End of Chinese Miracle
By Dyske March 28th, 2016
Since the wage in China is going up, many businesses are now moving their factories elsewhere like Vietnam. This short documentary explains the impact of this shift on the Chinese societies as well as on the global economy.
Exploiting arbitrage opportunities in the labor market can have a positive impact in that it can boost the economy of poor nations. Since the arbitrageurs will always look for the cheapest economies (therefore the poorest in most cases), those in need are automatically found and taken care of. But the problem we are facing now is the speed of change. The products and services in demand shift very quickly these days, which means our skills and knowledge also have to keep up with that speed. But we humans cannot indefinitely keep increasing the speed of adapting to change, but the market collectively can keep getting faster indefinitely.
This is easy to see even within ourselves. It does not take much effort on our part to consume new products and services, so we can quickly shift from one product to the next. But on the production side of the equation, the speed at which we can learn to produce a new product is limited by our ability to acquire new skills and knowledge, which has a hard limit, just as we cannot forever keep running faster.
This is big part of the reason why the labor force is getting younger and younger, because the younger people can learn new skills quicker. The older people have advantage in more intangible aspects of business like leadership skills, negotiation skills, market insights, and strategic thinking. But not many jobs with these skills are available or needed. So, what happens to the rest of the older people? You see it in this documentary.
The half-life of our skills will keep getting shorter and shorter. Eventually, we’ll reach an absurd point where our skill will become obsolete by the time we finish learning it. To avoid this rat race, everyone will try to be at the managerial level where they can buy or discard other people’s skills as the market shifts rapidly, but the competition at that level will become impossibly stiff. I’m not sure what the solution is.
