“The End of the Chinese Miracle”
After years of big wage increases in China, the supply of cheap labor is coming to an end. The migration of rural populations to cities, which in practically no time created over 250 cities with over 2 million inhabitants, is also coming to an end.
As the cost of labor has soared, the manufacturing base is now migrating to cheap-labor countries like Vietnam, leaving less work in Chinese cities for migrant laborers. With few options left, they’ve started to return to their villages. This leaves China with massive challenges, just when its debt-burdened economy can least afford them.
Given China’s size, “the demise” of its economic-growth model has “huge implications for the global economy,” according to the Financial Times’ fascinating, informative, and dark documentary, “The End of the Chinese Miracle.” It’s only 15 minutes, and worth every second of it:
For the wealthy Chinese, buying a home in the US or Canada has been an effective way to launder some money and get their wealth out of harm’s way. In the trophy markets on the US West Coast and in the Canadian cities of Vancouver and Toronto, rumors of a massive influx of Chinese money have swirled with growing intensity for years. In Vancouver, 33% of sales are to Chinese investors, according to new estimates of National Bank. Read… Desperate Chinese Investors Flood US, Canadian Housing Markets, But Real Numbers Are Taboo