The problem with Made in China

The problem with Made in China

Time for a change of pace. This article reflects an idea I had formed over the last few years, working for a company with an extensive Chinese presence. Basically, the incentive for the Chinese government currently is to continue to develop the interior of the country, further from their Pacific coast, in order to distribute the prosperity, as labor is becoming increasingly difficult to find in their east (even with their frenetic construction pace), driving wages and cost of living up. At the same time, the infrastructure (roads, rail) leading to the interior of the country can't keep pace with their desire to develop, so the industrial/commercial development further inland is occurring more slowly, causing a gradient of development and standard-of-living across the country.
It has been said for the last few years that because of the energy, raw materials and distribution situation within China, labor is the only input to the manufacturing process that is less expensive there. And this article provides a snapshot of that situation.
Strategically, it will mean that manufacturing will shift to other lesser-developed countries, as it has before, including Vietnam, Cambodia, Indonesia, and others.
Generally, as manufacturing goes, the service economy follows, so the hordes of freshly-minted MBA's who see China as a gold mine for their future would be well advised to take the longer-term perspective, in my humble-but-somewhat-educated opinion.