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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