An Insight !!








An article appeared in the New York Times regarding the "China Could Learn From Henry Ford" (http://www.nytimes.com/2010/01/20/world/asia/20iht-letter.html?ref=world) as being a symbol of the tiresome paradoxical situation that the Chinese economy is facing now. For the past few decades Chinese government have been able to sustain themselves by keeping the prices of goods they produce very low and taken over the entire foreign export market.

Very soon China is going to overtake the German economy in the race of being the number one exporter. However as widely discussed it steps have come up with a clause of keeping its Renminbi prices stable across the world standard that is the dollar. China has kept this constant to fuel and refuel its production units by providing the same low prices it has been providing foreign communities since ever. This situation has predisposed the Chinese economy and worsened the situations of the people living in them.

Henry Ford employed some of the millions of East European immigrants who poured into the United States a century ago, as well as migrants from the South and Midwest lured by high wages. China's leaders must deal with hundreds of millions of rural laborers coming to cities, who put downward pressure on salaries. "Unskilled workers are condemned for generations to low wages," Mr. Xiao said. Even a skilled worker like Gong — who also asked that his full name not be used — said he makes only 6 renminbi an hour as a welder at Ford's Chongqing plant, 9 renminbi an hour for overtime. "I have a dream of someday buying a car," said Gong, 29, as he walked home in the rain after a 10-hour shift. "I guess it will take six years of saving."

If Google and Baidu are not the abstract examples then what more do we need! In race for the ultimate supremacy Chinese government has compensated with the creation of the middle class. It is only the elite group and the commoners who reside within its premises. Most of the people still remain underpaid to supplant the low prices that the government has fixed. This has much to do with the world in general ass the third largest economy is still not sufficient to pay all its bearers. But the complication arises when the underpaid workers start to buy they would convert this export driven economy to an import driven entity.

Thus it results in risking the low value of Renminbi that the Chinese government has tried to maintain since years. Thus creation of the middle class would destroy the old China however might lead it to the creation of a fair and much more communist capitalist state with clich├ęs

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