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Is the Era of Cheap Chinese Products Over?

Toyota strike, floating Remnimbi raise ominous concerns.

by on Jun.23, 2010

Will demand for better wages hurt the Chinese auto industry? A rise in the value of the Remnimbi could be the real problem.

Toyota has again suspended production at its main Chinese assembly plant in the wake of a walkout by workers at a key supplier facility.  The second strike in a month at a joint venture partially owned by Japanese partsmaker Denso, hits hard a Toyota facility with the capacity for 360,000 vehicles a year.

The walkout comes in the wake of similar strife at a Honda transmission plant in China that cost that maker thousands of units of production and eventually led Honda to approve significant increases in wages and benefits to get angry workers back onto the line.

Free and Worth It!

These and other recent labor confrontations come as a surprise to China-watchers who know how much emphasis the Beijing government puts on maintaining the appearance of social order.  And they’re all the more unusual considering the traditionally company-friendly approach unions have played in China.