Firethorn,
China's birth control, as brutal as it is, is going to take a very long time to be a significant factor. There are no doubt some entrepreneurs in India who have tried to charge too much - but I think this is in the more popular current locations for business which being as crowded as they are, the demand is allowing the higher asking prices. As other, smaller cities and adjacent areas come online, businesses will simply go there instead.
As good as India's infrastructure is compared to most developing countries, it's not everywhere, and part of the rising costs I mentioned is that their electrical is strained to the point of breaking right now. You also have to get the education centers up and working outside the cities. Then as these people's education levels rise and they start demanding more and more internally, people moving in from the rural areas won't be going to work so much for export production, they'll be producing internally for China/India.
Have to agree fully with BozemanMT on housing; it is going to get real ugly real soon.
Yeah, I'm buying an exceptionally cheap place right now that I'll break even on in three years even if I end up having to walk away from the place.
Waitone raises a good point too, it is not only wages that make these and most third world countries cheaper to operate in.
Yeah, I'd almost forgotten about the looser labor laws, safety specs, and most importantly pollution controls. The one thing I'd maybe support tariffs for.
The good news, is that at the end of this Chinese and Indian industrial revolution is that a much larger portion of the world will be involved in the world market. They will begin to rise above substinance (and sadly, from below substanince) living, and begin to buy electricity, cars, entertainment, cell phones, televisions, computers, medicine and houses.
I agree with this. Not only that, you'll have more people in the 'first world' status, contributing to the advancement of humanity. This will allow us to gain even faster.
Oh, Drewtam, part of my point is that the price of goods won't continue to fall because of labor/enviromental savings, though they'll continue to fall for technological advances. What I'm saying is that as we move from localized economies to global ones, because we're basically the top of the heap, there's pressure for our wages to equalize with everybody's. Therefore there will be downward pressure on our wages and upward pressure on low wage countries like India & China. Even if their native currency wage doesn't go up, their currency should become stronger relative to the dollar, and that makes imports more expensive.
Even the enviromental controls should even out eventually. China's putting up with a lot of pollution right now for their industrialization, but I see that changing this generation.
Once it equalizes out, we'll all be better off, but until that happens we're lucky to hold on. I'll say this: Once it's more or less stabilized(change always happens), even the citizens of the USA will be better off, but it's a case of we have the least to gain and the most to lose.