No one wants to compete with China’s seemingly unlimited supply of cheap labor. But what’s the best alternative? Is it better to take advantage of a huge, low-wage workforce by setting up factories on the mainland or to retool local businesses so they can make products that require more advanced skills? And what goods can a nation’s industries sell to 1.3 billion Chinese customers?
As our Hong Kong Bureau Chief Kevin Hamlin, a veteran of two decades in Asia, notes, “China’s arrival is creating a seismic shift that affects every politician, businessperson and financier in the region.”
This shift runs through much of our May coverage. Singapore founder Lee Kuan Yew tells Hamlin that to cope with China, an increasingly powerful economic rival, he’s trying to encourage entrepreneurship in a city-state that’s prospered for decades through discipline and centralized planning (“Remaking Singapore”). And in Hong Kong, once the epitome of laissez-faire economics, Financial Secretary Antony Leung is mulling over the scope of government intervention needed to ensure that his city isn’t eclipsed by Shanghai (“Antony Leung’s New Agenda”).
Trying to sort out who will win and who will lose as China grows is the brief of Asia’s equity analysts. As bureau chief Hamlin notes in a story accompanying our 2002 Asia Research Team, analysts now spend most of their time on investor queries about China. Our roster of who’s doing the best work on China , and all of Asia ex-Japan.
Of course, it’s possible that China’s development will take an unexpected turn. There are still powerful elements who prefer the old ways. Laura Cha can attest to that (“China’s Iron Lady”). For many years the lead regulator of Hong Kong’s securities markets, Cha last year accepted Premier Zhu Rongji’s unusual job offer, which required her to give up her U.S. citizenship and move to Shanghai to impose order on the country’s notoriously speculative markets. A lot of speculators , and their shadowy backers , wish she’d stayed in Hong Kong.
