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| Heleen Mees |
China and India are not only adding potential consumers to the market, their integration in the global economy has added a large labor force, leading to the marginalization of labor, writes NYU economist Heleen Mees in Project Syndicate.
The integration of China and India in the global market added more than 2.3 billion consumers and producers to the global economy. They entered as producers of core goods and services and as consumers of food and energy.
The labor glut in China and India has put downward pressure on wages in the rest of the world as well because of international trade and the ever-looming threat of offshoring. Even if China’s labor supply eventually dries up, the rise of technologies may still displace large swaths of workers.
Profits as a share of U.S. GDP have doubled since China’s entry to the WTO in 2001. The price of a barrel of oil has tripled. According to Chicago University’s Loukas Karabarbounis and Brent Neiman, companies’ share of private savings rose in aggregate by 20 percentage points between 1975 and 2007 across 51 countries, while labor’s share of GDP shrank by five percentage points in aggregate in countries where corporate savings rose.
The marginalization of labor contributes to the shortfall of demand, which in turn accounts for weak business investment. In the 2000's a massive credit bubble kept consumer spending afloat, offering only temporary reprieve. Now the pressure is on governments to act as spender of last resort.More in Project Syndicate.
Heleen Mees is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.
The story of China going global is a huge story. The +China Weekly Hangout addressed on aspect, China's media conquering Africa, in its session on March 7, 2013, including veteran journalists +Eric Olander of the China Africa Project, and +Lara Farrar, previously working for both the China Daily and CNN. Moderation by +Fons Tuinstra, president of the +China Speakers Bureau.
Is China's internet back to 'normal'. That is the question the China Weekly Hangout will address on Thursday 25 April. In December we looking into the dreadful internet connections so many companies and individuals were suffering from, when even the VPN's came under attack. We hoped that would inprove after the power transfer to Xi Jinping and his crew would be completed. Has that happened, and how do people on the ground expect the internet will serve them? You can read our announcement here, or register directly at our event page for participation. Below our December 20, 2012 session with participation of +Sam Xu, +John R. Otto, +Gabriel Rüeck and +Fons Tuinstra; are the recent hiccups just tests? Has China a kill button for the internet and will it use it? Or will there be a two-class internet, one for corporate users, and one for home users?
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