Despite the fact that China has been the world's economic favorite for the past 40 years, the balance of world economic power has shifted to some places that cannot wait.
In fact, we are already beginning to see some signs that other nations around the world are kicking up to remove some of China's manufacturing skills.
And who knows, we could be witnessing the creation of the next generation of economic superpowers, right in front of our own eyes.
But the reason why this is happening is a bit complex. It started a few decades ago in China in 1970, when the country began to change its economic policy from communism and more towards capitalism.
Specific economic zones will soon be built where large ports and factories will be built that will maximize productivity and efficiency. And once these economic zones were opened up to foreign trade and investment, China's economy began to explode.
History
In the 1980s, many Fortune 500 companies started manufacturing their products in China because China could manufacture their products with similar quality, but at a lower price than if they were made in the west.
And this was due to the extremely low wages earned by Chinese workers, combined with other factors such as tax laws and import / export efficiencies.
So all of a sudden, if a competitor chose to manufacture their products outside of China, they simply couldn't compete on price, which would have likely bankrupted them.
And because of this, in the 2010s, a third of all products on the planet were made in China.
In the span of 50 years, China has become an impoverished nation of farmers, a nation that has the second largest economy in the world, behind the United States.
But some weird things started happening in the past few years.
Here's a question ... what happens when a country that builds its economy on the basis of low labor costs, repents, becomes successful and wealthy?
In 1990, the average annual salary for a Chinese worker was approximately $ 150 USD. For 2005, it was $ 2,800. In 2015, it was $ 8,900. And starting this year, the Chinese worker will earn around $ 13,500.
That's a massive increase that has seen an average manufacturing worker's salary rise by more than 8,500% in the past 30 years.
And what this means is that the cost of making products in China has become much more expensive than it used to be. Companies cannot manufacture products at an 80% discount in China, as they used to. And because of this, we actually started to see a decline in manufacturing in China in 2016, where for the first time in countries' modern history, their manufacturing output actually decreased by 2% during that year.
But that was just the first factor that came into play. After 2016, China saw modest increases in manufacturing output again, until the United States imposed tariffs on China's imports. This caused a decrease in Chinese imports to the US. USA by 7% in 2019, and forced many companies to start looking for products in other countries.
And if that's not enough, privacy concerns and tensions between China and the western world have been increasing since the country began to take part in the global technology sector.
Since then, governments around the world have been actively trying to push Chinese technology out of their countries, while encouraging companies to manufacture their products in-country instead of China.
In fact, last week, the United States departments of justice have requested that the FCC terminate the China Telecommunications Authorization in the United States, citing it as a national security risk.
And all these things, from rising labor costs, to geopolitical problems, have brought us today ... and the pandemic.
You see, even though Chinese manufacturing has slowed in the past decade, the country remains the world's largest manufacturer.
India?
Indian economy China's economy. Vietnam economy. Economy of Mexico Economy of the United States.
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