TT Boy
Hall of Fame Member
Off-Topic…Would have said so until I watched a very good & recent docu on Shanghai couple of weeks back. As an economy, they're growing at a tremendous rate i.e their economic growth of around 10% even through the worst of the recession (between Oct08-Mar-09), but it's suggested that whilst the rich & existing middle-class are getting much wealthier & that their economy is booming, they still rely on what we'd label "slave labour" & very few of the poor are making the transition to middle class there.
China’s economic growth has been built on cheap, exploitable labour but things have changed since WTO entry in 2001. China is now gradually away from being the world’s shop floor towards high tech industry and servicing just like Japan did with its economic miracle. The Labour Contract Law of 2008 has increased labour costs in the manufacturing sector by 25 percent and the minimum wage whilst not being fully enforced does exist. Whereas, in 2008, over 15,000 factories were closed in the Pearl River Delta as production was moved to nearby Vietnam and Bangladesh where labour is far cheaper.
That said China’s middle class is diminutive; the majority of China’s population still live in the countryside and are extremely poor. Though not to the abject levels recorded in the Maoist period – as since economic reform and opening up, China in a decade brought more people out of abject poverty than India ever has which is a damning indictment on the world’s greatest democracy. China’s poverty alleviation has been so successful that they meet the goals of the UN for halving poverty reduction 14 years ahead of the UN’s target for the developing world as a whole.
Also in regard to GDP growth, whilst China is probably now the worlds second largest economy the actual growth by percent should be taking with a pinch of salt. Reported that during the late 1990s cooking the books was rampant and GDP growth was always 2 percent smaller than actually reported.