On the path to a service economy: made in post-China™


Ashok Kumar and Alex Gawenda look at the implications of China’s rise for the organisation of global production and the labour force

“Those jobs are gone and they’re not coming back” snapped Apple Ceo Steve Jobs. The scene was a 2011 dinner held at the home of venture capitalist John Doerr in Woodside, California, a short drive south of San Francisco. Those on the guest list–the aforementioned Jobs, as well as Facebook’s Mark Zuckerberg, Oracle’s Larry Ellison, Yahoo’s Carol Bartz—presented a veritable murderer’s row of the billionaire geeks who, in recent decades, had prescribed the American Dream its glasses; and all were gathered to discuss, over champagne and snorting laughter, the future of their industry and its relationship to the domestic economy. The question–innocent enough, carefully phrased—of whether the iPhone might someday be manufactured in the U.S., where it was conceived and developed–and indeed where many earlier titans of tech, like Thomas Edison and Henry Ford, had flourished and employed millions of workers–was put by perhaps the only non-CEO at the table: President Obama.

“They’re not coming back.”

And they needn’t. For as today’s ever-more-enlightened corporate officers, such as those of the Silicon Valley coterie described above, are concerned—and they’re in agreement with virtually every ‘guru’ of Wall Street and swami in The City you want to name–economic nationalism—entailing as it does notions of regional financial security and job rootedness—is just one more material attachment; and international capital–she is a rolling stone. Local politicians, meanwhile, with their sepia-toned rhetoric of “reshoring” and “bringing back” these industries, which had anchored and maintained so many of their constituents, are simply playing the part left to them, and invoking nostalgia to assuage present pain, while avoiding the acknowledgement that it’s largely out of their hands now. There are of course numbers out there, factual and positive, to trumpet, of low-yield, capital-intensive jobs, conjured up out of youthful—and yes, high tech–industries since 2010, and these have certainly furnished real employment to real Americans, but they are, on balance, paltry, and no rejoinder to Mr. Jobs’ bald-faced observation. The era of ‘Made in America’ remains an all but closed chapter in American history—and, interestingly, its Chinese analogue now appears, in all aspects, on the same path.

Made in China

Foreign Direct Investment (FDI) in China began shortly after the industrialized nations underwent a crisis of accumulation that extended from 1965 to 1982.  What ascended out of the crisis was the period of “neoliberalism” which saw profitability rise between 1982 and 1997.  The emergence, movement, and on-going reconstitution of globalcapital was prefigured and circumscribed by the antagonisms of labour, a pattern consistent with 150 years of industrial history.

When out of the mass of productive powers thrown together for the war effort there emerged a much invigorated and enlarged labour movement, unwilling, in the decades following, to retire of itself—after defeating Hitler and winning welfare–into passivity, capital—well, capital became understandably anxious. Capital reacted to the labour strife, and falling profit rates, through the creation of labour-saving technological innovations, “technological fixes” but with a spike in union density, wildcat strikes and  wages, (and consequently) higher labour costs resulted in a “profit squeeze” in the US, and a reorganization towards lean production of deregulation of capital and labour markets, concessionary union contracts, and mergers and acquisitions.

The postwar boom had not been slowing in the 1960s, exactly, but the working and middle classes continued to demand a larger share of it.  In reaction, the proprietors of capital decided, in short order, to take their dollars and pounds, marks, francs, and lira, elsewhere; to void trade barriers, wherever protective of labour, and inaugurate a bonanza of deregulation that would cast all of Western labour into direct competition with its as-yet unorganized counterparts. But a good deal had already been achieved, in the way of: solidarity, wage increases, labour laws, a social safety net, inflation in the political costs of smashing up peaceful protests. To counter these remaining victories: a tremendous algal bloom in consumerism, reabsorbing wages through the tranquilizing allure of tchotchkes, purchasable on credit; a spiritual blight facilitated by a parallel increase in the ubiquity of advertisements—on TV, in the subways, on the buses, in the stadiums, by the highways, in the neighborhoods–and eventually on the internet, where they now blot out the sun. Globalization is a phase in a historical process, and can be reversed no more than could the industrial revolution.

So while the famous diplomatic mission of 1972–when all of contemporary Western media descended onto Beijing to witness America’s grand gesture of good faith–has since passed into official record with Richard Nixon’s jowly charm being the thing what done the trick and made sociable a hardnosed nation, the stakes were much higher than simply bringing another party in to foot conference lunch bills; capital needed new frontiers. With a few concessions on the Taiwan question, it got them. Let it be known, then: before Ronald Reagan’s stiff upper lip could overthrow the U.S.S.R.’s Evil Empire, and raise the Iron Curtain, Nixon’s canny ability to withhold racial epithets for a few days had itself reduced the Bamboo Curtain to toothpicks, packaged for export. “Rang yi bu fen ren xian fu qu lai,” announced Deng Xiaoping in 1978, “Let some people get rich first.” (And “some” did.) Billions of dollars of Foreign Direct Investment (FDI) inundated the countryside, summoning out of China’s vast reserves of unorganized labour and raw materials a great dread empire of toilers and smokestack-afforestation; a real life Mordor, forging acid-washed jeans by the ton. And within a scant few decades China had come out atop the world economic standings–at the number 2 position; a scoreboard-don’t-lie moment of apparently objective triumph for Chinese leaders and their neoliberal bedfellows.

But the Chinese working class, so often caricatured in the West as either globalization’s passive victims or its active vectors—as its stoic assemblers of sneakers or its eager army of blacklegs—have, in recent years been exploding this mythology, and asserting themselves in ever-higher numbers. Younger workers, who moved from their villages in the interior to the industrial metropolises then rising in the southeast, during the 80s and early 90s, are proving rather uppity. As Duan Yi, a Chinese labour activist, attests, “The new generation of workers born in the 80s and 90s are not like their parents. They want to make a life in the cities. So they are becoming better organized and more rebellious than ever before.”  Chinese government figures paint a picture of burgeoning upheaval: the incidence of mass protests between 1993 and 2003 grew six fold, from 10,000 protests to 60,000; from some 730,000 protestors to over 3 million.

Tellingly, the labour costs for big firms during this same period tripled—encroaching upon and often flattening profit margins. Indeed a 2012 survey conducted by the American Chamber of Commerce found only 73% of U.S. based firms in Shanghai to be profitable–down from 78% in 2011 and 79% in 2010: an ongoing slide the firms attributed to rising labour and logistical costs, a shrinking labour supply, and the development of domestic competition. Almost half of manufacturers and importers in another survey of the same year said they would, in light of the same reasons, consider moving out of the country altogether–of which 26% did. China is in the throes of a major shift in the balance of power between labour and capital, transforming producers into consumers, a deficit-West with a surplus-East.

And this bumper crop of wildcat strikes and work stoppages, which has only accelerated since 2004, is all the more significant for its illicitness in the nominally socialist state—where independent unions and strikes are in fact illegal, and all grievances—concerning workplace conditions, wages, the appointment rather than election of factory representatives—must be mediated through the All-China Federation of Trade Unions, or ACFTU. But the usefulness of that particular legal channel is demonstrated by the recourse en masse to extralegal means.

Whereas previous policy dictated that the nail that stands up get the billystick, recent events have shown government goons being, most ominously, called off. But this goon-leashing would be in line, apparently, with what a 2012 IMF report concluded was a large-scale return–accompanying not only rising labour cost but rising raw materialcosts as well–of the Chinese economy to services and away from investment and export-led growth; a transition in which the Chinese working classes figure also as consumers, whom must be cultivated, and not as just so much brute labour. And accordingly, 2012 marked the first time that China’s working population shrank (by 3.5m).  At this rate many economists, even in the IMF, predict that China will reach a point of labour scarcity soon, the so-called “Lewis turning point”, an inevitable developmental phase when wages surge sharply, industrial profits are squeezed, with a steep fall in investment.  The current process in China is similar to the crisis of the 1960s and 70s.  A workers’ struggle leads to higher wages and broader social reforms, resulting in diminished labour output and higher costs of maintaining workers in production as well as an increased “social wage”, squeezing profits further.  In the final phase: capital innovates by automating and/or leaving for a more profitable terrain.  The transition may deepen the crisis of accumulation in the “real economy”, at least in the short term, for international capital. Capital depends on the Chinese State to continue its role as comprador; a shift away from this configuration undermines industrial capital’s bottom-line.


And the oxen-cum-cash cows have been fattening. While consumer debt in the U.S. has itself grown a none-too-reassuring 10% in the last half decade, in China—which now has more active credit card accounts than the U.S. has citizens—it has ballooned an astonishing 67%. Concurrently, GDP output from services–transport, retail, real estate, etc.—is reaching new heights, and in the past 3 quarters has outperformed industrial sectors for the first time since 1961.

Such is the speed of this transition–from the world’s supply-side workshop to its next great marketplace–that manufacturing balance sheets in China and the U.S. may soon converge, and the twain to meet as early as 2015—at least below the Mason-Dixon, according to the Boston Consulting Group (BCG). In evidence: the relative momentum of Chinese workers, who have been winning real medium wage increases of 17% per annum since 2009 taking home nearly five timeswhat they were in 2000, while their American counterparts have annually coughed up 1.5% and the real value of UK workers fell to 2003levels in 2012.   And since wages, which account for 20-30% of manufacturing costs, were in 2011 only 30% lower in China than in the lowest-paying American states, that leaves for bridging a mere 10-15% gap. Once warehousing and logistical considerations are factored in, says BCG, respective profits, too, approach–and will by 2015 achieve–parity.

But this isn’t to suggest that a downturn in Chinese domestic industry will mean a consequent uptick in America’s, and—to their own amazement—the realization of politicians’ promises—because, as former U.S. Labour Secretary Robert Reich has recently written, “if we didn’t have to compete with lower-wage workers overseas, we’d still have fewer factory jobs because the old assembly line has been replaced by numerically-controlled machine tools and robotics. Manufacturing is going high-tech.” Some of these increasingly automated capital-intensive production that have already returned to the US have concentrated jobs in a narrow “highly skilled” class, reflecting the West’s intensifying economic inequality, and a rapidly drying-up consumer base.  Labour economists predict that this accelerated ‘technological fix’ of laboursaving automation is, and will continue to, “hollow out” the job market in the US, replacing living with dead labour, further substituting the material for the immaterial.  Even Chrysler’s much-ballyhooed “Imported from Detroit” campaign, with its promise of rejuvenation if the Heartland just toughs it out, is, by the company’s own admission, “[not] intended to be literal.” What’s left then for the Joe Schmoes, whose jobs, if they aren’t being exported, are beingincreasingly colonized by machines?

Manufacturers in the east and west will no doubt be following Apple supplier Foxconn’s example to replace a million workers with a million robots within 3 years to “cope with rising labour costs.”  In recent years the world’s largest contract manufacturer of electronics and China’s largest private-sector employer, Foxconn, has made global headlines after a series of suicides and labour protests.  In February 2013, Apple stocks tumbled by 2.4% after Foxconn’s announcement of a hiring freeze, announcing that they will be opening a 10,000-worker facility in Brazil whilst at the same time committing $10 billion to open factories in Indonesia.  This dwarfs Apple’s high-profile announcement of $100 million of investment in high-tech capital-intensive with a skeletal labour force operating to operate the machines in the US.

The rostrum set has their answer: learn to program, says David Cameron; “take a shot, go for it. Take a risk. Get the education. Borrow money, if you have to, from your parents. Start a business,” says Mitt Romney—just take on additional debt pursuing additional training, which you may have to do again many times before you retire, if you can retire. Or become a CEO. Easy peasy.

But skilled labour (which includes programmers and other degreed grunts, but also the “immaterial” sectors, comprising the creative departments of advertising, research and development, and so on) isn’t immune either. Their white collar domains–which were enlarged during industry’s decline to accommodate the new service economy, and cultivate its markets while managing a new and growing bottom floor of McJobs–are contracting as overseas markets mature and local workers move up the chain. And if the younger, high-tech elements have been insulated from this reshuffling, it is not owing to any especial significance in their work, but to a saturation point that has yet to be reached–and the lingering necessity for grey matter in the computer world.

And as the public sector—the West’s last redoubt of union power–suddenly finds itself besieged by state and local-level politicians, eager to turn economic crisis into opportunity and please big donors while marginalizing opposition blocs, the Keynesians—right on cue—come running over the hills, repair kits in tow. No, no, no: re-invest in the public sector! Rehire those laid off cops! Build bullet trains! It’s the only way to staunch job outflow and breathe life again into a moribund economy—and isn’t that what we all want? Sorry, but this ain’t your father’s welfare state, Paul Krugman. Deregulation has gradually rendered Keynesianism a lost cause. With little to no red tape holding it to a social contract or national allegiance, capital is free now to get its profits wherever it finds them. Thus, the present crisis differs not in degree but in kind, and—here comes Michael Spence with the cold water—“[a] structural problem demands a structural answer.” Government packages only restore pre-crisis demand temporarily, and are, “unlikely to generate the escape velocity needed to get out of the jobs hole,” because, “non-tradable job growth can’t mask the declines in the tradable sector anymore.” Steve no-Jobs wasn’t making it up.

Further cementing this redistribution of jobs and industry, from the U.S. (and Europe) to capitalism’s suburbs, is a shift in purchasing power: not only has the dollar been depreciating for a decade, but a full fifth of U.S. household annual income today goes to servicing debt—instead of, y’know, buying more things. Emerging markets, however, are entering consumer society’s first bloom; and strike-won wages there just beginning to disappear into iPhones and cineplexes.  Years of wage suppression in the West predicated on a neoliberal ‘social contract’ of cut-rate Chinese goods are in a process of mutation. As Bruce Rockowitz, CEO of Li & Fung which handles 4% of China’s exports to the US, claims “It is the end of cheap goods,” and that none of the alternatives will come close to curbing costs and inflation like China. “There is no next” after China, says Rochowitz, predicting that the price of goods will rise by 5% per annum, optimistically, and that Li & Fung’s sourcing operation has already seen annual price increases of 15%.

The twilight of the spatial fix

Though, the question of ‘where next?’ persists, if these territories—Indonesia, Peru, Mexico, Eastern Europe—mature into service economies, will capital nest its factories and convert raw materials and labour into finished product? Africa, populous as it is, lacks the readymade infrastructure to support the logistics of large-scale manufacture. And though Vietnam and India, have variously beentouted as the “next China,” the real truth in these prophecies, it turns out, has less to do with their inexorable transformation into tomorrow’s workshops for the developed world, churning out new products by the tanker loads, than with their active resistance to such a future.

While China undergoes a labour shortfall, the UK and US have a burgeoning surplus population of unemployed or underemployed contract workers, aptly captured in the title of a 2012 Forbes article “Careers Are Dead. Welcome to Your Low-Wage, Temp Work Future” with 40% more people holding temp jobs since 2009 and the Bureau of Labour Statistics stating that three out of five new jobs created are part-time and low-wage with no possibility of progression.  A new generation of workers can look forward to lives marked by uncertainty and precariousness.

As a consequence of increasing labour costs the price of consumer goods in the industrialized economies will rise, coupled with mushrooming debt levels, falling real wages, a downward resetting of asset prices, accelerated automation of both the service and industrial sector and a reduction of debt-financed purchases, with the net effect of plummeting consumer-buying power. Even with the continued offensive by the state to attract investment and profitability, there is no policy that will benefit both the proprietors of capital at the top and the labourers at the bottom. Any plan that expands the workers’ share will undermine profitability, but without consumer spending the crisis will remain. The system weighs heavy by the contradictions embedded within it

While China is on a path to a service economy other emerging markets are turning export-oriented production inward towards domestic consumption.  In the US evolving ‘technological fixes’ exacerbate the crises of overproduction with dwindling options to divert it within the “real economy”.  The post-industrialized West should take heed: ‘those jobs are gone and they’re not coming back.’ In the 1970s neoliberalism’s raison d’etre was the overtake of labour by capital, a process of annexation that continues with today’s crisis.

David Harvey says that “capital never solves its crisis tendencies, it merely moves them around” but that “if the spatial fix is negated… global crisis in inevitable.” As capital continues down the path of least wages into ever-obscurer corners of the globe, following ever smaller returns, while leaving mobilized whatever labour it presses into service, it’s bound to run out of easily exploitable room; the spatial fix is a vanishing frontier, accelerating toward obsolescence.

What then? Evolution or revolution: history.

Ashok Kumar is a PhD student of Labour Geography at Oxford University. He tweets @broseph_stalin.

Alex Gawenda is a Chicago-based scrounger who writes sometimes.[1]

[1] Important insights and contributions from Joel Feingold

Originally posted at www.counterpunch.org on 14/6/2013 and is cross-posted with permission and thanks.



  1. bill j
    June 18, 2013 at 10:56 am · Reply

    This article seems to have a very confused idea of period. Until 1978 China was a centrally planned economy with basically no FDI in it at all. So what that’s got to do with the post-war boom I don’t know.
    As for the idea that China is making the transition to a service economy, tell that to the 147 million industrial workers.

  2. ashok
    June 18, 2013 at 11:29 am · Reply

    hey bill –
    on the first point, i think i make it evidently clear that FDI began in China post-’78 here’s the quote: “Let it be known, then: before Ronald Reagan’s stiff upper lip could overthrow the U.S.S.R.’s Evil Empire, and raise the Iron Curtain, Nixon’s canny ability to withhold racial epithets for a few days had itself reduced the Bamboo Curtain to toothpicks, packaged for export. “Rang yi bu fen ren xian fu qu lai,” announced Deng Xiaoping in 1978, “Let some people get rich first.” (And “some” did.) Billions of dollars of Foreign Direct Investment (FDI) inundated the countryside,”

    The post-war boom is a reference to the period of growth in western economies, im pointing to a pretty basic (and largely agreed upon) point about the reconsitution of capital.

    On the second point, id suggested refuting some of the empirical evidence i’ve laid out rather than point to the 147m industrial workers (a number that has steadily contracted in recent years), here are the irrefutable facts: 1. labor strife in china is on the rise. 2. cost of production in china is accelerating due to a spike in raw materials and labor costs as well as macroeconomic policy. 3. FDI has shrunk for the first time in China since 1978, 4. the chinese working population has shrunk for the first time since 1978. 5. China growth from the service-sector than industrial sector in the last three quarters (the first time since 1961), 6. the chinese state has said explicitly that they are actively transitioning to a consumption-oriented economy

    Im okay with a critique, but id suggest re-reading it and making a proper one bill.

  3. grahamb
    June 18, 2013 at 1:23 pm · Reply

    “And accordingly, 2012 marked the first time that China’s working population shrank (by 3.5m). At this rate many economists, even in the IMF, predict that China will reach a point of labour scarcity soon, the so-called “Lewis turning point”, an inevitable developmental phase when wages surge sharply, industrial profits are squeezed, with a steep fall in investment.”

    I’m not sure about “soon”. You didn’t link to the IMF paper – it estimates the LTP to emerge in China between 2020 and 2025.

    And that it could be offset by a number of factors. I guess the one child policy – already dodged by the growing middle class – will eventually go. That’s long-term. More immediate would be a loosening of the hukou registration system to ease the movement of labour from the countryside to the cities, and increasing the productivity of agriculture.

    The working age population may have peaked on current trend and that would be very significant if China was already a largely industrialised country. Clearly it isn’t anywhere near that yet as millions of the “working age population” are not urban workers – industrial or services.

    I think you have telescoped events and relied too much on general “contradictions of capitalism” to make the point. Contradictions for sure, but degree is everything. Though I agree on what you say about the burgeoning power of Chinese workers, the largest and most important national working class.

  4. ashok
    June 18, 2013 at 3:28 pm · Reply

    thanks for the comments graham,
    a few points…
    the lewis turning point is cited as an ancillary point (and 8-10 years is definitely sooner than most expected), the more important data comes from the issue of labor shortage and capital flight. labor shortage can be partially explained through the Chinese government’s reinvestment into rural development, which has seen a proportion of the industrial labor force return to the villages, in addition, (as you point out) the one-child policy has resulted in a falling industrial labor population. Tho (on your point about population renewal) the one child policy is by no means the only reason for the labor shortage, its one in a series of larger economic developments, but even with the easing of child restrictions. those who were the only-child in their family rarely have more than 2 children of their own. regardless there is little issue of ‘rebalancing’ the population. but, again, this is just a sidebar, the main point is that the chinese state no longer exudes the same kinds of energy to crush workers struggles and entice capital (depressed wages are hard to sustain in this phase of development, but also the gov’t plans of ‘rebalancing’ toward consumption away from supply in their growth strategy). There are obviously more explanations for capital flight than labor/capital ratios. the geo-economy of capital in southern China has few comparisons around the world, and continues to have a number of ‘appealing’ attributes. South China is becoming more expensive; but unlike other areas it contains an economy of agglomeration, offering planned industrial centers with built-up transports and infrastructure, a literate workforce with access to healthcare, and a growing internal market. The fact that capital is fleeing DESPITE these factors is whats really interesting.

    So, i’m genuinely curious what you find telescopic? it uses a theoretical frame with examples (both individual and empirical) to undergird that theory. sure it doesn’t tell ‘the whole story’ but nothing ever does.

  5. grahamb
    June 19, 2013 at 10:38 am · Reply

    “the lewis turning point is cited as an ancillary point (and 8-10 years is definitely sooner than most expected),”

    Ten years is a long time, more so as too many have thrived on a one-sided writing on China (and political economy in general). The detail changes but the tenor never does: economic fragility, limited life, contradictions coming to the fore, etc.

    As I said, these are very important but need to be put in time context. Take the American Chamber of Commerce article. I could also quote from it: “a record 91 percent report an “optimistic” or “slightly optimistic” outlook for their 5-year business prospects in China.”
    What is the gist of this article and the one on manufacturing: The Chinese economy is in transition and so too is US business in China. Low cost manufacturing will continue to move out as China goes up the value chain, wages rise, etc. Isn’t this as expected, capital in this particular sector will move (not a flight, something different) to the most profitable location, including the US with a falling Dollar and real wages.

    Of course non-mortgage consumer debt has risen much faster in China than the US because tens of millions are buying cars for the first time.

    Growth rates in China will be perhaps 6-8% in the coming years rather than the 10-12% of the past. Again, as expected for a maturing economy unless you think this is sounding a death knell.

    On industrialised countries: “Any plan that expands the workers’ share will undermine profitability, but without consumer spending the crisis will remain. The system weighs heavy by the contradictions embedded within it.”

    There is a plan – the current second phase of neo-liberalism – that is again benefiting capital at the expense of labour and gradually resolving the crisis for *them*, at least in the medium term. The restricted consumption of workers is an underconsumptionist explanation of crisis that begs the question of how capitalism has ever been able to cope with the contradiction.

  6. billj
    June 19, 2013 at 11:58 am · Reply

    Yeah there’s the quote. And its wrong. FDI did not really expand in China until after 1991;


    what’s more it wasn’t directed at the countryside, it was directed to the SEZs on the Southern coast.
    You don’t provide any empirical evidence. Official stats on the labour force are notoriously unreliable as they do not include *unregistered* migrant labour. The more accurate estimates are from the Bureau of Labor Statistics – like mine. The 147 million is a new record set this year.
    Certainly costs of production are rising, but from a very low base, this will become significant say in the next five years. Its effect is counter balanced by the growth of the internal Chinese market, where the demand for imports is growing very strongly.
    The central theme of your article – China is transitioning to a service economy – is just wrong.

  7. bill j
    June 19, 2013 at 12:09 pm · Reply


    China’s pool of 15- to 39-year-olds, which supplies the bulk of workers for industry, construction and services, fell to 525 million last year, from 557 million five years earlier, according to data compiled by Bloomberg News from the U.S. Census Bureau’s international population database. The number employed in industry rose to 147 million from 117 million in the five years through September.

  8. bill j
    June 19, 2013 at 4:55 pm · Reply

    Its not true that China’s FDI inflows declined significantly either;

    “FDI flows to China declined slightly but the country continues to be a major FDI recipient – the second largest in the world . FDI inflows to
    China declined by only 3.4 % to $120 billion in 2012”

    This is in the context of a larger decline in FDI inflows across the world due to the hangovers from the credit crunch. Actually it points to the strength of FDI investments in China which have held up notwithstanding a general decline. As this report shows


    “BRICS (Brazil, the Russian Federation, India, China and South Africa) have emerged as major recipients of FDI and important outward investors.
    Over the past decade, FDI inflows to BRICS more than tripled to an estimated US$263 billion in 2012. As a result, their share in world FDI flows kept rising even during the crisis, reaching 20% in 2012, up from 6% in 2000.
    BRICS countries have also become important investors, their outward FDI has risen from US$7 billion in 2000 to US$126 billion in 2012, or 9% of world flows – ten years before that share was only 1%.”

  9. ashok
    July 4, 2013 at 2:00 pm · Reply

    Bill – just noticed this, dunno if you’re being serious but ill assume you are. in your first comment you make the brilliant and yawn-inducing observation that “until 1978 China was a centrally planned economy with basically no FDI in it at all.” thanks for that. after i point out that this is exactly what i’ve stated. you then turn around in your second comment to contradict your first; “Yeah there’s the quote. And its wrong. FDI did not really expand in China until after 1991;” linking to a website that doesnt work. FDI expanded in 1978 in China for the simple reason that was when China originally opened itself up to it an incontrovertible fact (are you suggesting that FDI didn’t expand when it began?). Now, you knit-pick at my rhetorical use of the term “countryside” by saying “what’s more it wasn’t directed at the countryside, it was directed to the SEZs on the Southern coast.” i dont know if you read the same paper, but i make it pretty clear throughout that migrant workers moved from the countryside to the industrial southeast, here’s an example “Younger workers, who moved from their villages in the interior to the industrial metropolises then rising in the southeast, during the 80s and early 90s, are proving rather uppity.” no doubt you’ll try deconstruct “younger workers” or maybe it’ll be “metropolises” (something along the lines of: “they werent metropolises i tell you! they were urban centres, industrial hubs!”) then you try and say i ‘dont provide ANY empirical evidence” resorting back to your 147m number and googling some other random misplaced facts from links that dont work. Pretty convincing. How about the evidence of rising cost of labor, the central theme of the paper, is the contested at all? Also, u dont address the evidence that GDP from the service economy to industrial which marks an interesting turning point. Check this out (http://www.economist.com/blogs/analects/2013/02/services-sector):
    “It may be the year that China’s services sector officially eclipses industry. According to the national statistics, services (which include transport, wholesaling, retailing, hotels, catering, finance, real estate and scientific research, among other things) accounted for 44.6% of China’s GDP in 2012. That is less than one point behind industry’s 45.3%. And services are growing faster (see the second chart).”
    No doubt youll come back and say “the IMF stats are totally unreliable, the only number that matters is 147m”

    Your third response backs my argument entirely, it shows industrial labor force contracting and service labor force expanding. thanks

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