If you worry China is going to take over the world economy and from now on we’ll all have to make our livings either flipping burgers or working in call centres, two news stories this week bring reasons for hope.
First, The Wall Street Journal reports sharply rising Chinese wages, with countries throughout Asia following suit, some to prevent labour riots. That doesn’t please those of us who buy Chinese products but don’t ourselves compete directly with Chinese workers. But if you are in competition with China, it means that country’s wage advantage will diminish.
Second, and even more encouraging if you fear what a recent potboiler calls “Death by China,” The Economist reports that the People’s Republic is moving into innovation policy in a big way. “China’s leaders know” that however astonishing their country’s success at building competitive processes it hasn’t been very good at creating new products and so they’re “pouring billions of dollars into research and development.” Hallelujah! If there’s one certain way for a country to reduce its international competitiveness, it’s to spend billions on innovation policies.