sabato 27 agosto 2011

The Economist: Asian labour markets

Aug 27th 2011

Average real wages in Asia’s formal economy (ie, excluding the activity that goes unrecorded) have risen continuously over the past ten years. Wage growth depends partly on labour productivity. Most countries have been able to achieve annual labour-productivity growth of 2-4%. China’s wages have risen quickly, and faster than its growth in productivity. China has experienced a rapid increase in private-sector employment and urban migration. In India, Sri Lanka and the Philippines wage growth has lagged behind productivity growth. As people have moved from informal to formal employment, the pool of labour in the formal economy in the Philippines has increased, keeping wage growth low.

Emergono alcuni dati interessanti:
1) Nel periodo 2000-2010 la Cina ha avuto in Asia l'incremento più alto (e nettamente più alto) sia per quanto riguarda i salari che la produttività.
2) Subito dopo la Cina, si colloca un altro paese guidato da un partito comunista, e cioè il Vietnam.
3) Se si fa un confronto con il paese che spesso viene contrapposto positivamente alla Cina, l'India non solo cresce assai più lentamente della Cina per quanto riguarda salari e produttività, ma, mentre in Cina i salari crescono più rapidamente della stessa produttività, il contrario avviene in India
Accogliamo anche il suggerimento di alcuni lettori del blog pubblicaandoun articolo che conferma il ruolo centrale dello Stato (guidato dal PC) nel rapidissimo sviluppo della Cina [DL].


2016: when China overtakes the US

After more than a century as the world's largest economy, the US will need to adjust to its declining global hegemony, Wednesday 27 April 201

Various observers have noted this week that China's economy will be bigger than that of the United States in 2016. This comes from the International Monetary Fund's (IMF's) latest projections, which were made in its semi-annual April world economic outlook database. Since 2016 is just a few years away, and it will be the first time in more than a century that the United States will no longer be the world's largest economy, this development will be the object of some discussion – from various perspectives.
First, let's consider the economics. China has been the world's fastest growing economy for more than three decades, growing 17-fold in real (inflation-adjusted) terms since 1980. It is worth emphasising that most of this record growth took place (1980-2000) while the rest of the developing world was doing quite badly by implementing neoliberal policy changes – indiscriminate opening to trade and capital flows, increasingly independent central banks, tighter (and often pro-cyclical) fiscal and monetary policies, and the abandonment of previously successful development strategies.
China clearly did not embrace these policy changes, which were promoted from Washington by institutions such as the IMF, World Bank, and later the WTO. (China did not even join the WTO until 2002.) It is true that China's growth acceleration included a rapid expansion of trade and foreign investment. But these were heavily managed by the state, to make sure that they fitted in with the government's development goals – quite the opposite of what happened in most other developing countries. China's goals included producing for export markets, promoting higher levels of technology (with the goal of transferring technology from foreign enterprises to the domestic economy), hiring local residents for managerial and technical jobs, and not allowing foreign investments to compete with certain domestic industries.
China's economy is still very much state-led, with the government controlling most of the financial system, the exchange rate, and about 44% of the assets of major industrial enterprises. That is why China was able to plow through the world recession with GDP growth of 9.8%, despite losing about 3.7 percentage points of GDP due to falling net exports.
Now for the politics and international implications. First, much of the discussion of China's rise is written from a Washington perspective – that is, from the perspective of an empire. From this view, China's rise is a "threat". Since this view sees the supremacy of Washington and its allies as good for the world, China's rise is also seen as a threat to the world. It is assumed that China will become an empire like the United States, but will not be so "benevolent" as the United States is.
This view is not supported by the facts. To take just current and recent history, it is the United States that invaded Iraq, leading to an estimated million deaths, is occupying Afghanistan, bombing Pakistan and Libya, and threatening Iran. The United States' and its allies' control over many developing countries' economic policies through the IMF, World Bank and other institutions has also caused a lot of damage over the past few decades.
So, a shift of power toward a more multipolar world is likely to give us a more peaceful and just world. In fact, it is already happening: the majority of South America, for example, is now governed by democratic left governments that have produced positive reforms that benefit the majority – something that was practically impossible to achieve while Washington dominated the region. And of course, the vast majority of people in the United States also stand to benefit from a smaller US role in the world, as we transition back to a republic from an empire: less spending on senseless wars, fewer casualties, fewer enemies, less distraction from our real problems at home.
China's foreign policy is mainly geared toward securing the raw materials and trade that will fuel its growth and development. This is done through commercial transactions. Of course, its corporations – like those of the rich countries – have come under criticism in various countries. But China does not try to tell other countries what their foreign policy towards other countries, or their overall economic policies, should be – as the United States often does. This is an important difference between a country that pursues its own national and economic interests, and an empire that seeks to impose its own order on the world.
It is always possible that China, once it becomes a rich country – and this is many years away – could develop imperial ambitions. But so far, its leadership seems to see China as a developing country seeking to become a high-income country, and doesn't see a role for empire-building in this process. "Hide brilliance, cherish obscurity," Chinese leader Deng Xioaping once said.
A few months ago, press reports, using an exchange rate measure of GDP, announced that China had become the world's "second largest economy" just this year. But by a purchasing power parity (PPP) measure, which adjusts for the difference in many prices between China and the US, China had become the second largest economy years ago. A technical matter: if we measure China's economy in dollars at current exchange rates, it reached $5.9tn in 2010, as compared with $14.7tn for the US. By a purchasing power parity measure, its economy reached $10.1tn in 2010. It is that measure that the IMF projects to grow to $18.98tn in 2016, putting the US in second place at $18.81tn.
However, it is likely that even the IMF's PPP measure understates China's GDP: economist Arvind Subramanian has estimated that China's PPP GDP in 2010 was already about even with that of the United States. An IMF spokesperson, quoted this week by the Financial Times, weighed in on the debate:
"The IMF considers that GDP in purchase power parity (PPP) terms is not the most appropriate measure for comparing the relative size of countries to the global economy, because PPP price levels are influenced by non-traded services, which are more relevant domestically than globally … The Fund believes that GDP at market rates is a more relevant comparison. Under this metric, the US is currently 130% bigger than China, and will still be 70% larger by 2016."

It is true that the "market rate" measure is better for some comparisons. But one important place where the PPP measure is more relevant is in military spending. The cost of producing a military plane and training a pilot in China is much lower than in the United States. Washington's current policy is to maintain military supremacy in Asia, but an arms race with China could make the cold war look cheap by comparison. The Soviet Union's economy was just a quarter of United States' economy when we had that arms race. If the US were to have a serious arms race with China, we could forget about Medicare, social security and most of what our federal government spends money on.
Fortunately, a new cold war with China is not in the cards for now. But the size of China's economy is another good reason to make sure that it doesn't happen.

4 commenti:

Orazio ha detto...

Professore più la Cina cresce, e cresce bene, e più il mio timore che gli USA e i suoi satelliti occidentali si lancino in una guerra nucleare contro essa aumenta. Del resto il piano sembra chiaro Libia, Siria (e Libano), Iran e poi la Cina. Il comportamento dei Russi sarà decisivo, se terranno il punto e difenderanno la Siria allora le cose potrebbero cambiare, se invece, come temo, chiuderanno la loro piccola base navale di Tartus allora il destino è segnato. Potrebbe scrivere qualcosa in merito nel blog. Grazie.

Alessio ha detto...

ora sarebbe interessante pero' conoscere la sua definizione di comunismo e capitalismo, visto che suggerisce una correlazione tra la crescita economica di Cina e Vietnam e il loro essere guidati da un "partito comunista". Altrimenti, qualcuno potrebbe dire che i PC di Cina e Vietnam non sono altro che gruppi dirigenti autocratici 'sviluppisti'.
Lei suggerisce anche che la sostanziale differenza di Cina e VN rispetto all'India sarebbe proprio il fatto che l'India ha la sfortuna di non essere "guidata da un partito comunista".
Inoltre, l'articolo dell'Economist ricorda anche che la Cina "experienced a rapid increase in private-sector employment". Qualcuno potrebbe sostenere che e' il settore privato a crescere e trainare l'economia in Cina e Vietnam, non quello statale. Che ne pensa?
Sarebbe interessante chiarire questi concetti, come anche sapere se a suo avviso i "partiti comunisti" cinesi e vietnamiti stanno traghettando i loro popoli verso una società socialista o comunista e/o verso l'abolizione dello stato.

Anonimo ha detto...

Dear all
I think you hit the spot, dear Orazio. These are, indeed, the great games in geopolitical scale in the years to come. One of the possibilities within the resources of the (no longer truly “hegemonic” but immensely mighty Empire, to appeal to a customary distinction) is that it simples tries to grab what it is able to, with complete disregard to everything: oil, of course, but not just that. We may, indeed, be heading to what G. Arrighi called “systemic chaos”… or the USA may instead be willing to accept a slow withering away of its world prominence, with China stepping up to nº 1 in all aspects, including of course cultural, among others. That will likely mean a more peaceful, more equal, more law abiding, and more environment-friendly-cum-more-prosperous world. Obviously, last events don’t seem to augur good chances for this last scenario… but then again human history is not written in the stars, rather made by living men. That is, by us.
From that perspective, I do think that China’s abstention in the UN in the beginning of this year has to be recognized as a mistake. If the Chinese had stopped things a little more, and even used a veto, they would likely have Russia and Brazil seconding (or “thirding”) them, not to mention the rest of South America and Africa… Things would definitely gone better, anyway. Maybe China has got to use some more “protagonism” in world politics. Don’t get me wrong. They are not the ones to blame, and I don’t wish them to substitute for the USA in the “white man’s burden”, of course… Maybe more like a true “big brother”, who protects younger brothers from the despotic, insanely mad “father”. Mark Weisbrot is fully right, I think, pointing out that the Chinese accept a democratic, law abiding, egalitarian treatment in relation among nations, whereas it’s the North Americans that make absolute question of their allegedly God given Herrenvolk prerogatives. The fact that they have great-white-hope Barack Obama as a president doesn’t seem to make many difference, does it?
From this perspective, also, it’s definitely very news that China and Vietnam are coming to terms. Let’s not forget that, if Stalin used “triangular diplomacy” in the case of the German-Soviet pact of 1939, probably one of his wisest decisions (and so Faustus’s pact with the Devil was the best thing he ever did…), Kissinger returned that with a vengeance and in a larger scale in the “triangular diplomacy” associated with the Sino-Soviet split in the 1970s. The war between China and Vietnam and “Khmer Rouge” tragic events (with Pol Pot being supported by both China and the USA, only to after being hypocritically portrayed by the same USA as a “communist ogre”), was one of the saddest things in the history of socialist countries. It’s very good to learn that animosity is withering away.
What definitely doesn’t wither way, dear Alessio, is the state, even in socialist societies. Marx was wrong as to that. And it’s good to know that those who consider them as disciples of Marx are still able to recognize that fact, learning from experience. Ah, but you should be able to recognize that the existence of market, and even some forms of capitalism, is one thing; another thing is the “financialized capitalism” of ours. With banks and fiduciary money firmly in public hands (besides of land and natural resources at large) the Chinese are definitely much better than we are. That’s why salaries there grow more rapidly than productivity, whereas here they grow, but more slowly than productivity, as in PIGS in last decade; or they are stagnant, as in Germany in last decade; or they decrease, as in PIGS now, to “correct” things and put them in pace with Germany. So says our official economic “wisdom”…
Doesn’t that make a difference to you?
As to this last point, see please the documents in Research on Money and Finance, particularly the reports of March and September last year, by Costas Lapavitsas and others, here:
Saudações cordiais.
Lisboa, 28 de Agosto de 2011
João Carlos Graça

Anonimo ha detto...

I dare suggest you to pay particular attention to March 2010 report, by Costas Lapavitsas, Nuno Teles and others, here:
…although I acknowledge that’s really a very big file. But please read at least Introduction and Conclusions. The origins of EU’s problems are not simply “too much State”, or “too much spending”, easy living and “dolce far niente” of its populations (or more at large its infamous incessant quest for “felicity”), unlike what mainstream media shout us incessantly. Nor is it competition in world markets of ferociously Communist China (or “Stalinist”, or “Maoist”, or…). Rather, it’s German entrepreneurial class having had things its way, with Drang nach Osten after 1989, and the subsequent transformation of former GDR, Czech Republic, etc. in a huge cheap labor “reservation” (and qualified labor, on top of everything else), which allowed it to avoid the growth of wages in Germany, and in cascade sent salaries down everywhere in the EU.