New economy: goodbye, China and hello, Africa?

2013-01-23 00:16:11 GMT2013-01-23 08:16:11(Beijing Time)

Africa instead of China. The resources of cheap work force in China are becoming exhausted. This is a serious challenge to modern economy. Africa will serve as a saving remedy. Africa will turn into a new source of cheap work force, and in the future it will turn into a global production centre. Is this true?

A tough authoritarian system plus a huge resource of cheap work force – these two served as a basis for the “Chinese miracle”. However, all resources are finite. At the Gaidar Forum -2013 that is over in Moscow now Professor Jack Goldstone from George Mason University (GMU), Washington, said that since mankind is growing old in a few years the Chinese work force will become insufficient. This means that both the economic and social models that have been in existence in the past 30 years will be under threat.

The American professor believes that production sites should gradually move from Asia to Africa. The latter is a poor continent but more than one billion people live there, and an increase in population is higher in Africa than in any other part of the world. Therefore, Africa may become a new source of cheap work force for global industry.

Both economists and Oriental studies experts agree that China’s main resource may run short soon. Deputy Director of the Institute of Far Eastern Studies of the Russian Academy of Sciences Andrei Ostrovsky says.

"Really, the work force in China is rising in price, and in 10 years the situation in China in this field will be comparable with that in Taiwan, Hong Kong, Korea, and Japan. Wage levels will grow considerably with every passing year. This is mainly caused by the fact that beginning from 2016 the share of economically active population in China’s total population will start decreasing – that is why the cost of work force as well as that of refresher training will grow."

Meanwhile, experts have doubts that Africa may turn into a new source of cheap work force. Africa can’t compete with China because there are no such conditions there that earlier helped China to achieve an economic breakthrough, Deputy Director of the Institute of Economics of the Russian Academy of Sciences Ruslan Grinberg says, adding that a relevant infrastructure is non-existent in Africa either.

The USA and China are investing in natural resources in Africa because this is necessary for the development of their own productions there.

However, it is not Africa that matters here. Many economists say that low-paid labour was one of the reasons for the world economic crisis. Director of the Institute of National Strategy Mikhail Remizov is sure that businessmen are unwilling to modernize the manufacturing base in the regions where there is cheap labour.

"Cheap labour hampers the boost of technologies and strengthens social inequality. Despite that Ruslan Grinberg hopes that the 21st century economy will turn into the economy of machinery and intellect."

"A tendency towards “robotization”, or automation by the application of advanced scientific technology, is visible in modern technology. Intellectual resources, not cheap work force, are gradually turning into a powerful means of competitive struggle today."

Productions where there will be need for physical labour will always exist.


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