How Rising Wages Are Changing the Game in China

Topics: Employment, Hong Kong, Guangdong Pages: 2 (912 words) Published: December 5, 2010
There is no instance in my day to day life that I do not use at least one product made from China. From kitchen utensil to garments, from kids’ toys to appliances, a marking of ‘Made in China’ is common. It is a general perception that it is not a good thing that China is producing so much for US consumption but globalization has allowed us to utilize cheaper labor and allowed us to afford products that we normally consume. Competing on the basis of labor cost is a source of sustainable competitive advantage for a company. I always remember that efficiency means faster, better and cheaper. If a company can accrue, train and retain manpower it will cause to higher efficiency. Qualified and knowledgeable employees produces good quality product with more consistency and less errors or waste. “Labor inputs can be reduced if employees are better trained so that time spent on each individual output is decreased. “ http://www.referenceforbusiness.com/management/Bun-Comp/Competitive-Advantage.html If a company is able to attain and sustain that level of manpower at low cost as possible, the company will have bigger margin, from cost of producing to a perceived value of the product. A country like China can leverage on the cost of labor that their country can offer. It greatly affects the country’s GDP (Gross Domestic Product). It would be a great benefit for China to continue to offer cheap labor to keep the world bringing in business to their country of 1.3 billion in population but Chinese people are getting more aware of contract law. Companies are getting high labor turnover. According to New York Times, June 2010, that labor dispute is becoming part of China’s economic landscape. And that of 210 factories that were studied by labor advocate, 90 per cent of those factories cheat on overtime. A common complaint among laborers is lack of overtime pay when a work schedule exceeds 40 hours. Mr. Liu, the labor advocate, said his group had done a study of 210...
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