Wage Increases Could Sound "Death Knell" For China's Production System

Noting that Foxconn and Honda offered their employees in China "big wage increases" to "dampen labor unrest," the Christian Science Monitor (Ford) says the hikes also "signal huge changes in the way 'the workshop of the world' is feeding global consumers." According to experts, rising incomes "are sounding the death knell for the production system that has fueled much of China's phenomenal economic growth for the past three decades." Rather than "relying on huge numbers of workers making miserable wages at unskilled jobs, and churning out cheap exports, the government is keen on moving up the value chain." Simultaneously, rising salaries "are laying the foundation for another seismic shift in China's development model, as the government seeks to base economic growth more on domestic consumption and less on exports." Hat Tip: NAM