Skip to comments.China's economic shift set to throw the West off-balance
Posted on 05/28/2014 6:39:13 AM PDT by Cringing Negativism Network
Chinas new leadership is trying to create a shift in its economy from low-wage, investment-driven growth to a consumer economy driven by domestic demand and when that change happens, the rest of the world will have to change too.
Thats the message Stephen Roach is trying to deliver, with some urgency, in his book Unbalanced: The Codependency of America and China.
(Excerpt) Read more at cbc.ca ...
All we need is some folks in our gubmit who could get a C or above in a REAL economics course.
Really, imagine bimbos such as Pelosi, Boxer, and Warren....or bimboys such as the Obamadork, Reid, or any of the MSM in any class where the math exceeded adding past the number 10.
See my point?
The Chinese Communists will need to let go - stop funneling capital to large, state-run industries, allow banks to fail, stop trying to pick the winners of every industry
In sum, they will have to stop behaving like one-party, communist central-planners, whose ultimate goal is to keep absolute political control.
Its not in their DNA.
I have been confused for many years, about China opening up to the world, and introducing free market reforms. Because they are still communist, how do they reconcile communism with the free market conditions they allow nowadays? Would Chairman Mao recognize today’s China? Would be approve? Is he turning in his grave at how they have changed his communist utopia????
It’s all about the old guard becoming more pragmatic in order to keep their power. It’s not about ideology any more.
Then, if it’s not about ideology any longer in China, the handwriting is on the wall, that communism will eventually fall in China.
I’ve heard that as people experience more economic freedom and higher living standards, as is happening today in China, that they start to agitate for more political freedom too. A revolution to officially get rid of communism could happen in China.
The first allowed the peasants to start using part of their land to grow whatever they wanted. This allowed people to eat well for the first time in decades (the 1980's). They then allowed the production of basic consumer items - and this is generally open as well (although industries must still belong to government organizing structures). Even simple things like furniture trade-shows must still happen under the eye of some bureaucrat from the ministry of commerce.
The Chinese government still keeps direct control of many "strategic" industries - raw materials, transport, certainly energy and of course banking. They may allow competing industries that are still run by one arm of the government or another. Its why they have massive corruption as well. It is state-run capitalism. What I have learned is - the USA is moving in that direction as well.
America now imports something like 440 billion every year, from China.
China imports in turn, something like 122 billion from America.
That is a MASSIVE (and trending larger) trade deficit. China is now the second-largest economy in the entire world. And is (rapidly) growing.
America we need to bring back production, to America. We need to stop building up our number one challenger, and start to build up ourselves.
“Americans consume beyond their means, with their level of purchases outstripping their improved income for the past 20 years. The financial crisis helped expose the damage this is doing, Roach says.
“As China shifts to domestic consumption, there wont be another superpower to provide the U.S. with capital or finance U.S. debt, he argues. That capital could be coming from American savings, he says.”
That will not help. CEOs work quarter to quarter and do not care about long term. It is all about making the next quarters analyst projections. Employees are a commodity not a part of the company. It isn’t just unions that have screwed this up. Upper management and their concern for their own stock based pay is right there.
Isn’t the transformation of China from merely a producer to a consumer good for American production? (Let alone how it creates a just society for China?)
And yet China says they're gonna depend on domestic demand to drive its economy? Yah right!
There is no such thing as a consumer-driven economy.
Prosperity comes only through saving and investing those savings in new production. That creates jobs which ultimately raises the demand for consumer goods. But it is production-driven.
What this means [if true] is that China is going to continue to inflate its currency as the U.S. and Japan have done. I can't imagine why -- it's nonsense and it doesn't work.
They've bought the Keyensian nonsense evidently. They're stupider than I gave them credit for.