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For Now, Santa’s Little Helpers Are Still Chinese

Vietnam and Indonesia may be the future, but China is content being the present.  At least that’s the tone of the Canton trade fair, according to the FT:

The massive trade gathering—which is so large it is held twice a year in three phrases—is at the front line of leading indicators on China’s export prospects.

Having been in Guangzhou during this year’s fair, I can vouch for the health of China’s export markets.  Hotels were stuffed with buyers from all over the world in town to make deals with manufacturers.  I don’t know when I’ve heard so many languages in hotel elevators, or had to fight so hard to get a seat at the breakfast bouquet.  A lot of Brazilian kids can expect a big Christmas, by the way: there were almost as many Brazilians in Guangzhou last week as in Miami.

With the holidays just around the corner, this is an especially good season for Chinese manufacturers.  The Communist Party might not care much for religion, but China appears to be a pretty big fan of Christmas:

At this year’s October fair, the third phase of which begins Monday, Raymond Kam, head of an $8m-in-revenues Christmas decorations company, reported that he had had 30 per cent more customer enquiries for Christmas next year than he did at the Canton fair’s April event.  “Christmas is still Christmas.  People want to enjoy it,” says Mr. Kam.

For now, China is enjoying having customers who enjoy Christmas.  Chinese manufacturing and exports are still growing; there are plenty of potential workers in China who are as hungry for manufacturing jobs as their Vietnamese, Indonesian or Bangladeshi competitors.

Everywhere I went in China, people are worried about the ability of the manufacturing economy to provide enough jobs — and better wages — for the hundreds of millions of Chinese heading for the cities in the next few decades in search of better lives.  There’s an awareness that low wage manufacturers in other countries are nipping at their heels, and there is a lot of discussion by government officials and others about the unsustainable nature of China’s export-oriented growth strategy.

What I don’t think many people in China yet fully understand is that automation will make it much harder for China to create new manufacturing jobs as it seeks to move up the value added chain. As labor becomes more expensive, it makes more sense to replace human hands with non-unionized, non-raise-seeking robots.

For now, making Christmas decorations and stocking stuffers for kiddies all over the world still works for China.  But time is running out; Santa’s helpers are going to have to find new ways of making a living.

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