I suspect this is elementary economics, but could you unpack that relationship for me? You're saying companies will have to pay higher wages if workers have state-supported health insurance/services and/or a social retirement program? La Chine dorme. Laisse la dormir. Quand la Chine s'éveillera, le monde tremblera.
Governments are not Santa and social benefits aren't made by elves. We need to understand that these things cost money and have to be sustained through taxes and/or user premiums. Chinese goods are so cheap partly because workers get no benefits--no retirement, no health care and often rather shoddy schools, as recent earthquakes show. Lots of what is spent is wasted on graft to local party elites. There is little reason to expect that a scaled up health care industry would be built more efficiently. One would hope that it might be run more efficiently, but possibly in vain.
But the ongoing costs of health care and retirement will eventually increase the cost of exports. The US and Europe have been uncompetitive wrt manufacture of consumer goods in no small part because of the total absence of any benefits to Chinese labor. China has a vast pool of potential industrial labor still in the countryside, so, in effect, Malthus rules and wages tend to subsistence. China has begun to see that the lack of any rules on environmental pollution has to be dealt with and are likely focused there and do not want to be distracted by other expensive programs.
From the point of view of the elites, workers are a disposable, renewable commodity, little different from pigs and chickens raised for market. They would object to the characterization, but the fact is western elites envy them their lack of restraints. The attitudes of some "overseas" Chinese of the business class that I knew or knew of in LA were completely compatible with that characterization. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
Have the neolibs got to the chinese ? keep to the Fen Causeway
That is a very large part of the whole point of globalization. The fact of a low cost producer puts pressure on higher cost producers. The public and the vast majority of economists have been taught that this is just how economics work and that bringing politics into the equation is WRONG. Of course this is absurd and the existing arrangements are the RESULT of politics that favor elites and that then disguise the fact that politics are even a part of the equation.
It is a measure of the task ahead that enough of the public must be re-educated to support sensible, available solutions, such as Hudson, Stiglitz and others have suggested, or see themselves in the same condition as the Chinese worker today faces. The next generations really can all live in shipping crates sitting in open sewers unless we awaken. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
