I think it was inevitable. 10% growth is not sustainable, even in an emerging market. I remember reading last year about the new “ghost cities.” This could be very, very bad for the world economy.
An interesting and comprehensive article, however, it failed to mention one possible factor that could have a major effect on China’s economy, and those of the rest of the world’s nations. While U.S. businesses who outsource to China or other countries would scream, in the event that Obama and a Democratic congress gets elected, there’s the chance that small tariffs would be imposed on imports of items that could be manufactured here. This would have a number of positive results. First, it would be an incentive for U.S. companies to hire more employees here, reducing the unemployment rate drastically. Second, it would be a nice source of income for the government helping it reduce the national debt and possibly fund some of the services that have been severely curtailed.
China would probably have to respond by lowering the value of their currency, and I haven’t bothered to figure out what effects this would have on their banking system and their economy, but it would be great.
An interesting and comprehensive article, however, it failed to mention one possible factor that could have a major effect on China’s economy, and those of the rest of the world’s nations. While U.S. businesses who outsource to China or other countries would scream, in the event that Obama and a Democratic congress gets elected, there’s the chance that small tariffs would be imposed on imports of items that could be manufactured here. This would have a number of positive results. First, it would be an incentive for U.S. companies to hire more employees here, reducing the unemployment rate drastically. Second, it would be a nice source of income for the government helping it reduce the national debt and possibly fund some of the services that have been severely curtailed.
China would probably have to respond by lowering the value of their currency, and I haven’t bothered to figure out what effects this would have on their banking system and their economy, but it would be great.
Occam
Bravo Occam, Bravo! The cost benefit analysis of our hyper trade with China is still being analyzed.
People need to wake up and stop heralding the wonders of cheap goods that flood our markets. Most of those goods are of super-low quality.(some are toxic by golley!)
The Banker/Merchant elite want to turn us all into under-educated, automatons who shop at Wal-Mart and work at Wal-mart or some other place for $9.50/hr. No health insurance.
Somebody is getting rich off of trade with China. The rest of us are going to have to be content with glow in the dark flip-flops and crappy junk that doesn’t work.
People need to wake up and stop heralding the wonders of cheap goods that flood our markets. Most of those goods are of super-low quality.(some are toxic by golley!)
Like the gypsum based wallboards which had formaldyhyde in it. Don’t forget the baby milk scandal with the melemine in it either. (Apologies for anything I mis-spelled.)
One of the big complaints I get from customers is that so much comes from China that it makes it difficult if not impossible to “buy American.” Some tell me it’s a deal breaker and that they’ll just go somewhere else. They usually come back when they find that the situation is no different with my esteemed competitor!
Equal Opportunity Curmudgeon - 07 July 2012 10:25 PM
People need to wake up and stop heralding the wonders of cheap goods that flood our markets. Most of those goods are of super-low quality.(some are toxic by golley!)
Like the gypsum based wallboards which had formaldyhyde in it. Don’t forget the baby milk scandal with the melemine in it either. (Apologies for anything I mis-spelled.)
One of the big complaints I get from customers is that so much comes from China that it makes it difficult if not impossible to “buy American.” Some tell me it’s a deal breaker and that they’ll just go somewhere else. They usually come back when they find that the situation is no different with my esteemed competitor!
Yup and the poisonous dogfood too. I have said it before here on this forum, I will gladly pay 30-50% more for American products. It’s usually worth it.
I will also gladly buy Canadian, British, German products and some others. They have high standards, good quality control and aren’t just now launching their industrial development.
So for me, it’s not just Buy American; Chinese and other nations products are just junk. You’re seeing it more and more in the reviews section of Amazon and other places.
Equal Opportunity Curmudgeon - 07 July 2012 10:25 PM
People need to wake up and stop heralding the wonders of cheap goods that flood our markets. Most of those goods are of super-low quality.(some are toxic by golley!)
Like the gypsum based wallboards which had formaldyhyde in it. Don’t forget the baby milk scandal with the melemine in it either. (Apologies for anything I mis-spelled.)
Oh gosh, you’ve reminded me there’s worse than formaldyhyde in some of that Chinese Shitrock.
Mind you, this is sort of yesterday’s news and I would hope it’s no longer an issue, but it’s a lesson. And if they can build huge cities with no intention of anyone living in them… well heck, what else might they be capable of.
If they’re using sheetrock that releases formaldehyde in the living spaces of their own workers that would be very clever. Since it would take quite a few years for the formaldehyde effects to be seen, it could mean that workers would be dying off just a short while before they would retire, thus saving the government huge amounts of pension and mendical costs.
Wow. Do a Google image search on “China ghost cities”. Incredible.
Yeah, saw a documentary about that. It’s really weird that they put up something like this. They say this is somewhat related to Agenda 21, were they are working on everybody to live in cities and getting them out of the wilderness. Maybe, this is what they are for?
It is possible China’s economy is in for a hard landing, but the long-term growth picture is real.
It is still a nation composed of 1/2 peasants, meaning economic growth shouldn’t be too hard. Just putting someone from the fields onto an assembly line vastly increases that worker’s productivity.
Developed nations, by contrast, have no more easy labor gains to make. They have to increase their economies by developing new technologies or new ways of doing business.
Developing nations grow fast because they don’t have to rely on innovation for growth. All they need to do is get people off farms into factories.
China still has some way to go before it looses that advantage.
It is possible China’s economy is in for a hard landing, but the long-term growth picture is real.
It is still a nation composed of 1/2 peasants, meaning economic growth shouldn’t be too hard. Just putting someone from the fields onto an assembly line vastly increases that worker’s productivity.
Developed nations, by contrast, have no more easy labor gains to make. They have to increase their economies by developing new technologies or new ways of doing business.
Developing nations grow fast because they don’t have to rely on innovation for growth. All they need to do is get people off farms into factories.
China still has some way to go before it looses that advantage.
One point everyone seems to miss in these analyses is that it is much cheaper to build new facilities on green field sites than to modernize existing plants where they stand; particularly when they can be built in countries where environmental regulations are non-existent or not enforced. This was one of major reasons for the industrial abandonment of the NE US.
Don’t worry! It’s all under control. Listen to this Oppenheimer Funds portfolio manager put all your worries to rest. Are China’s Ghost Towns a Reason to Run? (Bloomberg, 6/18)
