China’s Decreasing Export Market And Power in Relationships
The strength of power in a relationship is affected by each party’s alternative option. For example, if a person only has one friend, who is very popular and has a hundred friends, then this person is considered to be weaker in the relationship, because his popular friend has a lot more option than he has. Because of the fact that the more popular friend can easily turn to another friend, the less popular person must offer more resource to the more popular one in order that his popular friend won’t leave him.
This theory can be applied to illustrate the dynamic of international relations. The article cited reports the recent decrease of China’s labor market. The shrink is mostly caused because of the decrease in export market. The power in relation theory can explain this result.
As the expansion of China’s economy creates opportunities in many other sectors besides manufacturing sector, workers now have more options, and they now have more power in their relationships with the manufacturer they work for. In other words, they have more outside options. Because manufacturers still need people to work for them, they have to raise wages-provide more resources-to attract workers. As a result, Chinese factory workers now own higher wages, which drives the labor cost in China higher than in many other economies. As the article points out, Vietnamese and Bangladesh workers earn less than half the wages of a Chinese worker. Thus, China’s labor force become increasingly less attractive to other countries because they now have more outside options which can give them more utility. Hence, “Rising costs are driving many companies in a variety of sectors to relocate business to a wide range of other countries…Of those, almost half are moving into other developing countries in Asia, while nearly 40 percent are shifting to the United States, Canada and Mexico.”
In the case above, because China’s factory workers have outside options: jobs in other sectors, their power in the employer-employee relationship is enhanced, so they can ask for more resource, which, in this case, is wage. On the other hand, because China’s labor force is becoming more expensive, importers now have more outside options that are less costly. Thus, they have more power in the exporter-importer relationship and can turn their backs on the less desirable trading partner, which, in this case, is China. This case illustrate the concepts of power in relationships nicely.
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