Monday, April 04, 2005

Labor shortage in China?

This story fails to mention that China’s unemployment rate doesn’t get too far away from double digits. But even a 9 to 10% rate is not an accurate depiction of the employment condition in China. When I was there I saw plenty of waste – everything from 3 or more door openers in every restaurant (often outnumbering the number of customers) or several security guards stationed in vacant buildings. While the Party recognizes some of the virtues of capitalism it cannot bring itself to let go of its communist ways. The result is a grossly inefficient system that prohibits the natural reallocation of resources which heavily contributes to the kind of labor problems described in the NYTimes story.

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