The iPod – the iCon of Chinese capitalism
Walking past Apple’s sleek shop along London’s Regent Street on Sunday, my wife asked me what I wanted for Father’s Day.
“An iPad?” I ventured, half-jokingly.
“Are you sure you want one? Don’t you care how they’re made?” came her disapproving reply.
The deaths prompted the company to raise salaries and cut working hours but lingering concerns over conditions for its over 1 million workers in China were underscored by a plant explosion last month that killed at least 3 people.
Workers like those who live and work in Foxconn’s sprawling Chinese facilities have long been the backbone of the country’s vast manufacturing sector which churns out a torrent of consumer goods for export.
But the recent labour unrest that has erupted in parts of China suggests that this low-cost export-fuelled growth model may be wheezing towards its expiry date.
Even as the world’s largest contract cellphone maker, Foxconn is loss-making, its margins squeezed by rising production costs and falling gadget prices.
Younger Chinese workers are turning out to be more demanding employees, their bargaining power strengthening as a result of the growing labour shortages due to the country’s strict birth control policies.
Noted currency guru Stephen Jen thinks the rapidly greying population may have already pushed the Chinese labour market past the crucial inflection point outlined by Nobel Prize-winning economist Arthur Lewis that will see wages and inflation continue to rise indefinitely.
On the flipside, rising wages will increase the purchasing power of Chinese consumers.
Their hunger for products, particularly ‘Western brands’ such as Apple, appears insatiable.
The frenzied rush for iPads and iPods when they were launched in China last month saw scuffles and near rioting in Apple’s Beijing store. Last week, a teenager in the southern province of Guangdong reportedly sold a kidney for some $3,100 to buy an iPad.
For China’s evolving economic story — with all its promise and pitfalls — there can be no better emblem than Apple’s iPod.