Cheap Chinese labor or unpaid Chinese labor?? Read from some Chinese media that the bad debt (so-called account receivable) for Chinese exporters already exceeds US$100 billion, equal to 20% of all 2004 Chinese exports (estimated at US$500 billion). And it is increasing at US$15 billion annually. Another way to put it, the foreign business is using US$100 billion interest-free loan/free money from China, and a lot of them will become bad debt for China but free money for importers of foreign countries. While at the same time, China is getting bashed for taking the job from the developed countries. What a “fair and balanced” world system?
According to some research, there are three types of situation in these “account receivable”. 1) Importers in foreign countries have no idea they need to pay (LOL); 2) importers are financially insolvent; 3) deliberate cheating of the foreign importers. And Type 3 is the majority, accounting for 66% of the total.
Majority of these “account receivable” are from developed rich countries (wonder why rich countries are rich??), and small part of them are from African countries, where political chaos is popular.
Here is an example, Apex, a very popular made-in-China brand in the US market for TV set, DVD players, and VCR… I saw some US stores now sell this brand of DVD player for US$20 after rebate. And for each of the DVD player produced by China, the big 6 patent holders (Sony, Philips, HP, etc…) take in US$15-20 royalty. So this means Chinese manufacture (ChangHong) produces the DVD players for close to nothing, and at the same time has to pay for raw materials, labor, shipping… And now this ChangHong company is near bankrupt because the US distributor owed them a couple of 100 millions. And there are hundreds of Chinese exporters like this.
Chinese exporters are in an awkward situation since the world now has an overproduction and overcapacity problem, so it is a buyers’ market.
Just one more reason for China to switch away from the export-oriented development model |
