7th December 2005

Massive threat to Gloucestershire 'high-tech' businesses

China is poised to dominate the hi-tech sector of the global economy, according to a new report published by Green Euro-MP and trade expert Caroline Lucas ahead of next week’s World Trade Organisation (WTO) talks in Hong Kong. Gloucestershire Greens warn of huge impact on local industries.

‘The EU’s hi-tech future: The last colonial delusion’ reports that professional jobs previously thought ‘safe’ from ‘outsourcing’ – such as the media, tutoring, medical provision, architecture and the law - are already being transferred to Asia, and that China is set to eventually dominate that sector with a fifth of its  exports  already classified as hi-tech (i). Dr Lucas argues that with 300 million rural people expected to move to China’s town and cities by 2020, and with an increasingly well-qualified workforce - China produces two million graduates, including 250,000 engineers, every year - the trend is set to accelerate dramatically (ii).

Philip Booth, a Gloucestershire Green party spokesperson said: "We have already seen more and more manufacturing and service jobs disappear to China and India, all the while being reassured by our Governments that the move to hi-tech is the answer. This is little more than a colonial delusion. With their huge numbers of
cheap, highly trained engineers and hi-tech graduates, China and India are poised to overtake the EU and the rest of the world in the hi-tech sector too - this is bad news for businesses here in Gloucestershire."

Philip Booth said: "The US has already seen 'high-tech' services shift to Asia and its economy has been left reeling. This should be a warning to us, yet there appears to be an enormous complacency amongst the Government and business community about this threat (iii). I fear many local businesses are not even aware of the dangers. If Gloucestershire businesses want to see a future then it is in their interests to ensure we start a proper debate on how international trade rules can be made to benefit both rich and poor countries."

Philip Booth added: "We urgently need to build a trading system based on high social and environmental standards, with quotas where necessary. This would be both fairer and more sustainable for workers everywhere."


International trade under huge strain

Dr Lucas, Green Party MEP and a member of the European Parliament’s International Trade Committee and its delegation to next week’s Hong Kong summit, said: “This in turn will place the system of international trade governed by the WTO under great strain, as richer nations shut the door on free trade to protect jobs – and votes – at home, exactly as we saw in relation to textiles earlier this year.”

She warned that the main losers are workers in China itself, which maintains low wages through poor working conditions and lack of democratic participation in the work place.

Dr Lucas added: “The Hong Kong summit must agree to investigate the impact of China’s rapid development as a trading nation on both developed and developing nations: the economic, social and environmental conditions  of the majority everywhere must be protected from, not undermined by, the impact of international trade. The EU must learn from the experience of the US, which is facing an ‘offshoring crisis’ as jobs are transferred to low-cost Asia and US workers are laid off."

The report shows that highly skilled jobs ranging from analysts in all sections of financial services to hi tech engineering are already relocating to Asia. Disturbing examples of previously ‘safe’ hi-tech and professional work now being  ‘outsourced’ from the US to Asia, include:

• News agency Reuters  transferring editing and picture-caption writing to Singapore
• ‘Medical tourism’: private hip replacement operations being offered in the India for less than half the US cost – even allowing for airfares.
• Indian companies offering "homework outsourcing" charging American students $20 an hour for personal tutoring, compared with $50 or more charged in the USA
• A Washington DC firm employs a ‘virtual secretary’ who, based in Pakistan, reports for work in the US via video link

Dr Lucas said: “The US Bureau of Labor Statistics’ forecasts show that the future for the US is not hi-tech, rather the majority of new US jobs in the coming decade will be in domestic services that do not require a college education and are lower paid. Of the nine occupations projected to have the biggest growth in coming years the average pay of five of them is below the poverty line for a family of four. This will be Europe’s hi-tech reality too unless world trade rules are changed to foster economic security for all.”

The MEP added: “We need an urgent debate on how international trade rules can be made to benefit both rich and poor countries in light of China’s development   – if its leaders meeting in Hong Kong don’t rise to the challenge now then, ironically, China’s engagement with the WTO could be the beginning of the end for the free-trade system it embodies.”


Notes:                

(i) ‘The EU’s hi-tech future: the last colonial delusion’, by Caroline Lucas and Colin Hines is available at www.carolinelucasmep.org.uk or from Ben on any number below.

(ii) Dr Lucas will be representing the European Parliament at the Hong Kong talks – for news and comment from the talks, which run from December 10th-16th. For more information please contact Ben on 01273 671946, 07973 823358 or ben@greenmeps.org.uk

(iii) See Glos Green party letter re 'Bra Wars' earlier this year