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| Employees work on the assembly line at the Foxconn plant in Shenzhen, China. Photograph: Bloomberg via Getty Images |
The Miami Herald
By Andres Oppenheimer
March 3, 2012
Citation: http://bit.ly/wagehikes
Good news for Latin America: wages in China, Vietnam and other Asian countries are rising faster than expected, leading growing numbers of multinational firms to move their manufacturing plants to Mexico and other countries closer to the U.S. market.
Citation: http://bit.ly/wagehikes
Good news for Latin America: wages in China, Vietnam and other Asian countries are rising faster than expected, leading growing numbers of multinational firms to move their manufacturing plants to Mexico and other countries closer to the U.S. market.
According to economists, Chinese salaries are destined to increase for decades to come with the growing appreciation of Chinese currency, higher educations standards, and a declining workforce. Most multinational companies will keep plants in China to serve the domestic market as well as neighboring countries in Asia, but will move their export-oriented plants to other parts of the world. The author contends: “Either way, Asia’s rising wages present a fabulous opportunity for Latin America.” He argues in order to lure foreign manufacturing plants and to export increasingly sophisticated goods and services to China, Mexico and Central America will have to reduce their violence rates, and all Latin American countries will have to dramatically improve their education systems, which currently lag far behind those of their Asian competitors. He concludes that Latin American countries that take advantage of this golden opportunity will do great in coming decade and they will have Asia’s rising wages to thank.
In order to persuade China to move plants to Latin America, these countries will have to make adjustments to their educational initiatives to develop a workforce capable of providing these “sophisticated” goods and services. I would argue it is too soon to know what these educational adjustments will look like, but not everyone thinks China’s economic involvement in Latin America is a positive according to an article by Univision: “China in Latin America: Should we be worried?” The article points out China’s investment in Latin America has increased 400% during the past decade which creates a new reliance on Chinese commodity demand and China’s state-run companies, and now additional goods and services. This “golden opportunity” sounds more like a dependency model and its affect on education will run deep. Will Mandarin be the second language of the next generation in Brazil? Will vocational studies focus more on technology? Will China take over in the exploitation of Latin American? The Univision article argues this isn’t a “win-win” situation because Chinese companies do not have to follow the same rules as those from the U.S., Europe, or even Latin America leading to general corruption and increases the likelihood of bribery, smuggling, and poor environmental practices. I conclude Latin American should access this opportunity wisely before overhauling educational practices to cater specifically to the Chinese economic demands.
Evan, these are wise comments. Last year, I remember my friends in Costa Rica telling me that China was donating money for a new soccer stadium, and I remember thinking, why? I read an interesting article about China' so called "Stadium Diplomacy" (see: http://www.neontommy.com/news/2011/10/why-china-building-stadiums-africa-and-latin-america). Turns out that stadiums are another form of aid. This is globalization at its finest, but as you've highlighted, Latin America would do well to access these opportunities with a critical eye to ensure that they are not going to be taken advantage of or pushed around.
ReplyDeleteI love (sarcasm) the beginning of this article -- As if exploitation of labor is "good news" for Latin America! Sigh. As if there weren't enough Pali's in Nicaragua (and now yes "Super Pali's!" -- don't forget: simple los precios mas bajos splattered across entranceways, yes, owned by Wal-Mart). As if China really cares about the Mexican people and "other countries" as Oppenheimer put it. Idiot, I say. Sure, these "other countries" have to reduce their violence but what a severe statement, as if bandidos will turn over their guns and drugs to work in manufacturing. Excuse me as I let out a strong: YEAH RIGHT. And stadiums Jeannie? Now it's obvious: let's distract the people as we slowly exploit them. Or, let them play football?? Which one is it?
ReplyDeleteAs I've made note in my other comment on Evan's entry regarding the ranking of Latin American universities by the London company, this dependency model of development, if it proceeds, will likely lead to decades of dependency on China -- creating deeper pockets for the Chinese at the expense of the people of Latin America. This sounds like a scam. With a lack of regulation, Evan is right, I do believe it will lead to a greater increase in crime, especially when we consider the rate of corruption as it stands!
Great topic, Evan. I think you've definitely found a controversy worth investigating and it reminds me of the post about Japanese investments in Nicaragua. I will say that you need to make the relationship to education more explicit here. For example, if it's just about fixing the education system but the fixing leads to assembly-line kind of education, and not about students really learning anything, that's problematic. But that's the kind of philosophy that human capital theorists would favor. Good food for thought.
ReplyDeleteAlso, you repeat the following statement twice:
According to the author, in order to snatch up this “golden opportunity” Mexico and Central America will have to reduce their violence rates, and all Latin American countries will have to dramatically improve their education systems.
Be careful to read carefully before posting in the future.
Thank you for your comments Mariam and for letting me know about the repetition in my post. I went back and edited the entry.
ReplyDelete