Tag Archives: China

Human Geography: China Seeks Even Cheaper Labor

Embed from Getty Images

Living in the United States it has been a given for many years that so many of our goods are being manufactured in China. As a classroom activity my students often look at the “Made in…” labels of our clothing and the manufacturing stamps on goods, without question China is in the lead for most times mentioned. The reality is that China has been in its “Golden Era” of industrial growth long enough that they have started to see some of the long term benefits come to pass. Their GDP per capita has grown as well as the average standard of life.

As economic conditions improve in China so do the expectations of their workers. They are beginning to demand higher wages and better working conditions. Chinese manufacturers are realizing that their employees are starting to request the same things that American workers demanded generations ago. Just as American manufacturing started to do in the 1970s the Chinese manufacturers are looking to send jobs to other parts of the world with cheaper labor.

I recently read an article in Bloomberg News about a Chinese shoe company that has set up a factory in Ethiopia. The company did not attempt to hide that they specifically set up an operation there because of the remarkably low wages the Ethiopian workers would accept. The average monthly salary in the shoe factory was approximately $40 a month. In contrast, the average factory worker in China gained over ten times that amount.

While the lure of cheap labor may cause some Chinese companies to relocate their operations it will not be smooth roads to achieving success. Smooth roads are actually part of the problem, or more specifically the lack of smooth roads. The Chinese manufacturers that have already moved to Ethiopia have had numerous issues with transportation and their profits have been seriously damaged as a result. There is mounting pressure on the Ethiopian government to commit money to infrastructure to draw in foreign investment, as is often the case in the African countries they must now choose between immediate relief for humanitarian struggles or temporarily ignore these issues in an attempt to build a long term solution through economic growth.

Human Geography: Economic Development Alternative to the World Bank?

Embed from Getty Images

Last week political leaders from Africa, Asia, Europe, and Latin America gathered in Brazil for an important global event that was not the World Cup. It was a meeting between the heads of state from Brazil, Russia, India, China, and South Africa, collectively referred to as the BRICS. These countries were not thrown together randomly for the sake of creating an acronym that sounds intimidating, they have been placed in a group because they are considered the emerging markets, this means that they are transitioning from being part of the poor world to increasing their level of economic development. The BRICS have seen their role in the global economy grow for a variety of reasons: Brazil and South Africa as regional leaders, Russia as a resource center for Europe, India for its growing role in communications and as the future home of the largest population on Earth, and lastly China as the manufacturing center of the world.

The BRICS Summit achieved a major agreement between the five countries, the establishment of the New Development Bank that will be headquartered in Shanghai. The main objective of the bank will be to provide an alternative to the World Bank and International Monetary Fund for countries looking to borrow money and invest in development and infrastructure. The BRICS see the new bank as vital to economic growth for the poor world as it would shift power away from the US and Western Europe who have dominated the global flow of money for centuries.

One of the key elements required for success on the AP® Human Geography Exam is being able to identify the differences that exist between the less developed world and the rich world. One of the common themes for this course is that as living standards improve in parts of the poor world and globalization emphasizes their role in the world economy, the power and influence of the less developed regions increase. As a human geography student it is critical to analyze the economic and political factors that make the BRICS desire to reach equal footing as the traditional powers. Brazil, Russia, India, China, and South Africa see the establishment of the New Development Bank as an immediate and critical step towards leveling the playing field with the rich world.