Govenrment and Business Environment Case Study

China's Rising Cost of Business: The Human Resources Factor

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Abstract:
China's enormous pool of low cost manpower had enabled it to develop as a manufacturing base for companies across the globe. However, since 1998, the situation seemed to be fast changing with China facing a shortage in the availability of skilled manpower. Experts predicted that this would lead to an increase in the cost of available manpower and therefore increased costs for businesses. They feared that this would result in China losing its competitive advantage as a low cost manufacturing base. However, some experts were of the opinion that the shortage of manpower was merely a temporary phenomenon and China would continue to be a low cost manufacturing base.

Pedagogical Objectives:

• To understand China's competitive advantage as a low cost manufacturing base
• To discuss the future of China’s competitive advantages as a low cost manufacturing base for global companies.

Keywords : China, Comparative advantage,Government and Business Environment Case Study,Low cost manufacturing base, Manpower cost advantage, US Bureau of Labour Statistics, Migration of manpower, China’,s one-child policy, Social welfare funds, Statutory benefits, Turnover rate, Skilled manpower shortage, Managerial level talent, Rising cost of business