WHEN YOU'VE NOTHING TO OFFER BUT CHEAP LABOR...:

China's brightest day may have just passed (David Frum, August 09, 2008, National Post)

China is a low-value-added economy. One famous study found that of the $299 cost of an “assembled in China” iPod, only $4 was retained in China. This is not a country with a lot of margin for error.

China now seeks to climb the value-added ladder, as Japan, Taiwan and South Korea did beforehand. It has little choice: Annual wages in China’s cities are rising past the $2,000 mark, enough to send the most basic manufacturing industries (toys, apparel) to seek cheaper workers in Vietnam, Cambodia and Sri Lanka.

But it’s hard to see how a society that lacks the rule of law — where no factory owner can be sure who owns the ground under his plant — can execute that climb.

...you're easily replaced.

Posted by Orrin Judd at August 17, 2008 8:09 AM