When the Chinese Civil War ended in 1949, Mao Zedong famously said “China has stood up.” While it took another forty years to get started, the recent economic explosion has been a world-changer. But that story isn’t over; there’s a remarkable piece in the NY Times this morning outlining how the Chinese are doing a bit of standing up on their own, economically. They’re walking away from those “cheap labour” manufacturing jobs that have served as one of the main economic drivers of the last couple of decades. At the end of the day, cheap labour doesn’t stay cheap. And while there are probably some more “cheap labour” places for businesses to move—India, Africa—the consequences for China have to be profound. And I can see the day coming, maybe not in my lifetime but not that much further out, when the whole notion of moving businesses around the world so you can pay people less has become, finally, self-defeating. What happens then?
