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Labor Shortage Complicates Changes in China's Factories
Keywords:
Tags: United States, China,
The shortage of labor will make the transition to a workweek of less than 60 hours for existing factory workers in China difficult, say experts. The transition to better working hours will take some time to be implemented as required by China's new labor laws and public pressure in the U.S. and China.
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Conditions at Hon Hai and a strike at Honda are part of a changing picture of worker dissatisfaction with wages and discipline at Chinese factories. The period of low prices and worker discipline of the kind that prevailed for several decades of industrialization appears to be closing. The Chinese government is also having second thoughts as America and Europe are no longer the growing markets they used to be, and as it weighs a policy shift to domestic consumption.
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How much of the iPhone is manufactured in China? 3.6% by China's Hon Hai, but this does not account for South Korean and Japanese suppliers using manufacturing bases in China. German suppliers also have Chinese factories. Production costs at Hon Hai itself are rock bottom, as a result the other parts would be too expensive if not manufactured in China. Reliable statistics would include the value of all suppliers who build i-phone parts in China and take into account the impact on the US of manufacturing jobs that would otherwise be available in the US.
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China's policymakers are shifting the economy from a manufacturer of low cost goods by increasing worker protections, wages and environmental controls towards more innovation and technology added product which are made respecting workers and the environment. Inflation and the stronger yuan are speeding up this shift.
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