China's New Competitors
The Wall Street Journal’s Joseph Sternberg examines the erosion of China’s manufacturing supremacy due to rising transport and labour costs, and possible consequences of this shift:
… [The] warning to Beijing is that its exporting advantages aren’t immutable, and leaders should not assume this growth spigot will be as open forever as it appears to be right now. That might seem like an obvious point, except that Beijing’s actions suggest it’s not. Rather than consistently opening new growth channels domestically, China’s government has doubled-down on its old model of cheap credit to exporting industries, coupled with a lack of seriousness on policy areas like intellectual-property protection and service-sector development that will be vital to weaning the country off exports.
Analysts tend to assume that Beijing will get to choose the moment when it does shift away from export-led growth to something else. The danger lurking in these latest signs of global manufacturing diversification is that the market could one day choose that moment for Beijing.