Trends Journal Alert: China Offshoring The Collapse of the Western World

Paul Craig Roberts opines

How big is planet earth? Large if compared to the moon, small if compared to the solar system, and infinitesimal if compared to the universe. The point is that the size of something depends on that to which it is being compared. 

The San Francisco Federal Reserve Bank www.frbsf.org and offshoring’s shills forgot this simple point. On August 8 the SF Fed put out an Economic Letter in which US imports of goods made in China (both by Chinese and US firms) were explained away as a mere 2.7 percent of US personal consumption expenditures. 

I am confident that the staff of the SF Fed were competent to get the percentage correct. But does it mean anything? No.

For most Americans, their income is used up on housing, energy, car payments, food, and medical care. Very little income is left, especially these days, for durable (for example, furniture and household equipment) and nondurable (for example, clothing and shoes) manufactured goods. 

Editorial: China's New Labor Revolution: Impact on China's Broad Economy

The Asian Times is out with an op-ed piece describing the evolution of the Chinese labor force over the better part of the last two decades. Truth is Liberty, below, has provided a breakdown on key elements contributing to China's steam engine rapid growth in the face of no social safety nets, high domestic inflation and few labor protection laws. 

• China has the largest labor force in the world
  
• Unlike Western economies where wages have remained stubbornly flat, migrant worker wages have gradually risen over the past decade (roughly 14.1% increase)
  
• China's working age population (aged from 15 to 64) has experienced steady growth over the past few decades- totaling 71% of China's population.
  
• The working-age population will stop increasing in 2017, when it reaches a peak of about 999.6 million, and will reduce gradually from then on.
  
• The demand for labor resulting from rapid economic growth was filled by the steady mobility of a rural surplus labor force. It is estimated that more than 200 million farmers have left the agriculture industry since the mid-1990s.
  
• the abundant absorption by cities and non-agricultural industries, the number of rural surplus labor has been greatly decreased
  
• the supply of young labor force under 30 years old is gradually tightening. The second national agricultural census data showed that nearly one quarter of the rural labor force went out for employment in 2006, of which 52.6% were young workers under 30 years of age.
  
• China is still at the stage with the most abundant labor resources and the lowest dependency ratio. China has not yet entered the era of labor shortage.
  
• With economic development, living standards of Chinese urban and rural residents have shown a substantial improvement and the cost of living a corresponding increase. Therefore, reservation wages of migrant workers have started to rise.