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on 11 May 2012
I really enjoyed reading this book. I am hungry to learn more about China and like everyone else trying to workout for myself where it's story is leading it and by implication the rest of the world economy. Reading this book has made me feel like I have substantially improved my understanding of this extraordinary country.

The author is an American of part Chinese heritage. Add to this his economics background and thriving Chinese business in market research and he is well qualified to be a type of ideal "our man in Beijing" correspondent. However he does provide a tangibly sympathetic and pro China (and it's leadership) feel to this book.

I found the "End of Cheap China" thesis suggested in the title to be both less central and not as completely convincing as one could have expected. The book is more like a very good synopsis of what is happening in China generally rather than a focused treatment of this specific economic question. In terms of casting doubt on the thesis of China becoming too expensive for cheap manufacturing, there was a section which detailed the high wages of seamstresses in a furniture factory on the one hand, but then an example of a couple whose husband returned to the countryside because he could not find high paying work in another section. For me a mixed picture emerges rather than a black and white case.

The labour markets in China are obviously tightening a bit, and many would think this is long overdue, but I did not read anything in this book which convinced me that China is likely to see bottom end wage rises like which has happened in South Korea any time soon. Part of the reason why China's rise has been so significant to economists and so invasive in foreign markets, has been the issue of stagnant labour costs alongside rocketing technology advancements. I am not sure whether this book is prescient in that it is highlighting that wage rises are about to surge, or premature, in that the author is over emphasising specific skilled labour markets which are tightening rather than wages across the board. Time will tell.

Interestingly he notes that even in the face of higher labour costs, although some businesses could be tempted to migrate to less developed countries, many enterprises still will find an incentive to remain in China due to positive externalities such as infrastructure. This reminds me of a section in Paul Collier's The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It in which he notes that: "In the 1960s and 1970s the rich world dominated global manufacturing despite having wages that were around forty times as high as those in the developing world. Why did this massive wage gap not make developing countries competitive?" p81-82.

The author is generally very positive about the central party leadership of China, and takes the believable line that many failures and protests are caused by corrupt officials or systems at local level. He tries to make us understand that few in China are unhappy with the central leadership, but it is local issues such as forced evictions by local officials and property developers which cause the visible dissent seen on TV by the West. This kind of sounds plausible, but, much like a large western company, it could be argued that if the central leadership is strong enough and motivated enough, it can usually enforce good practice on it's lower levels. Perhaps this weak ability of the central leadership to enforce good practise on local party officials is intrinsic in a political system where the centre derives no absolute moral authority from an electorate, and instead has to rely on the broader communist party membership for its support and legitimacy? The author seems to have faith that things are improving, so perhaps this enforcement will improve.

Other interesting subjects revealed are: the gradual move towards domestic consumption rather than exports, the worrying state of the food supply chain, the weak enforcement of fake brands (did anyone see the edition of Top Gear from China, the copy cars which the state refused to acknowledge were copies!). He also mentions the strongly growing construction sector and tries to answer fears that many see a bubble forming.

Throughout the book there are boxed snippets of business advice which although they feel out of place at times, seem very incisive and are interesting. For example I can perceive as accurate the observation that there is a distinct attitude of Chinese consumers who will buy extreme luxury designer goods such as Gucci handbags alongside very budget clothes and bypass the Marks and Spencer's middle ground which Western consumers go for. Will cultural proclivities such as these help the West to find export markets in China? Also interesting is the revelation that KFC is considered "healthful" in China because they trust the food supply chain it has more than the domestic brands. Is there a role here for Western companies?

He also acknowledges the fact that the perceived over valuation of China's currency is a divisive issue for many in other countries. He tries to defend the central leadership by presenting the difficult objectives they are pursuing and the perilous dangers they face if things go wrong in their crowded populous country. He notes that the currency stance of the leadership is a: "bottom-up generated policy" p115, but this is equivalent to saying that it is the right policy because it is favoured by Chinese people. This does not make it fair in terms of participating in the world economy. Perhaps the US and other Western governments should equally put tariffs on Chinese imports and equally observe that this is a bottom-up generated decision? (see my profile). He replies to these currency concerns by noting that China's currency has appreciated by 25%, but for me and probably for many other readers I think there is further to go along this route. The over valued currency issue taints his Darwinistic and : "it's [China's] greater adherence to free trade and capitalism than America's" p200, conclusions towards the end, but none the less he is right on the central issue: China is thriving in an arena where the West has previously been dominant, . . . and the West is feeling it!

All in all this book was a good read and I would strongly recommend it.
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on 11 June 2012
This is one of those books that seems to presume that everything is reducible to China and America. It is aimed for airport book shelves (light reading)and is subsequently laced with anecdotes and simplistic generalizations. It is an excellent marketing book for the Chinese government; this is probably not surprising as the author continues to work in China and criticizing the regime is not going to add to guanxi. Lines like 'most everyday Chinese do not care about measures limiting Internet access' are uninformed: what is an everyday Chinese? How does he know this? Most Chinese (everyday or not) know there is little they can do. Aside from the lack of critical analysis and many incorrect statements (i.e. the price of coffee in Perth Australia is over $US7!!) the book's main proposition is correct. China is moving up the value chain and the cost of labor is getting more expensive. There is some useful information if you can get past the smooze. However the book does not deal with China's informal labor economy in any meaningful way; there is only a brief mention of shanzhai culture (and this is in the context of one fake sandwich shop)and while there is a chapter on real estate there is no mention of the problems of how government manipulates real estate pricing via land use regulations.
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on 2 November 2012
Dear All,

I am currently half way through reading this book and the first half has been very informative and in my humble opinion very well written. Shaun uses a good style of language for any reader to get a good understanding of China.

I am a banking professional with a specific focus on individuals that reside in the Asia Pacific and had bought this book in the hope to get a better understanding of my client base. This book has so far delivered me in depth knowledge - which has resulted in large success.

I would be happy to endorse this book for its layout, style, detail and relevance to a world in which the dominance of an East is quickly raising and where wealth is now raising from the 2nd generation.

A clear winner from similar books and I would definitely recommend you have a read if you have any interest in this part of the world or a fellow banking professional.

If any of you potential readers wants a further insight feel free to contact me directly.
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on 24 December 2013
The book made a strong impression on me from the first pages and I knew I would postpone all other readings before finishing it. It's very well structured and comprehensive and you will find the title very well covered in the content. I would recommend the book to both China fans and those who still think that China means mainly cheap low quality goods. I am glad that I chose this book from a very long list of appealing titles because reading it was a very rewarding experience. I'm looking forward to reading more materials written by this author.
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on 6 June 2012
Shaun Rein is undoubtedly a clever chap. Equally, his first hand experience over many years in China shows through in this book. Anecdotes are at times amusing, at times touching, and always add a human dimension to the story. Yet the book left me feeling something wasn't quite as it should be - a bit like a piece of the jigsaw was missing. Don't get me wrong, this is a good book, maybe even a great book, and I recommend you buy it. Nonetheless, I have two criticisms. The first is on a point of style which I happened to find somewhat irritating, namely the repetition of the book title within the text in such a way that I felt I was being engaged in some Pavlovian experiment. I'm over that now! My main criticism lies in that I couldn't help but feel the book was heavily self-censored, and that the author always had one eye on his business interests. Perhaps therein lies the paradox. Unless you have the experience and contacts that Shaun Reid has, writing such an informative book wouldn't be possible, yet if you want to maintain those relationships and contacts, you really can't afford to be too critical. If I was the author I'd no doubt be just as self-censoring, so it's not a criticism of the author. It is a criticism of the book, and I feel if the author wasn't so restrained at times (to balance his obvious enthusiasm for China) then the book would somehow feel more rounded.
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on 6 July 2012
Shaun Rein digs deeper into what exactly is changing China, and by extension the rest of the world. Mr Rein is a suitable candidate to fulfill this task, as he himself was 'Made in China' as it were - he runs a very successful market research and consultancy firm there. Therefore, or despite of this fact, The End of Cheap China is not a heavily theoretical read per se, but packed with entertaining anecdotes (e.g. the opening anecdote in which Mr Rein described the prevalence/nuisance of prostitution in business hotels). Some readers may find the more descriptive and journalistic style of writing less appealing than a more academically charged book, but I found it works very well to get Mr Rein's message across. That is to say, China's economy and society are changing profoundly, moving up the value chain, with the international community still largely covered in a veil of ignorance. This is an excellent attempt at lifting that veil and raising important questions about China's future, and thus our own.
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on 7 January 2013
Provides you with a good perspective on the ground reality in China nowadays, with some very interesting facts and insights into the modern Chinese consumer. A very good read.
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