Col,

I was simply referring to the opportunity of running two sets of books, cash economies and disguised income, especially in the small family business. Less chance of being caught-out with illegalities. I this frame, I do not assume all income is recorded and perks are maximised.

"We" is just a generic term to describe what Australia might do.

Employees can be redeployed and their past bosses can find more productive employment too. J Curve.

Look at Texas and California, without the power of sovereign state, each state has about the same population, but a larger economy than Australia. We are too small to produce many global consumer products, but we do have the capacity to contribute to R&D more than we do.

Of course, many SME owners can manage a good living under the radar of the transnationals. Just the same, improving personal circumstances might not be best in the aggregate interest of the country.

By design and consultancy, I refer to performing potential activities abroad by major construction companies and specialist consultants. We, oops, Australia can service the demand for our expertise.

When it comes to an emphasis on services and exporting know-how, I think Australia has already rightfully become involved, especially since the emergence of several Asian economies.

Nor would I suggest we scrap SMEs altogther, but selective divestment could be valid.

O.

Col, I will take the challenge (or is that the bait?)

“1-Are-the-Chinese-factory-workers-complaining?”

Yes. The Chinise Minister for Police announced that there were 87,000 demonstrations and protests last year, up from 10,000 ten years ago - http://www.zmag.org/content/showarticle.cfm?ItemID=11152. This is only those who have the gumption to complain….so far. The factories have measures for intimidating those who do complain, and apparently even if people were to take their complaints to authorities (who are one and the same as the factory owners, or have connections), nothing is done about them. No doubt state repression (recall Tiananmen Square) would affect the numbers who vocally complain and demonstrate. The state is now beefing up the army to deal with growing unrest http://www.wsws.org/articles/2006/dec2006/chin-d05.shtml.

“2 Would-their-employment-conditions-be-better-or-worse-without-those-factories?”

Would you better off with asbestosis or mesothelioma?

“3-Does-anyone-in-China-want-to-turn-back-the-clock-to-the-days-of-Mao-and-then-the-gang-of-four-and-their-style-of-social-benevolence?”

Would you prefer a car accident or plane crash?

4 How-do-people-in-North-Korea-view-the-factory-conditions-in-neighbouring-China?

Heart disease or a brain tumour?

These attempts to make the abhorrent working conditions of millions in China appear more favourable by comparing them to the worst possible living conditions are obfuscatory.

The question we should be asking is, why, when we have technology that would enable us to raise the living standards of all people in the world, when we are producing more than we ever have (and wasting a lot of it), are human beings still being subjected to these slave labour conditions, which are slightly better than starving?

Your words: “China-is-going-through-an-industrial-revolution.-The-privations-which-exist-now-reflect-the-same-as-existed-in-the-UKs-industrial-revolution-of-2-centuries-ago.-

I-would-note-from-that-revolution-came-Cadbury’s-model-factory-and-employment-practices-at-Bournville,-the-“Truck-Acts”-and-a-host-of-other-elevations-in-employment-conditions-as-the-“natural-goodness-and-compassion-of-man”-prevailed.”

Consider the logic of your statements.

Everyone has known for decades of the oppressive regime in China, which is what makes investment there so attractive - they have proven that they are willing to put down any resistance. China is a massive cheap labour pool ripe for exploitation. Multinationals go to China SPECIFICALLY for cheap labour. They TAKE ADVANTAGE of the conditions. Yet somehow you think that multinationals are going to voluntarily, out of the “natural goodness” of their hearts, increase wages and conditions. If multinationals want to pay decent wages, why don’t they continue manufacturing in Western countries where wages and conditions are good (relatively speaking)?

cont...

...cont

From the article quoted in my last post –

“China Labor Watch executive director Li Qiang noted that as factories frequently had four or more clients, multinationals often claimed that if laws were broken, they could not be held responsible for the work orders of other companies. As he observed, however, the CORPORATIONS PAID CLOSE ATTENTION TO EVEN THE SLIGHTEST CHANGES IN COSTS—CHANGES THAT COULD AND HAVE LED THEM TO MOVE PRODUCTION TO OTHER PLANTS AND OTHER COUNTRIES AS SOON AS PROFIT RATES FELL FRACTIONALLY. This belied their professed inability to stay informed of working hours or pay levels.”

So it is a race to the bottom, to the lowest prices, to the lowest wages. Even if Nokia ameliorated some of the worst abuses (which is debateable), to quote Yabby “it is a long stretch to then assume it is the same all over China”. Even if there are some bleeding heart capitalists in China (which again is HIGHLY debateable), they wouldn’t stay in business long because they must compete with others. The old “market forces”.

And why, if the “natural goodness and compassion of man” prevailed, have conditions returned to those of 2 centuries ago, largely at the behest of Western capitalists? The improved conditions of workers did not arise “naturally” out of the capitalists’ hearts, they were fought for, and won from their overlords, by workers. Conditions won by Western workers in the post-war boom were concessions made by capitalists, aimed at staving off socialist revolutions which had been brewing around the world in the early 20th Century. Those conditions are now being systematically stripped back. Western workers are being pitted against Chinese and Indian workers.

Again, why, when we have the technology to raise the living standards of all people in the world, when we are producing more than we ever have, are the living conditions for increasing numbers of people in Western nations, and all over the world, becoming more tenuous and insecure? Why, if the “goodness and compassion of man” has prevailed, is this situation tolerated, and in your case, excused?

Tao,

Sinologist, Lucian Pye, states, with China, the issue is not left and right (read socialism versus capitalism), rather, its a matter of control versus freedom. Herein, China will continue to open up, provided the powers-that-be feel things have not run away from them. Its the reins not gains that really count. Note, I have conducted business in China.

The Middle Kingdom does not like to pay deference to others (read the US and UK). Australia has an advantage in this regard, as we tend not to play the role of "the Wise Men from the West".

Yappy.... you have some good points, but let me indicate one weakness in what you shared.

If WESTERN countries force the conditions and pay by contract... ok, but China is not run by Westerners, only some bits are. (Joint ventures). The Chinese have uncountable indigenous economic players and I suspect these are the ones featured in the SBS doco.
I'm encouraged that union membership is increasing and that pay is also, but, China is very adept at 'looking' good for the sake of propoganda.
I'd love to know the actual PROCESS by which their pay went up. Labor shortage ? if so, more labor...lower wages again.

PERICLES, I think I can prove mathematically that taxing Chinese slavery is an economically viable option. Unfortunately, I don't have all the needed info :) yep..thats a cop out.

But... consider this.
If 20% of the manufacturing workforce is made redundant, most of them permanently due to age, the dole cost would be astronomical. If dole is $200/wk and Jobless workers=50,000 then the weekly cost would be $10,000,000 a week or around $500million annually. Now.. consider the alternative, Taxing chinese goods at a 10% rate ? We import $3.2bln of clothing items and $2.4Bln in Computers from China. Taxed at 10%=$500 million.
The thing is, if we don't tax them, WE pay the dole, if we DO tax them, we still pay but INto revenue rather than taking it.

The impact of the tax though, is to make Chinese goods less attractive, thus preserving jobs here. No dole payout, and added government revenue from the tax paid by the now NON redundant workers to spend of health.
Now.. I know we sell them 12Billion worth of Iron ore, which is probably locked into contracts which include reference to our import trade with them. I don't know if there is any binding clause saying we will not add any tax to imported product.

But then...I also don't know if there is any clause allowing them to change suppliers when a new one comes on stream. So, ....details details.. We need Faustino to help us here.

Logic – “I respect your opinions on the conduct of business,”

thank you, although I doubt I am any more “advanced” than anyone else.

RE “lost income … the older worker who may not find themselves able to adjust …Have you any thoughts on what we could do here.”

I returned to Australia from Texas (failure of second marriage)I was aged 51, without much, a house in Australia with a mortgage still on it, a 20 year of Celica in the drive way but a group of fine and wonderful friends.

I have plan A, B, C and D to deal with the question we all face “how do I find financial security in a changing world” ? (which is, essentially, the question you are asking).

I will not bore you plan details, other than to say

One is what I have done in the past (consultancy work) and have been eager to get away from (too much of a roller coaster) but produces cash (plan D).

Plan C, has been a fizzer.
Plan B, the hedged bet, has been a modest success, has paid me back more than it cost in cash and does produce a reasonable “recurring income”.

The one which has been slowest to evolve and which, in hindsight, has cost me the most (in terms of cash and time) will yield me the "financial security goal". I will call this plan A.

Plus a few other ventures which did not get to be “plans”.

So to do my best to answer your question “lost income and ability to adjust”, there are no choices for anyone.

I suggested recently, for SHONGAS friend, get a goal, build a plan or do what I have done, get several plans to service my one goal (to “find financial security”).

No one thing will work for everybody but something will always work for somebody, preferably something which they are passionate about.

As pericles eloquently put it “Learn. Adapt. Survive. That's the only workable formula.