7 December 2005 - China is poised to dominate the hi-tech sector of the global economy, according to a new report published by Euro-MP and trade expert Caroline Lucas ahead of next week’s World Trade Organisation (WTO) talks in Hong Kong.

‘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.

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.

“Anxious EU workers have 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,” said Dr Lucas, Green Party MEP for South-east England and a member of the European Parliament’s International Trade Committee and its delegation to next week’s Hong Kong summit.

“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 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.

“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 argues.

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

“The US has acted as the EU’s canary down the mine of hi tech trade – and its economy has been left reeling and this must be a warning to us,” 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.”

ENDS