The Investment Scientist

Posts Tagged ‘labor cost

China has 1.3 billion people.  In the last two decades, it is the source of seemingly limitless supplies of cheap labor to the world’s manufacturing industries.  Believe it or not, this pool is about to run dry. When that happens, there will be huge implications for the world.

Even before my trip to China, I had read with incredulity that China’s exporting provinces are experiencing severe labor shortages requiring firms to raise wages 20%–30% just to keep the workers they have. My first stop in China was Shenzhen, a city that is home to Walmart’s worldwide procurement center. I stayed in the Evergreen Resort, a facility owned and operated by my friend Mr. Lin.

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Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.

Twitter: @mzhuang

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