The End of Cheap China: Economic and Cultural Trends that will Disrupt the World by Shaun Reinn (Wiley 2012) is an insider look at the economic changes in modern China which the author says will have a profound influence on the US and the rest of the world. In short, he says the demand for higher wages and the expansion of markets within the country are changing its export-oriented economy to one which serves China’s own demands for consumer goods and opens a market of over a billion people.
Reinn, a market researcher, has lived in China for several years and thinks he has analyzed the situation better than others from the outside who see the rise of the Chinese economy as a threat. He ends each chapter with action plans for enlightened companies who can discover a rich future serving the Chinese market.
The author predicts that Vietnam and Indonesia will replace China as a place to find low wage workers.
Limitations in the continuing economic power of China will be due to its outdated educational system, in the author’s view. He notes that many parents in the business send their children abroad, especially to the United States, to receive a broader education than is available at home. Only about 30% of high school graduates attend college where classes are very large and where students specialize too soon and lack skills in creative and critical thinking.
The author says that there are more billionaires in China than in the US. An upper class in China, rich in cash, has produced a demand for luxury goods so that now China is considered the second-largest luxury market in the world. This is good news for providers of luxury items no matter where they are made.
Reinn considers some of the criticisms leveled at China for its failure to give attention to human rights as not fair. He considers its policies are a governmental attempt to control the rapid economic growth and not deliberate attempts to stifle freedom. He thinks that the system will topple if high growth rates do not continue.
The empowerment of women is another reason for The End Of Cheap China. Women in China are more numerous that men in Chinese universities and account for more than half of the income. In some cases where policy allows couples to have two children they are opting on their own to have only one child for economic reasons. Gender inequality is still a problem in rural areas.
Reinn uses dialogue with Chinese acquaintances to illustrate many of his points which he then backs up with research. Not filled with a lot of economic theory, The End of Cheap China is an easy read, a good place to start for anyone wanting an introduction to modern business and culture in China. (Painting by Peter Gooch)