Trading With a Low-Wage Tiger
What happens to everyone else when China sucks up so much of the world's economic growth?

When Robert Mao describes the fantastic manufacturing opportunities his company sees in China, he speaks with mixed feelings. "For the first time in the modern era," he marvels, "we have an inexhaustible reservoir of good, trainable labor." But Mao, who as president and CEO of Nortel Networks China has worked in the region for 20 years, also worries about what that means for China's neighbors. For the foreseeable future, he says, almost all new investment by Nortel suppliers will go to China and not to other Asian countries. So, too, he expects, will most major investments by other global manufacturers. "What can Taiwan, Malaysia and the Philippines do?" he asks. "They offer pretty much the same degree of technological sophistication as China but they are more expensive and lack the scale. What will they do?"
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