We’ve heard plenty in the news this year about rising prices hurting export-oriented businesses in places like Guangdong and, more recently, Zhejiang. Clearly some areas of China that were once “workshops” for the world’s cheap goods are pricing themselves out of the market, with the slashing of export rebates, inflation, currency appreciation (though that appears to be slowing viz. the US dollar) and rising labor, material and fuel costs all playing a part. The next step for these areas, local governments hope, is to climb the greasy pole value chain and start producing higher-value goods.

So who’s going to make our cheap furniture and sleeping bags now? Americans?

Not as strange as it sounds. In some cases, according to this interesting article by the Washington Post’s Ariana Eunjung Cha, some low-cost American manufacturers are headed back home. Transportation costs are a big part of it, according to Cha:

With fuel prices at record highs, the cost of sending a standard 40-foot container of goods has gone from $3,000 in 2000 to about $8,000 today, squeezing profit.

So this summer Kazazian, chief executive of Exxel Outdoors, a Los Angeles-based maker of recreational equipment, did something radical: He moved the manufacturing back to Haleyville, Ala.

Soaring energy costs, the falling dollar and inflation are cutting into what U.S. manufacturers call the “China price”– the 40 to 50 percent cost advantage once offered by Chinese producers.

The export model that has powered China and other Asian countries for three decades will be compromised if fuel prices continue to rise, said Stephen Jen, a managing director for Morgan Stanley.

“Globalization has gone a little bit too far. It has overshot,” Jen said. “We’re not saying Asia is going to crumble, but we are saying Asia enjoyed extraordinary conditions in the past. Now the conditions are changing very quickly because of the energy shock, and Asia is coming under pressure.”

China’s a source of low-cost workers, but no one said anything about slavery — until now, that is. This week has seen a slew of slave, forced and child labor stories in the media. It’s making all those analogies of modern-day China with the Dickensian image of Industrial Revolution-era England ring truer than ever.

The big one was the discovery of nearly 400 slaves in Shanxi and Henan province brick kilns, including 29 children. They were found in horrific condition, having survived regular beatings, 16-hour work days and starvation.

Then there was also the allegation that children, some as young as 12, were being forced to manufacture Olympics merchandise — caps and bags, to be precise.

In both cases authorities were caught flat-footed. The ponderously named BOCOG (the Games’ organizing committee) simply said that the factories hadn’t told them they were using child labor — which Dickensian slave master would? — and that they would investigate. The Public Security Ministry admitted today that they had known about child labor cases three years ago, but hadn’t done enough to stop its “spread”.

There’s no question that the central government would stamp out these cases if it knew about them, but all the same they beg the question: What part did the constantly rising pressure for low-cost production in China have to play in these terrible cases of exploitation and abuse? Also, were these cases symptoms of systemic opacity and corruption, or simply unstoppable instances of rogue abusers? The upshot is we can’t rule out the former until the system actually changes.

On a side note: Check out this post by Positive Solutions, the fly on the wall blog by a foreign English copy editor at China Daily, about the slavery cases implications for investigative journalism in China.

Students in Guangdong province that have to work to support themselves are not protected by labor laws.

New legislation that kicked in earlier this year sets minimum wages for part-time workers at a less-than-princely US$0.95 or RMB7.5 per hour but, as it turns out, these rules can be really more like guidelines or suggestions as far as students as concerned. Reporters from a local newspaper in Guangzhou, the Kuai Xin Bao, reported in March that McDonald’s and Yum! Brands (owner of Pizza Hut and KFC) pay their part-time student employees about US$0.52 or RMB4 per hour.

The scoop prompted much discussion and comments of abuse while the companies maintained they had done nothing legally wrong.

As it turns out, they were right. The labor protection bureau in Guangdong cleared them last week, Forbes reported. Provincial officials declared that the relationship between employer and student worker is not a formal working relationship.

Let’s see. One imagines that said student must have to show up on time. He or she is probably expected to work while at the restaurant that employs him. He or she supposedly receives a salary for his or her work. Yup, can’t see how that is an official working relationship. The students in question are probably flipping burgers in between long study sessions because it’s fun, a distraction from physics, engineering or arts.

At the end of the day, most of these guys don’t need the work, not really. They put on those stylish red KFC caps because they look cool. They could just as easily finance their silly hobbies like the (very) occasional night on the town, eating and sleeping under a roof through myriad other activities like… well… hang on… something will come to me.

Wal-Mart, the retailing giant known for its hostility towards organized workers, is likely receiving the news that some of its Chinese workforce has just formed a trade union considerably well. Why? Because the “union” has been organized by the All-China Federation of Trade Unions, a government organization which seeks not to defend workers’ rights and bargain collectively on their behalf, but to “promote good relations between employers and employees,” as its officials claim. In reality, it is not a workers’ union that is being formed, but a tool of government and management to keep workers in line.

Despite its well-known anti-union stance, Wal-Mart whole-heartedly welcomes them Chinese-style. But that’s because real unions are not allowed in China. All bodies purporting to represent workers must be organized under the ACFTU, a convenient way of making sure they don’t cause any actual reform. China is Wal-Mart’s most important market (as it is for many companies these days), and so the move to embrace the ACFTU is an important step. But not in the direction of greater protection for workers. Quite the opposite.

Wal-Mart announced it would allow its Chinese workers to “unionize” two years ago. Why has it taken this long for one to form? Perhaps its “associates” (as the company calls its employees) really haven’t been clamoring for representation. After all, a Wal-Mart job in China is surely better than toiling in an illegal coal mine. Or a sweatshop. Or prostitution. My gripe is that Wal-Mart is going to hold this up as a badge, showing how it actually stands for workers’ rights, and the ACFTU is going to say, “Look how great we are, we just unionized Wal-Mart!” Meanwhile another mine collapses on a hundred downtrodden in Hubei.