China has obviously been growing at a rapid rate for quite some time now, and is projected to grow their GDP at a 6-7% rate for years to come, and similar with India. Now that people in China have been producing more and the demand for workers has been growing, people are demanding that they should be paid more. So, that results in comapnies' margins being squeezed to the point in which they have to charge more for their products. One of the main reasons China is (was?) such a good place for American companies to build manufacturing plants and produce goods is because of cheap labor.
I think Africa will be the next big labor market, to produce cheap products much like China has done for years. Their population is growing fast, and is relatively young. Their political issues need to be resolved first.
The only other solution that I can think of would be to move further inland in China. They do have the largest population in the world at the present time.
No comments:
Post a Comment