the truck driver filling the vending machines in the halls that more than two-thousand “cases” of Coke were selling a week there. 

The schools district made a nice profit from its share. Now, it seems selling sodas at school “may” be against the law.

Maybe the US was China’s role model, but the Chinese have gone one-step further by (according to Gillian Wong) taking elementary students on school sponsored tours of cigarette factories where the slogans say, “Talent stems from hard work, tobacco helps you become accomplished.”

Where’s Qin Shi Huangdi when China needs him most? After all, when the first emperor wanted to get something done, nothing stopped him. He unified China, finished building The Great Wall, mandated one written language and had the scholars who complained dig their own graves before setting them on fire and throwing dirt on the remains.

On the other hand, if China did nothing, the One-Child policy could be abolished pleasing Christians around the world.

Then China could encourage smoking to reduce the population. Estimates say that one in three young men will die early from tobacco use. Within fifty years, China’s population problems would be solved while making a profit.

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

Doing the Environment the Western Corporate Way

August 15, 2010

Michael Wines wrote in the Environmental section of The New York Times about China downplaying environmental disasters.  However, according to his conclusion, China is improving.

The problem is that his piece is missing balance, which isn’t surprising since the “New York Times” is famous for reporting bad news about China, but to be fair, most of the Western media is guilty of that.

Maybe Wines’ piece was published so most Americans, who are famous for having short memories, might forget the Gulf of Mexico oil spill now that it is capped.

How long did it take the public to learn that BP didn’t install the back-up safety system just to save a little money?

There’s also a movie, Erin Brockovich (based on a true story), about an unemployed mother who becomes a legal assistant for a lawyer and almost single-handedly brings down a California power company accused of polluting a city’s water supply and trying to hide what was happening.

Let’s not forget the Niger Delta—that is if you’ve ever heard of it. CNN reported a spill there in 2006, but we should be hearing about the Niger Delta daily since there have been 7,000 oil spills there adding up to more than 13 million barrels of oil.

What about Bhopal, India where seven men held accountable for the 1984 Union Carbide pesticide plant accident are still out on bail. Twenty-five years later, no one has spent time in jail and 500 thousand residents continue to suffer from birth defects, blindness, early menopause and a host of other horrid illnesses.

Next up on our pollution list is the Lago Agrio in the Ecuadorian rainforest in 1964, where eighteen-billion gallons of toxic run-off were discovered in the river. Texaco defended this by saying it was, “within industry standards.” 

Maybe it is time to change the standards?

The list is long: the Love Canal in the United States, Minamata Bay in 1956 Japan, Probo Koala in the Ivory Coast, Ok Tedi in Papua New Guinea, Esperance in West Australia, Exxon-Valdez, 3 Mile Island in Middleton PA, Chernobyl in Russia, Savesco in Italy, and the Sandoz Spill where toxic waste was released into Germany’s Rhine River. Source: Business Pundit

If anything, China learned from the British, French and the US, who taught the Chinese that by starting two 19th century wars in China, huge profits were made selling Opium to the people.

Then more than a century later, Deng Xiaoping said, “Getting Rich is Glorious.”

See Oil Spills

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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Posted by Lloyd Lofthouse

Really Fast Trains in and from China

August 13, 2010

Devin Coldewey at Crunch Gear writes about plans for future-trains in China that may run at speeds of 1000 kilometers or 620 miles an hour.

China is looking into increasing speeds for longer distances by using maglev trains without air resistance by building vacuum-sealed tunnels. Today’s maglev trains with air resistance are capable of hitting speeds of about 500 km/h.

Darren Murph at engadget.com also wrote about these super-fast trains.  Darren mentions that China says they will have maglev trains ready in three years.  In fact, they have one now outside Shanghai. I have ridden the maglev train that runs from Pudong Airport to Shanghai. It seldom hits its top speed for the short trip, but it is smooth and fast—a few minutes compared to more than forty in a taxi or bus.

To reach speeds of 1000 km/h means more money. Each kilometer to build these vacuum tubes will cost an extra $2.95 million American. I have a question. What happens if the vacuum tube springs a leak?

Darren ends with “Pony up, taxpayers!”, but that’s not how the Chinese raise money.  Most money in China comes from the profits of state-run banks, industries and duties on imports and exports not on income or property, although that may be changing as China studies how the US government raises money.

China is also planning to build high-speed rail from Beijing to London. Source: The Sydney Morning Herald Traveller

See China On the Fast Track

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Posted by Lloyd Lofthouse

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