30 years - gone from mainly
agricultural economy to strong
manufacturing economy. 3rd largest
economy in world after US + Japan.
% of GDP from agriculture
fell between 1978 + 2004
from 30% to less than 15%
Same time - number of products
manufactured increased rapidly e.g.
4000 colour TVs made in 1978
compared to 75 million in 2004.
Manufactures many products e.g.
clothes, computers + toys. Lots of
TNCs have factories there e.g.
NIKE, Hewlett-Packard + Disney.
Cheap Labour
No single min wage - different all over country.
Makes labour much cheaper
than other countries e.g. UK -
min wage is £990 per month.
Long working hours
Chinese law - people only allowed to
work 40 hours per week - maximum
36 hours overtime per work.
Not always enforced - e.g.
manufacturing company, foxconn,
- some of factory workers have
done 80 hours overtime per
month to maximise production.
Laxer health + safety regulations
Health + safety laws similar to other countries - not
heavily enforced e.g. over past decade, 100s of
factory workers treated for mercury poisoning
despite strict laws on working with toxic materials.
Prohibition of strikes
Workers can strike but All-Chinese Federation of
Trade Unions (ACFTU) - required by law to get people
back to work quickly so productivity is maximised.
Illegal to join any other union than ACFTU.
Tax incentives + tax free zones
Special Economy Zones (SEZs) - offer
tax incentives to foreign businesses.
Foreign manufacturers pay no tax for 1st
2 years in zone, 7.5% for next 3 years,
then 15% then on. (Still half of usual 30%
tax elsewhere in China.)
Shenzen - one of most succesful SEZs -
$30 billion of investment by TNCs.
Factories in Shenzen make products for
companies like Wal-Mart, Dell + IBM.