China Growth Demands Urgent Response

New Zealand must urgently increase its investment in skill and economic development if it is to have a chance against China’s growing manufacturing strength.

That’s the key message Council of Trade Unions president Ross Wilson has brought home from this month’s visit to China as part of a CTU delegation.

“The world has been changed by the emergence of China as a major manufacturing nation, and New Zealand must find a way to compete,” Ross Wilson said today. “Paying low wages is not the answer – if we go down that route, we’ll be stuffed. Only by training and encouraging skilled workers, and paying them decently, can our economy survive and grow.

“Let’s have the debate and challenge the political parties in election year to present their strategies.”

China’s GDP grew 9.4 per cent in 2004, and it created some 23 million new jobs every year. Ross Wilson said the only way a small country like New Zealand could compete was at the high end of the market.

“We’ve got to boost our design and innovation to produce high value products for niche markets,” he said.

“Even in that respect China is on our coat-tails. We saw outstanding examples of Chinese manufacturers using innovative and leading edge technologies to produce top quality goods.

“It means investing more in developing a skilled workforce, and paying people fair wages. While we remain a low wage economy, we’ve got no chance of boosting our productivity or innovation – and they are the only things that will save us as China’s manufacturing becomes more and more efficient.”

New Zealand was at a crunch point, Ross Wilson said. “We either see that the best thing we have going for us is our potential to be smart, quick and to think outside the square, and give working people the encouragement and payment they deserve, or accept that we’ll slowly go down the gurgler as our pay scales become more and more third world.”

While shifting production off-shore to China might be seen to be a solution for some businesses, it was no solution for the 300,000 New Zealand manufacturing workers or the New Zealand economy, he said.

© Scoop Media