China Takes Away American Jobs?

"The loss of employment opportunities in China. manufacturing industry The cost is rising and factories are moving out. This is the latest argument written by Michael Schuman, a senior journalist in the United States. The title of this July 25th article is "China's taking away the work of Americans, now or reversing".

Reported that the Republican presidential candidate Donald J Donald (Donald J. Trump) in the presidential campaign process has been claiming that China is stealing the manufacturing industry in the United States. Speaking at the party's National Congress last Thursday, Trump said, "extremely bad." Trade The agreement resulted in the loss of jobs in the US manufacturing industry. Trump also said that the US's support for China to embark on trade liberalization is a "huge mistake".

According to the report, Trump's view once had its merits. China has a large number of workers, and its salary level is far lower than that of the US workers, which is very attractive to manufacturers who want to cut costs, increase profit margins and maintain low prices. According to a study published on The Journal of Labor Economics, from 1999 to 2011, the United States lost at least 2 million jobs due to a surge in imports from China.

However, in today's China, the outlook for workers is rather unsettling, not as Trump suggested. As domestic economic growth slows down and production costs continue to rise, competition from foreign countries, including the United States, is intensifying, and they are losing their jobs.

Some presidential candidates are "clamour for the past", said James McGregor, chairman of APCO Worldwide in Greater China. "The situation of China's export manufacturing industry is getting more and more difficult."

In recent years, China's labor force market Drastic changes have taken place.

With the development of China's economy, there are many opportunities in many industries. The attraction of assembly line work is not as attractive as it used to be. So, in order to attract workers, managers have offered higher wages. At the same time, the local governments in Shenzhen, neighboring Hongkong and other industrial cities, have been steadily raising the mandatory minimum wage standard so as to enhance the welfare level of workers and families, and urge enterprises to produce products that are higher and more expensive.

All these factors have pushed up the wages of factory workers in China. According to Japan External Trade Organization, their monthly average wage is now 424 dollars, which is more than 29% higher than that of 3 years ago. Compared with many other emerging economies, China's current labor costs are much higher. Workers in Vietnamese factories earn less than half of Chinese workers, and wages in Bangladesh and other countries are less than 1/4 of Chinese workers.

The rising cost of production has also greatly changed China's competitive position with the United States.

A study carried out by Boston Consulting Group in 2015 showed that the manufacturing costs of China's main export processing zones were almost the same as that of the US in terms of salary level, worker productivity, energy costs and other factors. The cost of manufacturing in Boston's main export processing zones was almost the same as that in the United States. (BCG)

Because of the benefits of greatly reducing costs, more and more American businesses are returning to the nest, that is, to move factories back to the United States. According to another survey conducted by BCG in the US manufacturing industry last year, 24% of respondents said they were actively transferring production from China to the mainland, or planned to do so in the next two years. In 2012, the proportion was only 10%.

"This is reasonable at the economic level," said Harold Sielcken, senior partner of BCG (Harold Sirkin). "The United States is in a very advantageous position."

This means that workers in American factories will get more job opportunities. In the BCG survey, half of respondents said they expect to hire more manufacturing workers in the United States in the next 5 years.

It is not just the United States that takes jobs away from China. Rising costs are pushing many industries in many industries to migrate production to other countries. In a recent survey conducted by American Chamber of Commerce in China in China, 1/4 respondents said they had planned to move their business out of China, and they ranked the rising cost as the primary motivation for doing so. Of course, about half of them are moving to other developing countries in Asia, but another 40% are moving to the United States, Canada and Mexico.

On the shelves of American retailers, products from many factories that are moving away from China can often be seen.

In February this year, Hongkong based Michael Stella, a shoe manufacturer of large scale foundry for Mike Cross (Rockport, Kors) and Rockport, closed a factory in China and transferred some of its production lines to factories in Vietnam and Indonesia. Headquartered in Hongkong, Booker is also planning to close a factory in China this year to Dockers, Brooks Brothers and other garment manufacturers in the United States, and to transfer production to new factories in Vietnam and Ethiopia.

Other companies that have extensive businesses in China may not close their factories, but are seeking to invest elsewhere.

Foxconn, a Taiwan based company known for its iPhone in China's factory, is planning to build as many as 12 assembly plants in India, which will create about 1 million new jobs for Foxconn. A pilot project in Maharashtra, in Western India, will start producing mobile phones later this year.

Although China's exports to the US still remain the largest in scale, it also faces more and more competition from cheaper Asian rivals. A report released by Fung Business Intelligence Centre in March this year showed that the market share of clothing exported to the United States last year has declined, while the share of Vietnam and Bangladesh has increased. This is a research firm based in Hongkong, focusing on research in the supply chain and procurement field.

"China is not an attractive place for all low-cost jobs," said Gimoman, chairman of the Chinese American Chamber of Commerce in Beijing, James Zimmerman. "China is moving towards the upstream of the value chain, which means that there will be adjustments."

Because China's economic growth is blocked, workers in the country are also facing loss of jobs.

The economic growth rate has dropped to its lowest point in nearly 25 years, and many industries have been damaged. The manufacturing industry that has contributed to 1/5's urban employment opportunities has suffered a particularly serious impact. On the face of it, the performance of China's job market has been exceptionally good under the impact of the economic downturn. The figures released by the government show that the unemployment rate in the country is only 4%.

But some economists think the employment situation is not as good as official figures show. A report released by London based Fathom Consulting in June estimated that China's unemployment and insufficient employment rate will reach 12.9% this year, 3 times that in 2012.

Leland Miller, chief executive of China Beige Book International, said that as the weaker economy finally began to produce significant results, China's employment market had a critical turning point at the end of last year. Data provided by him showed that recruitment activities began to decrease significantly in the fourth quarter of 2015, but the situation has stabilized in recent months, probably because the government has adopted more stimulus measures. Miller believes such growth is not sustainable.

Chinese factory workers who have already been affected may face a more severe situation in the future.

Many industrial enterprises are burdened with heavy burden of overcapacity, which may be unavoidable. In February this year, China's Ministry of human resources and social security estimated that only 1 million 800 thousand people in the steel and coal industry could lose their jobs.

"If anyone says China has a healthy or prosperous job market," Miller said, "they simply don't know what they are talking about."