China rushing ahead, Mexico stuck in the past
Hi guys! I guess most of you are at the beach enjoying your vacations or at Disney learning real-life lessons such as making your own bed or cooking (no more maids for you guys, AH). Once this period is done you will all rush back to your good old habits of reading your economic news and participating in our discussions... ahhhhhh a Prof can dream no?
Anyhow, I heard about the MINT today, anyone knows who they are? Hint: they are basically the new BRIC(S). On the same topic, I heard an interview of a Mexican government official (a minister I believe) that was all happy that a good amount of companies are now leaving China and coming back to Mexico, bringing with them job opportunities for his country.
China has developed so much in the past few years that it now has higher wages than a whole lot of other countries, such as Vietnam and Mexico. For those who had Macro with me last semester we had a podcast about the new Chinese strategy (please tell me you remember), which was in part to increase the living standards of their citizens so they feel more confident in their future and they can start spending more... as such boosting domestic consumption. One of these strategies to increase living standards was to change focus away from low-value industries and towards higher-value ones, letting wages rise in China.
During that time, Mexico did not progress in any significative way... which is why these low-skill jobs are going back to their country.