Christopher Kolmatycki

Entrepreneur, Marketing Expert, and Shower Singing Enthusiast

Comments Off on China’s Minimum Wage Is Changing the World

Chinese Factory WorkersInspired by the APEC conference having just finished in Hawaii, I thought I’d make a post on an article I read a few days ago.


Interesting bit of news I read the other day and I’m sure I don’t understand it as well as I should, but China’s Guangdong province has given a 20% increase to worker’s minimum wage.

With the province’s heavy emphasis on manufacturing it could mean a number of things for both the Asian and Global community.  Though the 20% increase in wages will not have as large an impact as the percentage points indicate (the wages are already so low), I think it’s more of a sign of things that are already happening.  Look on the label of your shirt.  Chances are production has either moved to India or another South East Asian country.  China is making a push to exit its image as a manufacturing province and move towards higher end business.

What does this mean? Though still staggering, we are seeing fewer ‘Made in China’ labels and tags on the products we buy.  Already dealing with suspect quality and human rights standards, we’re going to see less manufacturing done in China and more likely in the South East Asian countries.  Having recently returned from Indonesia and Malaysia, and having spoken to several ASEAN ambassadors, I can attest that this is something the community has been working towards for some time.  Countries such as Vietnam are especially poised to take advantage.  With a special love in my heart now for Indonesia, I can only hope that they can take advantage of this opportunity and begin to slowly and solidly push towards developing a much needed middle-class.

Without having been to these nations, I don’t think Canadians can truly comprehend what is possible in terms of opportunities for these ASEAN nations. What is a bit more comprehensible will be the choices Western companies make in whether they keep their operations in China and eat the cost or pass it on to the consumer, move operations to places with cheaper labour, or even (unlikely in my opinion) shift production back to Western countries.  This isn’t exactly a pivotal moment, but it’s an obvious sign among many that things are changing in Asia and power is shifting ever so slightly.

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