Monday, January 21, 2013

Hate to Say We Told You So

Here in America, we worry about manufacturing jobs moving on to China because of low wages. Economists (including, but not at all limited to me) have said for a long time that this isn’t a patter than will persist.

In China they worry about manufacturing jobs moving on from China because of low wages.

You can see this in the panel on the left below. This shows foreign direct investment — essentially foreign money being used to actually build productive capital (rather than just buy stock). This chart is not logged. If this series was growing at a constant rate it would be getting steeper, and that doesn’t seem to be the case.

image

Read the whole thing, entitled “China Begins to Lose Edge as World's Factory Floor” in the January 17 issue of The Wall Street Journal.

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