Chinese workers had been China’s backbone in their growing economy and trade growth.They are the engine of China economic growth and roaring export economy.
Most of them came from the countryside moving to industrial centers where they work in factories manufacturing various goods whether it’s food, electronic, clothing, beauty products or any household items.
The Chinese government has another way of utilizing them, not in the form of services but for their paychecks. These workers which comprise the big bulk of earners is crucial in Chinese domestic economic development.
They must start buying the very products that they manufacture, spending their hard earned pay on electronic items like plasma TV, other items like lipstick, lingerie, household items like kitchen items and furniture.
The government see them an alternative to once lopsided approach of too much dependent to foreign consumers. Chinese government economic officials emphasized the need to restructure for years their financial system since the global financial crisis affected their export industry.
With their currency renminbi appreciating and their tolerance in handling factory strikes due to wage increases, has signaled that China now is serious in reshaping the country’s economic model.
With the appreciated value of renminbi, may likely that Chinese products may be less competitive in global market place but it would strengthen the purchasing power of the consumers.
Government can effect wage increases to poor laborers numbering to 150 million migrant workers that could also spur consumption if pay increase is ahead than inflation. It is a positive way of boosting domestic consumption and at the same time restructuring the economy.
“For a long time, wage growth has lagged behind economic growth, and that has forced China to continue to depend on exports,” said Liu Cheng, a scholar of labor law at Shanghai Normal University.
Analysts say that a currency revaluation by itself will not make Chinese exports less competitive despite China’s currency appreciation against the US dollar, China’s trade surplus continued to grow.
In recent months China have shown a strong recovery and Chinese economic officials obviously felt confident that the recovery to go forward with the currency revaluation.