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When labor is not labor

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Naked Capitalism has highlighted a piece on the NYT  about protesting ex-bank workers. The article itself wasn’t too bad by NYT standard despite snides about poor divorced protester moving to Beijing to be “closer to the country’s leaders” and other useless commentaries. The interpretation by Yves Smith, though, is completely off by suggesting “the futility of labor action against entities near and dear to the officialdom”.

Yes, Honda and Foxconn are foreign-owned (btw, the Chinese do not see Taiwanese as foreign), and strikes against them had subtle governmental support. But could there be other reasons behind this difference in tolerance? Things like:

  1. The southern manufacturers with “approved” strikes are mainly exporters, while the banks focus on domestic market.
  2. Workers at the southern manufacturers are mostly young, unskilled country migrants while the ex-bank employees are middle-aged, effectively unskilled, officially city dwellers.
  3. Raising the wages of the unskilled migrants force the exporters to be more competitive while the banks need to reduce their bloated headcounts to be efficient.
  4. Raising wages for migrants helps rebalancing the Chinese economy and builds a middle class, while rehiring the ex-bank employees will…hmm…make their lives better.

Whatever you think of firing these middle-aged people with no real marketable skills, the fact remains that there is economic rationale behind stonewalling their efforts and supporting the cause of the migrant strikers. Whether national policy should be determined solely by economic considerations is another issue though.


Written by Cindy Luk

August 16, 2010 at 7:42 pm

Posted in China, Industries & Companies, Media

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Another instant China expert

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This is the reason I started this blog. Western media are full of “China experts” who can’t locate it on a map!

You know this is written by a clueless dude almost from the first sentence.

For years, Chinese economists have advocated liberalizing the exchange rate and allowing it to rise, weaning the country off its addiction to exports.

Really? Which Chinese economist to be precise? And what about those who think China should just give a finger? Have they all been exiled to Alaska? Now, if the US is willing to cede Alaska, maybe there’s a deal. But mind you, nobody wants California though.

ambitious provincial politicians such as Bo Xilai, the party boss in the western city of Chongqing, may defy the central government. If he wants bank loans to build popular projects such as affordable housing, it may be hard to stop him.

Jeez, what has this guy been smoking? Chen Liangyu, the party boss of Shanghai (which btw, is China’s commercial capital. I doubt Sebastian Mallaby knows it though) tried to stonewall the central government’s push to dampen the property market in 2006. Instead of being just the boss of a hinterland city, that guy actually sat on the Poliburo! What happened to him? How does 18 years prison term sound?

Now, of course, if you’re really bored, you can take all this as playing the “spot an idiot”game. If you use China and economics as the twin parameters, it’s really easy to win:)

Seems like Stephen Roach is also having fun playing this game, via Zero Hedge.

Written by Cindy Luk

March 19, 2010 at 4:02 am

Posted in China, Media

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