The brightest economic story in the world these days is that China’s wages are rising so fast that low-end manufacturing is beginning to shift into other countries lower on the development ladder. A beautiful illustration comes from today’s NYT in an article on how jobs are shifting from China to Bangladesh. This is the progress of globalization that critics scoffed at:
As costs have risen in China, long the world’s shop floor, it is slowly losing work to countries like Bangladesh, Vietnam and Cambodia — at least for cheaper, labor-intensive goods like casual clothes, toys and simple electronics that do not necessarily require literate workers and can tolerate unreliable transportation systems and electrical grids.
Li & Fung, a Hong Kong company that handles sourcing and apparel manufacturing for companies like Wal-Mart and Liz Claiborne, reported that its production in Bangladesh jumped 20 percent last year, while China, its biggest supplier, slid 5 percent.
Will proponents of protectionism for American manufacturing jobs against China agree that China should engage in more protectionism to protect its manufacturing jobs from Bangledesh? Clearly, they are at risk:
Among developing countries, Bangladesh is the third-biggest exporter of clothing after mainland China, which exported $120 billion in 2008, and Turkey, a distant No. 2, according to the World Trade Organization.
And with nearly 70 million people of working age, Bangladesh could probably absorb many more of China’s 20 million garment industry jobs.
I would suspect that American protectionists can see that the shift of low-end manufacturing from China to Bangladash is a good thing, as Bangladesh is lower on the development ladder and harming the worse off Bangladeshi workers to protect the better off Chinese workers would be wrong. They probably also recognize that this shift represents the best hope for a country like Bangladesh to move up the development ladder, and using protectionism to get in the way of that in order to preserve Chinese jobs would also be wrong. Why can’t they see the same is true of American protectionism as well?
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Saturday ~ July 17th, 2010 at 12:54 pm
anon
Are you intentionally misstating the position of people like Duy who says not that China (or the US needs more protection), but that countries such as China (and others) need to stop?
Do you have an argument other than math on paper says this, that this is what you were told about the model when you learned and studied it in school? Math on paper say other things too, in the same model, and you ignore that? How does the model you love so much do when it is manipulated from within through currency policy, when there are market failures such as monopoly, when capital is mobile (you really have work to do here), and the like?
When you have an actual argument, and when you are ready to stop misrepresenting what people are saying, then you post. This is religion, not economics.
Saturday ~ July 17th, 2010 at 1:56 pm
Adam Ozimek
Whether its currency manipulation, industrial policy, or just “unfair” labor laws, protectionism proponents will always find a reason why the other countries are giving their industries an advantage that needs to be combated with domestic protectionism. Im sure Bangladash is doing something the Chinese could point to, if nothing else their lower minimum wage.
Saturday ~ July 17th, 2010 at 4:01 pm
Rebecca Burlingame
All the protectionism in the world is not going to make a difference for what continues to play out; indeed, protectionism is almost beside the point for a number of reasons. The real work to be done in the developed world for the real demand in our futures primarily revolves around the transformation of service sectors so that they can provide the prosperity manufacuring brought in the 20th century. If women and men are both to have equal responsibility for themselves and for community, everyone has to get real about restructuring what work actually is. Because in the developed world, work is never going to look quite like it did in the 20th century. And if people are willing to think this through instead of having hissy fits (not pointing any fingers here) we have a chance of making work a lot better than it was before.
Saturday ~ July 17th, 2010 at 11:56 pm
teageegeepea
Paul Collier should be encouraged, since he proposed that our trade policy penalize them relative to less developed countries.
Friday ~ October 22nd, 2010 at 10:04 am
China, technology, and progress « Modeled Behavior
[...] to take hold in poor countries like Bangladesh, it is inevitable that some manufacturing jobs are beginning to shift there from [...]
Thursday ~ August 11th, 2011 at 7:26 am
tomas
HSBC Corp. said Thursday its monthly purchasing managers’ index fell to a 28-month low of 48.9 on a 100 point scale. Numbers below 50 show activity declining. The bank said it expects activity to slow further in coming months as government measures to steer rapid economic growth to a sustainable level take effect. Source: http://www.pa-international.com.au/index.php?option=com_content&view=article&id=115&Itemid=53