- Hardcover: 240 pages
- Publisher: Wiley; 1 edition (March 27, 2012)
- Language: English
- ISBN-10: 111817206X
- ISBN-13: 978-1118172063
- Product Dimensions: 6.3 x 0.8 x 9.3 inches
- Shipping Weight: 12.8 ounces
- Average Customer Review: 99 customer reviews
- Amazon Best Sellers Rank: #1,382,388 in Books (See Top 100 in Books)
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The End of Cheap China: Economic and Cultural Trends that Will Disrupt the World Hardcover – March 27, 2012
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Q & A with Shaun Rein, author of The End of Cheap China
I first came to China in the 1990s and studied it as a graduate student at Harvard. At that time, the word "cheap" summed up China. Land prices and salaries were low and the quality of China's production was inferior. It was still difficult to find a decent job. When walking outside the gates of factories, you used to run into swelling crowds of unemployed workers with cardboard signs touting their skill sets in the hopes of finding a job. That has all changed in the last decade due to the job creation spurred by multinationals investing billions of dollars. Now the biggest obstacle to growth in China for most firms is finding talent even with China's large population.
What are some of the biggest economic or cultural disruptions happening now in China that people and businesses should pay attention to?
Too many businesses underestimate how fast costs are rising in China and how rising costs won't change anytime soon. In 2011, 21 of China's 31 provinces increased the minimum wage an average of 22%. The government has set a plan to raise the minimum wage by 13% annually for the next five years to spur domestic consumption and wean away the country's reliance on exports. Many companies might be forced to relocate manufacturing to lower cost countries like Indonesia. However, the reality is China's work force and infrastructure is far superior, so China won't lose its dominance in manufacturing. The resulting higher input prices will force companies to accept squeezed margins or they will have to transfer higher costs to end consumers. Instead of being a deflationary force in the global economy, China will export inflation to the rest of the world. Already import prices from China in 2011 in America were up 3.6%, the highest on record. Consumers around the world better get used to seeing higher priced products in stores.
What kind of global impact will "the end of cheap China" have?
Aside from higher costs, "the end of cheap China" means that China as a nation will become more powerful in global affairs which could cause more friction. Chinese companies will not only be investing more in countries like Canada to secure access to natural resources but Chinese brands will start selling products abroad and acquiring Western brands, as Chinese auto manufacturer Geeley with its acquisition of the Volvo brand. It also means China's government will take a larger role in global institutions like the United Nations and G20 in order to safeguard its interests. The key to China's rise as a superpower is to ensure that it is integrated enough into world affairs to reduce possible tension and to stop the fear-mongering and hysteria about China's rise.
"Brilliantly written" --Financial Times
"A Publishers Weekly Top 10 Business Book of 2012"
"Rein masterfully captures where [consumers] have been and where they dream of going" --Fortune
"Rein combines elegant writing and methodical research. Years of working in China have given him access to important players. Incisive interviews with billionaires, business executives, government officials, and migrant workers guide the pulse of the narrative.... essential reading." --USA Today
“Engaging. Full of vivid anecdotes from Chinese billionaires to senior party officials and even prostitutes. For any foreigners thinking about doing business in the Middle Kingdom, 'The End of Cheap China' is a good place to start" --Reuters
"Must Read" --Consulting Magazine
"A Lively Read" --Straits Times
"An Inside Look" --Industry Week
"Compelling, Engaging, Informative" --The Cayman Islands Journal
"Lively, Well-Written Book" --South China Morning Post
"Engaging, highly readable style with real-life examples from vast catalog of China research. For good measure, Rein wedded into China's elite, marrying the granddaughter of 1980s Politburo chairman Marshal Ye Jianying" --Asia Times
Top customer reviews
Shaun's perspective and analysis on various sensitive issues like : Chinese political system, corruption, environment pollution ,food safety scandal, meaningless investments with no growth (ghost towns), lack of innovation model, poor education system etc. have been really insightful. Each chapter of the book ends with a Case Study and Key action items , which as a consultant makes my day. The book offers many counter-intuitive insights on Chinese market derived from a thorough market research.
Shaun has bravely contradicted view-points on China of few celebrated commentators and forebode global executives on rise of Chinese brands in the global market. I fully subscribe to this oft scoffed stand and in my opinion, the emerging giants like Mindray, Goldwind etc. could very well bring in disruption in the global market.
I would recommend this book to anyone who is interested in China market and wants to understand the global implications of economic and cultural transformations in China.
The book takes an optimistic view of China's prospects, and explains the underlying reasons for doing so. There are numerous nuggets to be found and the book is a definite must read for those seeking a more balanced view than that typically proffered by China naysayers.
It is chock full of insights.
One other thing, which I should mention. Shaun lives VERY well in PRC. I.e. my vantage point in China when I go into the country is one of a very ordinary person. Shaun does have a view point as to the movers and shakers of PRC, which I do not have.
Hence our respective biases. I.e. most of the people whom I know are scientists in PRC, and although they at times are well provided for, there is a major world of difference between their perspectives , i.e. of often grinding hard work of research with verification of results a top priority (as it is in ANY country) as balanced against the expectations of the exceedingly wealthy.
Shaun does touch upon another issue, that of the food quality issues in PRC. I for one have taken in medicine from America to PRC scientists in order to insure top grade medical treatment of members of their family. Shaun should in a future book explore the state of food and medical security, in PRC, and offer constructive suggestions as to its resolution.
Final comment. I have never met a Chinese man/ woman of the great wealth status Shaun has remarked upon, in his CEO introductions. Most people of that sort would ignore me completely as not worth their time in PRC, and Shaun should in a future book give an introduction as to their respective influence in PRC, and their relative impact upon the Chinese economy.
In writing all of this, I acknowledge the completely different spheres of life, Shaun and I have occupied in our stays in Chinese territory. Mine is of middle income scientists, and the universities, while Shaun is of the CEO elite. I suspect that the truth and the genesis of China's future prospects lies somewhere in between his views and mine, which although favorable, are not of the money making opportunities in PRC.