Monday, November 30, 2009

Surowiecki reports that China has hurdles of its own to clear

... there’s another obstacle to Chinese consumers becoming engines of economic growth: many workers just don’t make enough money. While the country’s boom has been extraordinary, ordinary workers have not reaped the gains one might expect. In the past decade, in fact, the share of G.D.P. that goes to wages has actually fallen, while the share that goes to profits has risen. Although the prevailing image of China is one of labor-intensive factories, with lots of workers toiling away on antiquated machinery, much investment has gone instead into factories and projects that are capital-intensive, which create fewer jobs. So while the pie has been growing rapidly, the share that goes to individual households has shrunk.

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