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To: russwinter who wrote (109652)	2/19/2011 2:12:52 AM
From: GST	1 Recommendation Read Replies (1) \| Respond to of 110194

Russ -- why should this be so alarming? To me it is the natural progression of economic development. A migrant labor force might have made sense in the early mobilization of Chinese labor, but it makes less and less sense every year. The shortages of migrant labor are a positive development as jobs move west and up the delta. This has been going on year after year for quite a long time now: From the article you posted -- <<The population of migrant workers in China stand between 220 to 230 million, among whom 140 million had worked outside their hometowns. The labor shortage has been felt in the country since seven or eight years ago. Lu Jiehua, a professor of social science with the elite Peking University, attributed the shortage to the development of inland areas. "In the past, the prosperous Yangtze River Delta could create lucrative jobs for migrant workers," said Lu. "But now, the economic level in southwest China's Sichuan province and Chongqing municipality, as well as in north China's Hebei province and Tianjin municipality, rose dramatically, diverting a large number of migrant workers.">> I have no doubt that it will squeeze Taiwanese subcontractors in the lower delta, but I do not see it playing out as any sort of economic disaster.

To: russwinter who wrote (109652)	3/4/2011 8:01:22 PM
From: GST	1 Recommendation Read Replies (1) \| Respond to of 110194

<For instance, the Sichuan provincial government increased its minimum wage by 44 percent last year and companies like Foxconn, manufacturers of Apple's (NASDAQ: aapl) iPhone and iPad, raised salaries by 20 percent. Rising wages will continue as the fight for talent intensifies as more firms like Pepsi (NYSE: pep) and Intel (NASDAQ: intc) have announced billion dollar investments. Rents are also going up 15-20 percent and squeezing the margins of retailers like KFC (NYSE: yum) and Best Buy (NYSE: bby). Companies are starting to transfer the added costs to the consumer. McDonald's (NYSE: mcd) and Starbucks (NASDAQ: sbux) announced price hikes for the first time in several years. Finally, the economy is becoming more oriented to domestic consumption than exports. My firm, the China Market Research Group, estimates that retail sales will grow 16-18 percent in 2011. Why the shift? The government is trying to reduce pollution and environment damage borne from resource intensive manufacturing and is pushing for a stronger service sector. So far, the results have borne fruit as incomes have been rising.> finance.yahoo.com