A fresh look at China

November 7, 2007

Back in 2004, Martin Wolf wrote, in a chapter dedicated to multinationals in his book on globalisation, :

It is right to say that transnational companies exploit their Chinese workers in the hope of making profits. It is equally right to say that Chinese workers are exploiting transnationals in the almost universally fulfilled hope of attaining better pay, better training and more opportunities than would otherwise been available to them.”

A forthcoming paper (upload here: acer_messerlinwang_nv6final.pdf) by Patrick Messerlin and Jinghui Wang at Sciences Po gives us a new perspective on China. China is not a monolith. Parts of China will be like the EU in not too long a time. Some provinces have per capita income levels (in purchasing powerparity terms) that have reached those of several EU member countries. Shanghaians are richer than Greeks. The paper highlights 9 provinces, all on the country’s eastern coast that will soon enter the world’s high income bracket: that is roughly 400 000 million people – almost as much as the EU. Unnerved about job losses in low-skilled sectors of the economy? Well: think of all the good jobs a thirsty market almost equivalent in size to the EU will create for Europe! The Chinese story is not static. The country’s economy is progressively climbing up the ladder of more sophisticated production, and it is becoming a new hub for production chains reaching out into South East Asia. This means it is becoming more expensive to produce in China! Of course, at the other end, 13 Chinese provinces are at the level of the world’s most poor countries. Shanghai’s inhabitants are more than ten times richer then Chinese citizens from the country’s poorest province, Guizhou. Yet Luxemburgers are eight times richer than Bulgaria: so lots of work to do here as well….

Please see this table:
chinaeu.jpg

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One Response to “A fresh look at China”

  1. Emmanuel Says:

    Wow! I had no idea that Shanghai had a higher GDP per capita than Greece. The large variation in GDP per capita of various Chinese provinces is consistent with the country’s rising Gini coefficient.


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