TIME TO OFFSHORE THOSE JOBS:

Rising Wages Rattle China's Small Manufacturers (ANDREW BATSON, 8/02/10, WSJ)

Wages in China have been rising for years, but pressure is now particularly strong as the rebound in the nation's economy runs up against the shrinking supply of younger workers caused by the one-child policy. Big foreign companies have felt the effects, with the local operations of Toyota Motor Corp. and Honda Motor Co. hit by strikes and Hon Hai Precision Industry Co., the world's biggest contract manufacturer of electronics, promising raises of at least 30%.

But the impact could be even more pronounced on China's more than 10 million small businesses, which account for 60% of the economy and 80% of jobs. Many small, light manufacturing businesses crowd together in highly specialized "clusters," particularly here in Zhejiang province on the eastern coast.

The most remarkable aspect of the rise of China is what a low level its decline is beginning from.

Posted by Orrin Judd at August 2, 2010 5:36 AM