Sep 25, 2006 at 12:00
A funny thing is happening on the way to the (consumer) Forum: the PRC is imploding in business terms.
The basic posit that communism and capitalism are incompatible is finally coming to a head. It's not because of the number of millionaires who are building castle-like mansions outside cities such as Shanghai. It's not about the difference between those (now many) very well-off people and the peasants who are hounded by corrupt local party officials: no, that is a revolution that is further down the road when it really hits home to the poor farmer exactly what the more equal people are getting.
No, this is a trade battle.
Inside the PRC, the manufacturers of consumer products are running out of customers, and the competition is so intense their margins are razor thin. That is not good, of course, for the sweat workers who are producing the products. The manufacturing costs are still mostly dependent on labor costs -- they will need to be cut even further.
The wise vendors are looking to export -- not jus...