The "low cost labor" game has been manipulated by China for a long time now. They realize it is the only "strength" they have to compete in a global market (because the Chinese regime has power to dictate their labor force). Now that wages in China are rising (normally as would be expected), they are willfully ignoring regulation to lower costs. This article describes:
https://www.scmp.com/tech/article/2...a-meng-wanzhou-told-staff-one-may-accept-risk
But the most relevant quote from the Huawei founder is:
“The US has very strict compliance policies, but American companies are used to it,” Ren said. “Nobody dares to flout the law, it has become a habit, and they can still achieve high speeds. Our company has not yet formed this habit, that is why communication costs are too high.”
The important point is how the above quote links low costs to non-compliance.
We always accepted that global competition is inevitable, but deliberate non-compliance with regulation is not acceptable. People in the US who end up displaced from the workforce are derided when they cry foul, but proper competition requires compliance with regulations. Displaced US workers really do have a valid gripe when other players don't have to comply with rules.
Also, China has failed to open its markets to foreign competition - and most likely never will. Again, competing for one's own "slice of the pie" was always inevitable, but if the pie is growing so does opportunity - this was "the deal" we thought we where making. China has manipulated the system by being invited to compete, but not contributing to global opportunity growth by opening markets.
The really bad part of the "cost of labor" game is how the US government has let US employers exploit foreign labor to drive down costs. This really has harmed workers in the US who are now starting to realize how their own government and industry has conspired against them. This has been most recently severe in the tech industry. Over the last 20-30 years, a career in the tech industry was considered the best way for upward mobility in the US. But now, there are a large number of mid-senior level workers in tech who are displaced from the industry, so the "deal" has been broken. Keep in mind, a large number of these now displaced workers have retired parents who were members of the blue collar workforce (and are voters in the "blue wall" - duh). Parents who worked two jobs to put their kids through engineering school are not taking it kindly when their kids are getting screwed out of jobs when they hit 40. This has dissuaded people from entering STEM fields altogether. If you don't believe this, take a walk around an engineering school campus - and notice how many students are foreign nationals (I'll let you conclude which nationality has become dominant).
Even worse, tech monopolies have killed the tech industry by their "winner take all" paranoid disfunction. Big tech players exert control of venture capitol firms, buy out startups to prevent future competition, and use unfair business practices that disadvantage smaller companies. This has not only run the "innovation pump" dry, but it has burned it out.
This year's tech stock slide is evidence it's going bad. It will only get worse.
[doublepost=1545082863][/doublepost]Oh one bit of relevant history regarding telecom: The Huawei 5G "game" contains very important history.
Huawei only has 2 competitors in 5G: Ericsson, and Nokia.
Nokia ended up acquiring Lucent, which was once owned by the French company Alcatel. Alcatel acquired Lucent after Lucent and Bell Laboratories were spun off from AT&T in 1996. Alcatel maintained a telecom monopoly in France which Lucent could never penetrate due to unfair the monopoly supported by the French government. Yet Alcatel was not restricted from selling into the US telecom market. Now the USA has ZERO players in telecom/5G. So if you need an example of how unfair competition harms industry, here it is.
