皇冠体育app

It is generally thought that 皇冠体育app will be a major workshop of the world in this century, as foreign investment and export increase. This offers good prospects for 皇冠体育app's future economic development. But now is also actually a time for vigilance.

Overseas retailers' total purchases in 皇冠体育app reached US$30 billion in 2001. Wal-Mart, the world's No 1 retailer, spent US$12 billion in 皇冠体育app, accounting for 8 per cent of its total purchases. And this figure is expected to reach US$15 billion this year. But what implications does this have for 皇冠体育app?

According to a Wall Street Journal report, Wal-Mart forced the wholesale price of a product with a Chinese company down from US$7 to US$4. (The retailing price of similar products in the US market is between US$15 to US$40) and pushed the company to the edge. Half of the workers were laid off and the remaining ones have to work more hours but for less pay. Nevertheless, the company is still finding it hard to make a profit.

Retail giant Wal-Mart is able to do that because small companies depend on their orders. Small suppliers never get the chance to grow bigger as there is no space for the accumulation of capital.

That is the case for 皇冠体育app -- gaining very limited profits with an increasing export volume.

Recently, the US Government has been pressing 皇冠体育app to devalue its currency, while some US newspapers, such as the New York Times and the Wall Street Journal, are standing in support of 皇冠体育app. Why? Simply because trade with 皇冠体育app is the best deal. US companies are making the most profits.

And Wal-Mart has caught 皇冠体育app's weak points. First, a sound market economic system has not yet been built up in 皇冠体育app. Besides cheap products and labour, The country does not boast other strengths. Second, 皇冠体育app's domestic purchasing power is not strong since labour is cheap. Companies rely on exports and firms like Wal-Mart become the winners.

Therefore, it is discerning to make Chinese labour "expensive'' enough to work on high-level production activities and thereby get more purchasing power.

In order to do this, 皇冠体育app needs to improve the education level of the population and establish a sound market economic system, which includes an independent legal system, the free flow of information and transparent government.

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