Marty said: > Well there is a lot surrounding the issue but I would say first of all > that the left should be careful to endorse a strategy of growth that > promotes exports in one country at the expense of worker well-being in > others.
I have neither the intention nor the ability to promote such a strategy :-) I just think it's where we're at, at least in the short term. > So, rather than just see China as practicing some wonderful > economic strategy that other countries could adopt (and here the right > might say that the strategy is free-market and the left might say state > direction), we should see that China's exports are coming from FDI that > is leaving Mexico because Mexican wages were starting to rise although > they were still below their 1994 level There has also been a phenomenal growth in domestic private capital in China over the last 20 years, and not just in the form of Hong Kong's re-integration (although annexing an economy which is bigger than those of Finland and Norway has to have some benefits!). See, e.g. this article: "While reviewing the development of the national economy in 2002, Qiu Xiaohua, deputy director of China's National Bureau of Statistics [NBS], said the state-owned economy had contributed one-third to the overall development of the national economy while two-thirds came from the non-state-owned economy. Private business had become a major non-state-owned economic power to boost the rapid and sustained development of the national economy, Qiu added. NBS statistics showed that Chinese privately-owned financial assets exceeded 12 trillion yuan (US$1.45 trillion) by the end of 2001, and in the same period, state-owned assets totaled only 11 trillion yuan. "That is to say, China's private assets have exceeded those of state-owned enterprises and institutions," Qiu said." http://asia.news.yahoo.com/030224/4/scxm.html > and being redirected away from > ASEAEN countries where there is still great poverty as in Thailand and > Indonesia. There are the matters of the late '90s "Asia Crisis" and the political fallout from that. Indonesia is somewhat aimless at the moment, largely because the revolution of 1998 failed to change anything behind the scenes (or that much in front of them for that matter --- hence the rise of Islamism there). Indonesia is also a _lot_ a less developed than Thailand, which is now well on the road to recovery. e.g. "The Thai economy grew faster than expected in the first quarter, official data showed Monday, prompting the government of Prime Minister Thaksin Shinawatra to raise its 2003 growth forecast amid a push for more consumer spending. Gross domestic product grew 1.5 percent, seasonally adjusted, slowing from a revised 2.1 percent in the fourth quarter, the government's economic advisory board said in Bangkok. That was faster than the 1.3 percent median growth forecast in a Bloomberg News survey of nine economists. Thai stocks and the baht gained after the government raised its full-year growth forecast by half a point to 5.5 percent, faster than last year's 5.2 percent rate. "The demand for new houses is so strong that some developers are being pressed" to speed up completion, said Pumipat Sinacharoen, vice president at Asian Property Development PCL, the country's No. 3 homebuilder. Last week, Asian Property received bookings for 120 of 150 units it put on sale in a project in Bangkok, he said. >From a year ago, first-quarter GDP grew 6.7 percent, beating expectations of a 6.2 percent gain. That annual growth rate is the fastest pace that Southeast Asia's second biggest economy has recorded in three years. The Malaysian economy, the region's third biggest, grew 4 percent in the first quarter and Indonesia, the biggest economy in Southeast Asia, expanded 3.4 percent in the three months to March 31. "We have introduced several new vehicles because demand is very strong," said Chatchai Bunnag, president of Ford Motor Co.'s Thai unit. http://www.iht.com/articles/99658.html > And the process is squeezing South Korean workers as well > as China has become the favorite location for South Korean investors. > Already about 55 percent of South Korean workers are now classified as > daily or temporary, as opposed to regular. South Korea is not only > losing FDI to China it is not getting much anymore from US and Japan. > Thus the government is now seeking to restrict workers even more and > open up new free investment zones with all sorts of benefits to foreign > investors which domestic firms now want. This is, in a perverse way, a tribute to the well-known organisation and militancy of S.Korean workers, who have driven up the price of their labour relative to Chinese workers; which, of course, is not to say that Korean workers should back down. > So, the first point is that we need a broader frame to understand > China's recent growth and that frame should make us realize that > China's economic gains are not generalizable but rather are a > reflection and in turn intensification of capitalist dynamics that work > against workers. They work against workers in the countries which lose jobs to China; they work for workers in China and workers in other countries which supply goods to China. > In China itself it appears that workers are increasingly not benefiting > as the economy moves to export directed growth. Studies are showing > that while wages are rising, workers have much greater costs for health > care and housing which means that they are not getting ahead. Given the absence of militant unions, I'm only surprised that wage rises are occurring at all. My bet is that will change eventually. > Moreover > urban unemployment is now approaching 13 percent and that does not > include the hundred million peasants who are in the cities looking for > work. In a country with such a high proportion of peasants (and considering that many of them no longer wish to be peasants) I'm not surprised. It's hard to comment without knowing the average length of unemployment, etc. > Beyond that it is my impression that FDI flows are becoming increasing > concentrated in fewer and fewer third world countries and not going to > the poorest. I'd want to see some evidence for that. > You should see the Trade and Development Report 2002 for some really > interesting stuff about the lack of value added for countries involved > in export production organized by transnational corporations. Perhaps because many of those transnationals are based in developed countries which are fighting tooth and nail to retain jobs, with the probable results that: (1) the jobs will go anyway and/or (2) the measures designed to retain them will have negative effects on other sectors of their economies. Regards, Grant.
