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Public Affairs Insights from the Centre


13 Aug 2010

The rise of the supply chain

George Onisiforou

A series of recent media analyses focuses on a rising number of employee protests relating to the working conditions in China and other Asia countries. Chinese workers, in particular, are demanding better wages and more humane working environments — especially the younger generation who is not willing to work long hours for appallingly low wages. Local authorities are starting to address this issue: China and Bangladesh recently increased minimum wage in some industries in order to narrow income gaps.

At first look, increased wages might strike as a negative economic development for multinationals relying on cheap labour from their supply chains in Asia. However, it will be detrimental not to see the real opportunity here. Better-paid workers will create a rising new consumer market. Companies should start thinking about ways to appeal to these potential customers. There is no better place to start than from their own supply chains.

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