Tuesday, February 06, 2007

The Chinese are coming! The Chinese are coming!

Many economists expect that within 15 years, China will surpass the United States as the world's leading economy. Complaints about the loss of blue collar US jobs to China were once political dynamite (as the loss of white collar jobs to India has been in the last few years). Now, China is eyeing Africa as a huge untapped market for its cheap goods. The public radio show On Point did an hour long program on burgeoning China-Africa business ties.

To strengthen these links, China's leader Hu Jintao recently embarked upon an African tour. Some Africans welcome Chinese investment while others fear that the flood of new money would perpetuate corruption and bankroll human rights' abusers.

But the concerns are not limited to that. Many fear that Chinese companies would deteriorate conditions for African workers.

In Namibia, for example, Chinese companies are unburdened by minimum wages and labour laws and frequently undercut local construction companies, the BBC noted.

Namibia, in southwestern Africa, is hardly rich but the government is trying to raise living standards for its people. Due to good governance and reasonable labor regulations, Namibia has one of the highest standards of living in Africa and actually ranks in the top half of world countries in per capita income (GDP), higher than China (and most Latin American countries). Many fear that this will be eroded.

Some would argue that Namibia should just eliminate the basic guarantee but minimum wage or not, it's hard to compete with slave labor.

Namibia is not the only country that understands that reasonable labor regulations have a beneficial effect on living conditions. Many American small enterprises are starting to realize that the minimum wage is good for business.

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