The Chinese earn low wages. In economics terminology, this is called low labor cost. Economists, the media and official documents all call this China‘s "competitive advantage."
　　This cannot answer these two questions: First, in terms of investment environment, developed countries are better than developing countries; then where is the competitive advantage of low labor cost? Second, when an enterprise of a developing country invests in a developed country, say, when China‘s Haier Group invests in the United States, as it has done, does it mean the investor gives up its competitive advantage?
　　For a country, a nation and an economy, low labor cost is decidedly a mark of backwardness. It is not a competitive advantage at all. If a country or an enterprise seeks development not through scientific and technological progresses and management improvement but from low labor cost only, if they promote and use hapless cheap labor as a competitive advantage, it is a primitive, unwise competitive idea, indeed.
　　China is now a member of the WTO. The proposition that low labor cost is a competitive advantage does not hold water theoretically and is harmful in practice.
　　First of all, it strengthens the double-standard nature of the labor remuneration system. "Equal opportunity, same pay for same work" is an accepted international practice. Since China has joined the WTO, we should "dock" with accepted international practices. Labor in developed and developing countries should get the same pay as long as they finish the same work. If within a developed country the principle of equal pay for same work is followed, while another pay system is followed in a developing country, that is double standards. It means exploitation of labor in developing countries.
　　How to break double standards in labor remuneration is a major theoretical and practical problem.
　　Secondly, the proposition weakens an awareness of inadequacy in developing countries. Low labor cost is a matter of fact in developing countries. We can‘t say it is a shame, neither can we call it an asset to be bragged about. It is a mission of every person of insight in developing countries to change low pay for labor.
　　Viewed from a purely productive factor perspective, low labor cost is not a competitive advantage either. With economic globalization, both domestic and foreign businesses face the same labor market. If labor cost is low in both Country A and Country B, neither has a competitive advantage. If, on the other hand, multinational corporations follow the principle of equal pay for same work everywhere, people with professional expertise would be snatched away by multinationals with high pay. What competitive advantage would local enterprises have once all talent is gone?
　　Also, the idea of low labor cost being a competitive advantage distorts social values. Cheap labor - people as worthless laborers - should not be promoted as an advantage. It is true that only development can stand the test of time and that businesses need to make money, to maximize profit. But what is the purpose of development? And of making money? Isn‘t it to make people worth more? A departure from this ultimate objective inevitably distorts social values.
　　If people are worth more, and if pay is higher, the proportion of labor in total production cost will be higher. On surface, an enterprise may make less money and a country may collect less tax as a result, but higher pay wins loyalty of the workforce for the enterprise and a combination of fairness and high productivity for the country. Isn‘t this a competitive advantage that will have a lasting effect?