Jay, why do you think China works so hard to keep the RMB at its current fix to the USD? it does not seem that even a substantial revaluation would endanger the export of jobs to China. all i can think is that China has so many more unemployed that they want to keep enlarging their share compared to the rest of rapidly developing Asia.
however, the accumulation of huge amounts of US assets, a la Japan, has its costs, which may be a lot for a country at China's stage to afford. i am not at all clear on what currency controls they impose and how they impose them, to achieve their USD rate fix. but without sterilization (which has its own budgetary costs), it seems they will flood China with oodles of RMB under the current fix regime, which is very inflationary itself.
also, i have read in several places (including Duncan's book, i believe) that unskilled factory workers cost $3-4 per day; is this true?
also, do you have any thoughts on what this manufacturing job drain from the West means for the West? a recent Grantham interview in Barron's found him rather sanguine at the prospect of, say, another 6 million such jobs down the drain here. however, i am not sure that overall corporate margins can support the kind of lifestyles we like in the US on just service margins.
not to mention that the cat is out of the bag w/r/t services as well; with jobs in this sector being exported to India, China, etc. even if your own job doesn't leave, somebody else's did, and that somebody else is more competition for your job. i am amazed at the wage depression in IT industries (e.g., programmer day rates) i have heard about.
the WSJ recently had an article which stated that the going rate for a live-in maid was around $50 a month in Chinese metro areas. |
