Monday, June 7, 2010

China Not Unique

This New York Times article reports that wages are rising in China and that as a result prices will rise around the world. That would be true if China were irreplaceable, it is not.

Think back to when just about everything was Made in Japan, now it is all Made in China. If it isn't China, it will be somewhere else. Who is to say the next big thing won't be Made in Bangladesh or Made in Myanmar? Perhaps Made in Togo or Made in Ghana?

People with factories to build will search the world for places with very low costs of living where they can pay workers $125 a month, or less. In the foreseeable future, such places will continue to exist. Furthermore, the workers there will benefit from reliable, albeit small, paychecks and the developed world will benefit from inexpensive manufactured goods.