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Wire & Cable ASIA – November/December 2016
From the Americas
Presidential politics USA
Is China taking jobs away from
Americans? Or are Chinese workers
losing out to their counterparts in the
United States?
Even in an electioneering season rife with expressions of
concern for the American worker, the claims of presidential
candidate Donald J Trump stood out. Throughout his
campaign he asserted that China is stealing American
manufacturing jobs. In his speech to the Republican
National Convention on 21st July, Mr Trump – the party’s
nominee – said that “disastrous trade deals” had hurt
factory workers in the USA. He also said that American
support for China’s embrace of free trade has been a
“colossal mistake.”
Writing from Beijing during the week of the convention,
Michael Schuman of the New York Times reviewed the
supposedly baleful Chinese effect on US workers and
was led to a very different – indeed, opposite – conclusion
from Mr Trump’s. Workers in today’s China, Mr Schuman
reported, are losing their jobs to a slowing domestic
economy, rising costs and stiffer foreign competition –
including from the USA. (“Is China Stealing Jobs? It May Be
Losing Them, Instead,” 22nd July)
In short, wrote Mr Schuman, China’s labour market
has changed sharply, with manufacturing for export
“getting harder and harder.” Jim McGregor, chairman
of the consulting firm APCO Worldwide’s Greater China
operations, put it succinctly. The presidential candidates,
he told the Times , “are screaming about yesterday’s
problems.”
The agents of change are clear enough. As the Chinese
economy has expanded, creating opportunities in many
sectors, assembly line jobs have become less attractive,
causing managers to raise wages to attract workers. At
the same time, local governments in Shenzhen and other
industrial centres have steadily increased the mandated
minimum wage to improve the welfare of working families
and pressure companies to produce more expensive,
high-value products.
That combination, noted Mr Schuman, has pushed wages
for Chinese factory workers higher. Their monthly pay now
averages $424 – approximately 29 per cent more than it
was just three years ago. Labour costs in China are now
significantly higher than in many other emerging economies.
Factory workers in Vietnam earn less than half the salary of
a Chinese worker, while those in Bangladesh are paid under
a quarter as much.
USA manufacturing reshoring picks up
What that means, wrote Mr Schuman, is more jobs for
American factory workers. Half of the respondents in a
2015 survey of large USA manufacturers conducted by the
Boston Consulting Group reported expecting the number
of manufacturing workers they employed in the USA to
increase over the next five years.
In a separate survey by BCG last year, 24 per cent of
respondents said they were actively shifting production
home from China or were planning to do so over the next
two years, up from only 10 per cent in 2012.
“It just makes economic sense,” Hal Sirkin, a senior partner
at BCG, told the Times. “The US right now is in a very
favourable position.”
 And it is not just the USA that is taking jobs away from
China, observed Mr Schuman. Rising costs are driving
many companies in a variety of sectors to relocate to a
wide range of other countries. He cited the most recent
survey from the American Chamber of Commerce in
China, in which a quarter of respondents said they
had either already moved or were planning to move
operations out of China. The top reason? Rising costs.
Of those respondents, almost half are moving into
other developing countries in Asia. But, tellingly – if
presidential aspirant Donald J Trump had happened to
be paying attention – nearly 40 per cent are shifting to
the USA, Canada and Mexico: the three signatories to
the North American Free Trade Agreement (NAFTA),
which Mr Trump has called the worst deal in USA
history.
Automotive
An American company is implicated in an
airbag-related fatality
Airbags made by ARC Automotive (Knoxville, Tennessee)
came under heightened scrutiny in August after a rupture
in one of its bags was linked to the death of a driver in
Canada the previous month. The National Traffic Safety
Administration (NTSA), the USA regulator, is investigating
hybrid airbag inflaters made by ARC that use both a gas
and the explosive compound ammonium nitrate. The fatal
rupture raised the prospect of adding millions of cars to the
already extensive recall of exploding airbags made by the
Japanese manufacturer Takata.
According to the Canadian auto safety regulator, Transport
Canada, the driver of a 2009 Hyundai Elantra died when
the driver-side airbag inflater exploded after a low-speed
collision in Newfoundland on 8th July. The NTSA had already
opened a preliminary inquiry into at least eight million airbag
inflaters made by ARC for use in Chrysler, General Motors,
Kia, and Hyundai cars through model year 2004, but the
agency said its new, formal, investigation will go beyond
that population of inflaters. The death in Canada was the
first known fatality linked to a rupture in an airbag from a
supplier other than Takata. The NTSA said on 4th August
that the ARC and Takata airbag inflaters had “significant
design differences” and that the fatal ARC rupture probably
had a different cause.
With over 380 million connected cars expected on
the road by 2021, automakers and tech companies
make a new dynamic duo
A connected car is able, by means of connectivity with the
Internet and usually also with a wireless local area network
BigStockPhoto.com Photographer: Aispl