the Deindustrialization of China
While many parts of China continue to industrialize at a rapid pace, a few parts have already begun to experience Deindustrialization.
Reports from Korea speak of the problems facing some 7000 Korean textile and shoe manufacturing companies who located across the Yellow Sea to Qingdao in the 1980’s in search of low labor costs. These labor-intensive manufacturers are now experiencing labor shortages, large increases in labor costs and in indirect costs such as employee benefits including medical/dental insurance and pension plans. Some have already closed their doors, while others are relocating to Guangxi, Xian or even to other countries in south-east Asia.
Deindustrialization isn’t necessarily a bad thing - Qingdao can now move on to more attractive sectors such as services, high-tech and research. The end-game, however, remains unclear - in 120 years time, after the entire world has deindustrialized, the question becomes: what will there be left to sell and who will want to buy it? The closest approximation to an answer for that question is probably to be found in the country that industrialized first, namely Great Britain … and so it seems that all of us will eventually be selling insurance and providing banking services to one another, with a bit of light manufacturing on the side.
Korean Manufacturing in China: the End of an Affair? - Chosun Ilbo, May 25, 2006
