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From someone living in a developing nation, I've been pondering on this a bit.

I saw a figure that in 2003 the hourly wage in China was less than 1 dollar: about $0.78 Who in the world can compete with that? So the zero sum game is well in place.

But it now gets worse as also Chinese companies are mushrooming: the South African textile industry, a relatively thriving part of the economy, has been virtually destroyed within three years by Chinese imports. So China is not only taking on developing countries, it's defeating them too. Result: bankruptcies, higher unemployment and an even graver outlook for the poor. Economic growth is still high in SA, but one wonders what would happen if China would take on SA's core industries.

But why were the South African companies destroyed: simply because the South Africans abandoned to purchase local products and went for the cheapest available. Simple as that. I've observed before: the African Dream is not too different from the American Dream. And they want it now, so it has to be done on the cheap - which ultimately is destroying their own economy.

On the short term: it means that people from townships can afford nice looking clothes without little costs - and wearing nice clothes is definitely a part of empowerment. On the long term: this "winner takes all" trend is insidiously damaging for developing nations. I don't see how it can be stopped, short of China going through a cycle of developing unions blocs, higher hourly wages, responsible external costs and an equal wealth distribution. Which may take generations - at best.

by Nomad (Bjinse) on Sat Dec 1st, 2007 at 10:36:25 AM EST
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