M&G's Vaight: China cannot rely on cheap labour for long

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Investors in China must look to companies not reliant on cheap labour for their competitive advantage, as this will soon fade, says M&G's Matthew Vaight.

The days are numbered for bulk exporters which are a mainstay of many China equity portfolios, he adds. "You cannot build an economy to sustain 1.4bn people on making cheap toys and textiles. The Government is realising this, and China is now the second largest sponsor of R&D in the world, after the US," Vaight says. "China is now competing not just on being cheaper. In more and more industries, it will become a strong competitor to Western companies." Vaight's comments come after prolonged strikes over pay by staff at Chinese parts manufacturers for Japanese car giants Toyota and ...

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