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Europe is poor so should live within its means
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11-02-2012 7:42amhttp://www.bbc.co.uk/news/business-16918000
For decades the West has lectured the East on how to manage its economies. Not any more.
Now the emerging economies of Asia look like models of steady, consistent policy and sustained growth while Europe, America and Japan are mired in debt and are growing achingly slowly, if at all.
So what can the West learn from the East?
According to former Malaysian Prime Minister Mahathir Mohamad, the message is simple but devastating: Europe must face up to the new economic reality.
"Europe... has lost a lot of money and therefore you must be poor now relative to the past," he reasons in an interview with BBC World Service's Business Daily.
"And in Asia we live within our means. So when we are poor, we live as poor people. I think that is a lesson that Europe can learn from Asia."1
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dolanbaker wrote: »http://www.bbc.co.uk/news/business-16918000
For decades the West has lectured the East on how to manage its economies. Not any more.
Now the emerging economies of Asia look like models of steady, consistent policy and sustained growth while Europe, America and Japan are mired in debt and are growing achingly slowly, if at all.
So what can the West learn from the East?
According to former Malaysian Prime Minister Mahathir Mohamad, the message is simple but devastating: Europe must face up to the new economic reality.
"Europe... has lost a lot of money and therefore you must be poor now relative to the past," he reasons in an interview with BBC World Service's Business Daily.
"And in Asia we live within our means. So when we are poor, we live as poor people. I think that is a lesson that Europe can learn from Asia."
If that's not bad enough, I've just noticed the Euronews voice over guy has serious problems ending sentences with the correct pitch. It's now annoying the absolute **** out of me.0 -
When it starts costing a lot more to produce goods in the Far East, they'll be the ones fucked. Manufacturing will move back to the areas where us paupers live.0
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Its a fair article.. Though the comments about europe only really making money by ****ing about with currencies cant be fully correct.. A fair bit of efficient production goes on here.. The automotive industry and germany spring to mind.. Dont think his vision would fly as-is in the states / uk simply due to cultural differences (my opinion, just a hunch) name me a country that underwent an orderly transition to being poor? How is being poor achieved as a goal? (which is essentially what this guy is advocating.. Seems like a defeatist aim)0
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I think the thread (no fault of your's OP) and parts of the article are misleadingly sensational, particularly the title. If you read the article he comes across a lot more reasonable but I'd have to question his command of English or if he chose to be intentionally provocative. As a leading Malaysian politician I would suspect he should have quite an exceptional command of English.0
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Nope.
They'll just move production to the last untapped cheap labour market, the African nations.
Possibly, but Africa does not as yet have the infrastructure. Possibly only the Maghreb, Egypt, Nigeria and South Africa.
I mean look at a map of the continent at night time.0 -
Possibly, but Africa does not as yet have the infrastructure. Possibly only the Maghreb, Egypt, Nigeria and South Africa.
I mean look at a map of the continent at night time.
Don't worry.
When the wages are near zero, workers have no rights and a corrupt government exists then the infrastructure will appear0 -
The article basically says Europe should stop relying on its financial sector and stop paying employees so much money in it0
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Europe is poor??! Then what is Africa???!0
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Europe is poor??! Then what is Africa???!
Africa is on the rise, Europe is stagnant and in decline, this is not new in world history, the wealth and world economic centre has always moved.
We are just living through another one, the East is usurping the west, the far East is rapidly becoming the world economic centre, the new west if you like. In 10 to 20 years time Europe will look more like South American economies of the 80s, broke and not much going on.
As for banking, it is a key and powerful industry and a big employer why would you want to forego that and the service sector. It is still an area the west can compete with the East, but they to are building up that sector.
I am not optimistic about the wests future, I think our highly indebted economies speaks volumes, we can no longer support them in the long term, we are just not creating the wealth.0 -
Fine, maybe we'll take back our manufacturing jobs from Malaysia and see what his reaction is
I'd pay a small bit more to support Irish manufacturing, well EU at best0 -
I think that we'll (re)start basic manufacturing industries here when China cuts the "dollar" umbilical cord.
At the moment, their cheap goods are as a direct result to the dollar peg, when their domestic market is more mature, they'll let the Yuan float.
End of cheap Chinese stuff, it will be too expensive for Europeans to buy and we'll have to start making our own again, hopefully creating lots of jobs in the process.0 -
Deleted User wrote: »I thought that we were turning Japanese, now we need to turn Malaysian!
:cool:0 -
Deleted User wrote: »I think that we'll (re)start basic manufacturing industries here when China cuts the "dollar" umbilical cord.
At the moment, their cheap goods are as a direct result to the dollar peg, when their domestic market is more mature, they'll let the Yuan float.
End of cheap Chinese stuff, it will be too expensive for Europeans to buy and we'll have to start making our own again, hopefully creating lots of jobs in the process.
Yeah but manufacturing is already moving to other Asian countries. Even firms based in China have moved inland where it's cheaper to operate and even Chinese companies have outsourced some manufacturing plants.
And after China it goes to South America most likely. Brazil and Mexico and similar countries.0 -
Yeah but manufacturing is already moving to other Asian countries. Even firms based in China have moved inland where it's cheaper to operate and even Chinese companies have outsourced some manufacturing plants.
And after China it goes to South America most likely. Brazil and Mexico and similar countries.0 -
Everyone in Europe is very very rich. Some of the very very very rich just arent as rich as they thought they were.
See how rich you are compared to the rest of the world :
http://www.globalrichlist.com/0 -
Everyone in Europe is very very rich. Some of the very very very rich just arent as rich as they thought they were.
See how rich you are compared to the rest of the world :
http://www.globalrichlist.com/
Other countries are catching up, they've got a long way to go, but our (relative) wealth will decline eventually.0 -
Everyone in Europe is very very rich. Some of the very very very rich just arent as rich as they thought they were.
See how rich you are compared to the rest of the world :
http://www.globalrichlist.com/
I am in the top 98% so 2% are better off then me, :eek: I never realised how poor I am.
So my new years resolution is to climb a %.:mad:0 -
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Deleted User wrote: »But chances are, these countries will be selling to China and not Europe/USA and China is really only interested in importing food & fuel. They've already stolen the designs of most hi-tech products by now.
I'm sort of slow I don't understand your point.
Yes but the companies already in China will relocate manufacturing jobs to these other countries. While they export raw materials to China, the coal it so preciously desires, manufacturing jobs will relocate. The expenses of manufacturing in China have risen and will rise to much higher levels. Then, we will see the cheap, and I also believe some high end manufacturing jobs mostly in Europe and Japan, relocate to other parts of Asia and Latin America.
Eventually of course they'll come back to us and it benefits us all greatly as the new middle class in these countries buy our goods and we can export to them.0 -
the Chinese still have some 500 million subsistence farmers, so no labour shortage there.
The point I'm making is that China is keen to import raw materials and oil from anywhere, if a product is made using locally sourced materials, then they'll import the finished product rather than ship the raw materials to China.
Because of their often aggressive trade deals, those products will not be available to the west.0 -
Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 60,171 Mod ✭✭✭✭Join Date:Posts: 59099
Africa is on the rise, Europe is stagnant and in decline, this is not new in world history, the wealth and world economic centre has always moved.
We are just living through another one, the East is usurping the west, the far East is rapidly becoming the world economic centre, the new west if you like. In 10 to 20 years time Europe will look more like South American economies of the 80s, broke and not much going on.
Contrary to popular, China has only once been ahead of Europe when it came to per capita wealth. That was in the Tang dynasty coinciding with the European so called "dark ages". As I said in another thread on this subject a Chinese peasant of the year 1000 would not have had a very different life to a Chinese peasant in 1600, or 1700 or 1800, hell 1900+ When the western nations went into China in the 19th century they had no decent roads outside the cities, never mind railways or extensive canal networks to the degree found in Europe. Compare that with the trajectory of the average person and nation in the west over that time. Manufacturing dominance? China has been kinda here before. They flooded the west with cheap and high quality goods throughout the 17th and 18th centuries. That's why your granny calls the good plates "china". What happened? Europe pretty quickly developed the technology and soon broke their dominance. That's why your granny may call other plates "delph"(from Delft in Holland).Rejoice in the awareness of feeling stupid, for that’s how you end up learning new things. If you’re not aware you’re stupid, you probably are.
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Deleted User wrote: »the Chinese still have some 500 million subsistence farmers, so no labour shortage there.
The point I'm making is that China is keen to import raw materials and oil from anywhere, if a product is made using locally sourced materials, then they'll import the finished product rather than ship the raw materials to China.
Because of their often aggressive trade deals, those products will not be available to the west.
They'll being other nations I mentioned?
I am sorry I have trouble sometime.:)0 -
While it's a popular notion alright, I personally wouldn't agree and history would be more on my side IMHO. Yes the wealth and world economic centre has moved in the past, but it tended to do so in a remarkably Eurocentric/near eastern way(America is in essence a transplanted "European" nation in culture). It's far more rare when it didn't.
Contrary to popular, China has only once been ahead of Europe when it came to per capita wealth. That was in the Tang dynasty coinciding with the European so called "dark ages". As I said in another thread on this subject a Chinese peasant of the year 1000 would not have had a very different life to a Chinese peasant in 1600, or 1700 or 1800, hell 1900+ When the western nations went into China in the 19th century they had no decent roads outside the cities, never mind railways or extensive canal networks to the degree found in Europe. Compare that with the trajectory of the average person and nation in the west over that time. Manufacturing dominance? China has been kinda here before. They flooded the west with cheap and high quality goods throughout the 17th and 18th centuries. That's why your granny calls the good plates "china". What happened? Europe pretty quickly developed the technology and soon broke their dominance. That's why your granny may call other plates "delph"(from Delft in Holland).
That was because China was a feudal society. Would China not have been more advanced technologically and during the Zhou and Qin dynasties? And economically during the Qin?
I don't know about your Eurocentric opinion. Dar al-Islam?0 -
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Deleted User wrote: »the Chinese still have some 500 million subsistence farmers, so no labour shortage there.Because of their often aggressive trade deals, those products will not be available to the west.Rejoice in the awareness of feeling stupid, for that’s how you end up learning new things. If you’re not aware you’re stupid, you probably are.
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Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 60,171 Mod ✭✭✭✭Join Date:Posts: 59099
That was because China was a feudal society.Would China not have been more advanced technologically and during the Zhou and Qin dynasties? And economically during the Qin?I don't know about your Eurocentric opinion. Dar al-Islam?Rejoice in the awareness of feeling stupid, for that’s how you end up learning new things. If you’re not aware you’re stupid, you probably are.
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What does Eurocentric mean in History when China or Mongolia were the economic superpowers was the world Asian Centric. Now that the USA is the world economic superpower is the world American centre.
Europe was always fragmented more so then most the world and economic centres went from Turkey Italy Portugal Spain France Holland England. If you want to see a history of the world economic superpowers follow the hub or the world number one economic cities at anytime you are studying. That is were you will see the most cultural reach and the power of that age.
At the moment only 2 believe or not reach that grade and they are New York and London but I have little to no doubt that Shanghai, Bejing Mumbai will soon replace those.0 -
Yeah their economies are rising quickly, while at the same time they work intolerable hours for very little.
This doesn't give them reason to lecture Europe or the west, as the general idea of an economy is not to be in a position where you have to work a sweatshop level of hours for very little.
Basically its not that they plan at a better level than the west, its's that they plan probably about just as well PLUS they have practical slave labor.0 -
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Possibly, but Africa does not as yet have the infrastructure. Possibly only the Maghreb, Egypt, Nigeria and South Africa.
I mean look at a map of the continent at night time.
There's more lights on in Africa than Australia0 -
Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 60,171 Mod ✭✭✭✭Join Date:Posts: 59099
What does Eurocentric mean in History when China or Mongolia were the economic superpowers was the world Asian Centric.Now that the USA is the world economic superpower is the world American centre.Europe was always fragmented more so then most the world and economic centres went from Turkey Italy Portugal Spain France Holland England.If you want to see a history of the world economic superpowers follow the hub or the world number one economic cities at anytime you are studying. That is were you will see the most cultural reach and the power of that age.
At the moment only 2 believe or not reach that grade and they are New York and London but I have little to no doubt that Shanghai, Bejing Mumbai will soon replace those.
If the pundits are correct and the west is on a slippery slope then China is really in trouble. If you don't have customers, you're outa business. It won't take much either considering their tiny margins. If the west actually starts to slip, then watch said west start play economic hardball and begin a low level trade war, a war China can't hope to win. Certainly not yet. And how might it win such a war? Other emerging markets? Quite possibly, but if they don't start innovating and designing in house they've a long road ahead. Their own people? Nope, not enough with enough spare funds to do so. The US could close it's borders tomorrow and there would be hardship aplenty, but they are sustainable at a lower level selling to their own citizens. The Chinese are not and have a long way to go before they are. On that way there will come a point where their goods will become too expensive, because they'll want more wages. Rock --- China --- Hard place. They may yet navigate these choppy even stormy waters ahead, but they're gonna have to tear up the old maps to do it and that will be hardest of all culturally for them to do IMHO.
TL;DR? To paraphrase Twain "The rumours of the death of the western powers have been greatly exaggerated".Rejoice in the awareness of feeling stupid, for that’s how you end up learning new things. If you’re not aware you’re stupid, you probably are.
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HAAA! HAAA! wrote: »Basically its not that they plan at a better level than the west, its's that they plan probably about just as well PLUS they have practical slave labor.
Maybe they see the sweatshop thing as a phase on the way to better times ?0 -
You have to listen to the dogs barking in the street, I suppose... except in much of Asia, of course.0
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I was thinking a bit more about this today (dangerous ) and the reality is Europe is still extremely rich relative to many Third world countries. Ignoring the top 0.1% of citizens whose incomes skew all the so called average earnings, most people have much more purchasing power than they did 20 years or so ago.
In the 1960s, only those who had well paying jobs could afford to own and run a car, many just used bikes or buses to go to work. Any decline in spending power will have to be severe for a couple of decades before we get back to a 1960s living standards.
There will be a decline as resources become more scarce and their costs rise putting them out of reach of an ever increasing number of people, two car families dropping the second car for example.
Things may look bleak to some people, but we're far better off than 40 years ago and considerably better off than the average third world person.0 -
Everyone in Europe is very very rich. Some of the very very very rich just arent as rich as they thought they were.
See how rich you are compared to the rest of the world :
http://www.globalrichlist.com/
I am extremely dubious about that. Putting in the oppressed employees of FoxConn I get $17 * 6 * 50 ( i.e. their day rate, 6 days a week, assuming 2 weeks holidays) and at $5000 they are in the top 14%. South America is a middle income part of the world, India is trending upwards $2,000, which is lower middle income. China is about where the FoxConn guys are at $5000.
So where are the poor. Subsaharan Africa isn't that much of the worlds population.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita
Look at the map in wikipedia, and then type in $1000 into global rich list. Notice the disconnect. There are only 30 out of 180 countries in the world below $1000.
Edit: here is where they are coming from:
³ Milanovic, Branco. "True World Income Distribution, 1988 and 1993: First calculations based on household surveys alone", World Bank Development Research Group, November 2000, page 30.
two decades old data.Deleted User wrote: »I was thinking a bit more about this today (dangerous ) and the reality is Europe is still extremely rich relative to many Third world countries. Ignoring the top 0.1% of citizens whose incomes skew all the so called average earnings, most people have much more purchasing power than they did 20 years or so ago.
In the 1960s, only those who had well paying jobs could afford to own and run a car, many just used bikes or buses to go to work. Any decline in spending power will have to be severe for a couple of decades before we get back to a 1960s living standards.
There will be a decline as resources become more scarce and their costs rise putting them out of reach of an ever increasing number of people, two car families dropping the second car for example.
Things may look bleak to some people, but we're far better off than 40 years ago and considerably better off than the average third world person.
Americans, and most Europeans, aren't really that much better off. Here is why
1) Women coming into the workforce, increasing labour supply.
2) Immigration.
3) Outsourcing.
4) Loss of union bargaining power.
Eventually, as the rest of the world becomes consumers, manufacturing will move back to Europe. We could easily have a cachet - a made in Europe - which adds a premium to European made goods, they would have to be of German or Italian quality though.0 -
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Rumours of Europe's (and the rest of the West for that matter) demise are greatly exaggerated. China and India are in the ascendant, yes, but given that they are starting from a very low base of development only 20 or so years ago - and their sheer size - these countries still have a long way to go.
Another thing that is overlooked is that Europe is the most socially advanced region on the planet and has very high quality of life rankings due to its environmental, soicial and economic policies. Europe also generates services, is a hub for research and development and produced niche, high value added products very profitably that will remain in demand on a global level for the forseeable furure.
The PM of Malaysia is being somewhat arrogant, hasty and dismissive in his comments. His own country is not exactly a bed of roses.0 -
**not read all thread**
sick of hearing about India and china being the future, the fact is they are the past. Where the elite become millionaires because they have power over millions of peasants paying them penny's to do work for them. Jeez give me a thousand china men and i could get them making bottle caps i could be a millionaire.
China and India are no different to tsarist Russia, the aristocracy and the serfs...
just think the eu could make a law to allow millions of low paid workers to come to Europe and pay them **** all and this would get the manufacturing sector going again. Same thing done in other places, like Dubai(**** wages and no rights) thankfully Europe is not like that.0 -
swimming in a sea wrote: »**not read all thread**
China and India are no different to tsarist Russia, the aristocracy and the serfs...
just think the eu could make a law to allow millions of low paid workers to come to Europe and pay them **** all and this would get the manufacturing sector going again. Same thing done in other places, like Dubai(**** wages and no rights) thankfully Europe is not like that.
Not quite. They are building a middle class.0 -
"I have lived millennium and if I was to tell you how many times i have heard ours is the ultimate culture, a power the world has never seen, we could not possibly be usurped by any upstarts, we will be forever, but yet all those great empires are dust".
Or i am sure you recognise this one
"My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!"
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away.
Someone composed a list of the most destructive human episodes of all time based on world population, WW2 is 9th on that list, China's claim to fame is they have 4 in the top 20, including number 1. The An Lushan revolt a war that took part in the middle of the 7th century which raged for 30 years of more, with battles involving a million soldiers, we never seen armies that size since xerses sent his armies to Greece and not again till the 19th century. An estimated 35 million people died in that conflict a figure which involves famine deaths caused by the war. If you calculate the proportion of population compared to time WW2 was fought half a billion people died. That was a very sophisticated culture who could field and supply such huge armies, what was Europe doing in the 7th century.
The biggest middle class in the world is now Chinese, a whopping great 300 million, Companies are climbing over themselves to get a slice of that market even high tech businesses such as Boeing and Airbus are building plants there.
Anyone with a tiny business brain knows were the emerging market are and that is the far east. China is now past Japan and it is the worlds second biggest economy. Europe is in trouble and the US is to enfeebled to assist. If anyone could assist, that would be China who also have the biggest foreign reserves in the world of 2 trillion dollars.
They are no longer content with just importing materials they are snatching up mining companies, banks, energy companies, power companies from South Africa to Australia.
They have already a viable internal economy, a healthier one then the wests and still growing. These arguments always seems to go beyond the facts and usually descends into a kind ethnic and cultural racism, they can be just as creative and culturally as creative as the west, they are people.
It is also interesting that the most expensive art at auctions these days is no longer western, but Chinese, they are buying back their culture, a ming vase recently went for 21 million in sotherbies the collection went for 76 million. Each auction breaks the last record and there are still more to come.
The west while not out is certainly in decline, I am more interested, will the Euro last will the EU last, I hope so anyway. , but that is all I can do, hope, it will be on our own backs and not some "we are more creative then them" we are not.0 -
@44leto good post.
The stats you are quoting are form Pinker - the Better Angels of our Nature.
Most people don't get exponentials and don't really get what is happening in China. The globalrichlist is quoting from income distribution in 1988-1993, back when China and India were both way below $1000 a year. Probably $300 a year.
Where is China now. It is at $5000 a year. It is growing at 10% a year. So when was it at $2500 per capita? 2004. When was it at $1250? 1997, or so.
When will it be at $10000 per capita - about Mexicos level? 2019. When at $20000? 2026.
When $40k per capita - 2033.
Long before then it will be the richest actual country in the world.
* all stats are extrapolation, thats China's trend.0 -
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how will china make the next step from seller to buyer, when the west can't buy their stuff will they have the middle class to buy it themselves?0
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@44leto good post.
The stats you are quoting are form Pinker - the Better Angels of our Nature.
Most people don't get exponentials and don't really get what is happening in China. The globalrichlist is quoting from income distribution in 1988-1993, back when China and India were both way below $1000 a year. Probably $300 a year.
Where is China now. It is at $5000 a year. It is growing at 10% a year. So when was it at $2500 per capita? 2004. When was it at $1250? 1997, or so.
When will it be at $10000 per capita - about Mexicos level? 2019. When at $20000? 2026.
When $40k per capita - 2033.
Long before then it will be the richest actual country in the world.
* all stats are extrapolation, thats China's trend.
Its a fantastic read, for an 800 page book and complex it actually reads like a page turner I can't put it down.
And what you post is true and everyone is trying to get on the coat tails of that growth. They are also importing a lot of capital machines from the US Germany and Japan, the machines that tool industry, each of those countries although enjoying the income from those exports know what the long term cost to their economies those exports mean.
Less german Japanese and we are already seeing less American jobs.
I myself think we should look at protectionism again, although it didn't work before, but the surplus of trade in China's favour is becoming to great. I bet the Americans eventually will.0 -
swimming in a sea wrote: »how will china make the next step from seller to buyer, when the west can't buy their stuff will they have the middle class to buy it themselves?
The West is in relative decline, not - in most cases - actual decline.
As for the Chinese Middle class, BMW is now, and Apple is expecting soon, China to be their best market.0 -
The West is in relative decline, not - in most cases - actual decline.
As for the Chinese mildly class, BMW is now, and Apple is expecting soon, China to be their best market.
i don't think your doing percentages here, its only bmw etc best market if its percentage the best. maybe china will pass the usa, but as long as they have half their population living of a bowel of rice they aren't an example to follow.0 -
swimming in a sea wrote: »i don't think your doing percentages here, its only bmw etc best market if its percentage the best. maybe china will pass the usa, but as long as they have half their population living of a bowel of rice they aren't an example to follow.
I can do percentages. It's BMW's top market, more people in China buy BMW's than any other country. This is in answer to the claim that they don't have a consumer/middle class. They do. Its growing.0 -
Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 60,171 Mod ✭✭✭✭Join Date:Posts: 59099
Americans, and most Europeans, aren't really that much better off."I have lived millennium and if I was to tell you how many times i have heard ours is the ultimate culture, a power the world has never seen, we could not possibly be usurped by any upstarts, we will be forever, but yet all those great empires are dust".Or i am sure you recognise this one
"My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!"
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away.Someone composed a list of the most destructive human episodes of all time based on world population, WW2 is 9th on that list, China's claim to fame is they have 4 in the top 20, including number 1. The An Lushan revolt a war that took part in the middle of the 7th century which raged for 30 years of more, with battles involving a million soldiers, we never seen armies that size since xerses sent his armies to Greece and not again till the 19th century. An estimated 35 million people died in that conflict a figure which involves famine deaths caused by the war. If you calculate the proportion of population compared to time WW2 was fought half a billion people died. That was a very sophisticated culture who could field and supply such huge armies, what was Europe doing in the 7th century.The biggest middle class in the world is now Chinese, a whopping great 300 million, Companies are climbing over themselves to get a slice of that market even high tech businesses such as Boeing and Airbus are building plants there.Anyone with a tiny business brain knows were the emerging market are and that is the far east. China is now past Japan and it is the worlds second biggest economy.They have already a viable internal economy, a healthier one then the wests and still growing.These arguments always seems to go beyond the facts and usually descends into a kind ethnic and cultural racism, they can be just as creative and culturally as creative as the west, they are people.It is also interesting that the most expensive art at auctions these days is no longer western, but Chinese, they are buying back their culture, a ming vase recently went for 21 million in sotherbies the collection went for 76 million. Each auction breaks the last record and there are still more to come.The west while not out is certainly in decline, I am more interested, will the Euro last will the EU last, I hope so anyway. , but that is all I can do, hope, it will be on our own backs and not some "we are more creative then them" we are not.@44leto good post.
The stats you are quoting are form Pinker - the Better Angels of our Nature.
Most people don't get exponentials and don't really get what is happening in China. The globalrichlist is quoting from income distribution in 1988-1993, back when China and India were both way below $1000 a year. Probably $300 a year.
Where is China now. It is at $5000 a year. It is growing at 10% a year. So when was it at $2500 per capita? 2004. When was it at $1250? 1997, or so.
When will it be at $10000 per capita - about Mexicos level? 2019. When at $20000? 2026.
When $40k per capita - 2033.
Long before then it will be the richest actual country in the world.
* all stats are extrapolation, thats China's trend.I can do percentages. It's BMW's top market, more people in China buy BMW's than any other country. This is in answer to the claim that they don't have a consumer/middle class. They do. Its growing.Rejoice in the awareness of feeling stupid, for that’s how you end up learning new things. If you’re not aware you’re stupid, you probably are.
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Compared to two generations ago? Yes, they kinda are.
Not much.Links please, because the latest figures I have found are closer to 100 million and the definition of 'middle class' is itself up for debate. Nevertheless, this ignores the billion behind them who are dirt poor peasants barely above the poverty line(and oft below) left out of this economic 'miracle'. Mark me, they will decide the future of the region more than any emerging middle class.
I will come back to the "underclass" below. China has a per capita income of $5000, which is middle class by world standards. Your concern about the poor is correct, China has a gini index of 0.47. However that means a lot of people have little, lets say 500M ( on $1000 or less) the other 500M is approaching $10000 per capita.Now you're having a laugh. It is nowhere near healthier than in the west.
it is, precisely because its growth is in making stuff not moving capital about.For a start it's not a nation, it's an empire. One made up of many different individual cultures beyond the Han of the coasts. That's a friction point.
China is 92% Han. Thats probably more ethic cohesion than any European country.We see this in the Laissez faire attitude to anything approaching copyright, to the degree I wonder does Mandarin possess the pictogram for same. This will affect the west a lot less than it will affect China's internal growth if it is to continue.
The US in the 19th century disregarded copyright to Dickens' distress. Tends to be the case with rapidly developing countries with little to copy right - and the US in the 19th century produced very little of copyrightable value ( Both Moby and Huck can kiss my hairy white Irish ass).Go back in your time machine and visit Sothebys in London in the early naughties. Attend an auction of Irish furniture and silverware. Watch the prices skyrocket. Take the same items to Sothebys today and watch you lose your shirt in the interim. This stuff is a given in any emerging market and doubly so in a bubble.
Not all booms are bubbles. Irelands export fell during the bubble, China is more sustainable, as it is export driven. They are, after all, growing in a European slowdown, if they hit some bubbles ( i.e. real estate) in the next few years, the fact that the rest of the world has to grow sometime will stop them hitting the rocks. Real estate is probably a bubble there, but it is far less significant to their economy than it was here.Where do the vast majority of the goods designs and initial capital you and the world owns originate? It's not China. And where does the lion's share of those resultant profits flow? One figure I saw mooted for an iphone was 20-30 dollars per unit to the Chinese who make it.
That's in one assembly plant ( Foxconn), a figure which ignores the capitalists who own Foxconn and the workers and capitalists who supply the other parts. Apples margins are 40%, the rest goes to their suppliers, R&D ( i.e American workers) gets 2%. They don't pay dividends so shareholders get nothing.
And a lot of that 60% goes to China. Very little goes to Europe or the US (Royalty payments and licensing perhaps). And then there is HTC, Lenovo etc. Chinese companies who keep it all.Indeed but you're forgetting that growth by it's very nature slows. It is not an ever upward curve. That's the thinking that got the EU into the shíte. One cannot extrapolate such figures from the past, not without looking more deeply into what stresses may, nay will impinge on those figures. For a start look at the distribution of those per capita figures. Look at the looming underclass that don't come within an asses roar of those figures and what they may have to say about it.
That "underclass" is not going back to communism. (And underclass is incorrect - they are poor but social problems are not that great). In fact that labour pool is a huge advantage to China. They are there to take up the slack whenever the workers in cities get uppity.Ireland once had the highest uptake of Mercedes per head in the world. The highest proportion of mobile phones and a string of other highests. Remember when Grafton Street rents and real estate prices were higher than 5th avenue? We had the fastest growing and 'healthiest' construction industry in the west too for a time. And now, all too quickly? We have ghost estates. What happened to us in microcosm could very well happen to China. They're building 'ghost' cities as we speak. Oh and we had a growing population. Look up "demographic collapse + China".
Again boom != bubble. Because one country collapsed does not mean the others will ( and since you are arguing that the West is different to China, forgive me for saying that China is different to Ireland).0 -
tl;dr ?
China is closer to 19th century America than Ireland 2000-2006.0 -
Europe has little in the way of natural resources & is for the most part a continent of consumers on a slippery downhill slope all of the richer European countries have lost their colonies on which their wealth came from... & sooner or later we (& the other "poorer" Countries of the EC) better realize who are new colonies being buggered & stripped of wealth to maintain their position in the upper league!!0
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Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 60,171 Mod ✭✭✭✭Join Date:Posts: 59099
I will come back to the "underclass" below. China has a per capita income of $5000, which is middle class by world standards. Your concern about the poor is correct, China has a gini index of 0.47. However that means a lot of people have little, lets say 500M ( on $1000 or less) the other 500M is approaching $10000 per capita.it is, precisely because its growth is in making stuff not moving capital about.China is 92% Han. Thats probably more ethic cohesion than any European country.The US in the 19th century disregarded copyright to Dickens' distress.Tends to be the case with rapidly developing countries with little to copy right - and the US in the 19th century produced very little of copyrightable value ( Both Moby and Huck can kiss my hairy white Irish ass).Not all booms are bubbles.Irelands export fell during the bubble, China is more sustainable, as it is export driven. They are, after all, growing in a European slowdown, if they hit some bubbles ( i.e. real estate) in the next few years, the fact that the rest of the world has to grow sometime will stop them hitting the rocks.That "underclass" is not going back to communism. (And underclass is incorrect - they are poor but social problems are not that great). In fact that labour pool is a huge advantage to China. They are there to take up the slack whenever the workers in cities get uppity.
Then we have the corruption at high levels issue. One with a very long history. Watch that bite them in the bum. Then we have their neighbours. China is not rising in a vacuum. Others in that region are also rising and arguably from a much stronger base, both politically and culturally. They'll be only too quick to compete with China.
Then we have the Chinese demographics problem that will get worse rather than better. A problem that seems quite under the radar of many.
According to their own latest census of 2010, their population is aging and aging fast and fertility is one of the lowest in the world. The UN has even questioned those figures and reckons on books are being cooked. The problem is likely worse.
Up to now, their demographic economic base has reached it's peak and now it's waning. And fast. In 2009 ages 19 - 25 were at an all time peak of 100million, by 2019 on official figures this will have halved. Yep halved. This will affect their industrial labour base as the decline hits new entrants into the workforce. The very same workforce that fueled this 'miracle'.
One of the biggest drivers of the Chinese tiger economy has been it's demographics. It was a stroke of good fortune that China had a growing young and cheap workforce just as it's economy started to grow. This is changing and changing fast. When labour, never mind skilled labour becomes rarer, it becomes a commodity and that commodity costs. Look at what happened to Europe after the plague years. The cheap peasant labour force declined and caused upheaval across the social and cultural landscape. Nations/economies ignore significant demographic shifts at their peril.
[aside]I would argue that one of the rarely mentioned significant factors in the Irish bubble was demographic in nature. We had a "baby boom" between the late 60's and mid 70's. That population needed an enlarged infrastructure, services and housing by the late 90's. So we built them and they came and kept coming until the numbers ran out. It was obvious to me at least. I even mentioned it here about four years ago(to slight derision). Watch us have another building boom/rise in house prices in 20 years time as their 2.5 kids come to maturity. [/aside]
This change will also affect the number of Chinese graduates. This has already started to happen. In 2008 the number of students enrolling dropped by 400,000, by 2010 it had dropped by nearly a million.
Then look at the younger generation of Chinese. The workers of 20 years hence. Their primary school entrance figures dropped by over a third between the late 90's and mid naughties. In 1990 China had over three quarters of a million primary schools, by 2009 that had shrunk to 300,000. These are serious drops that show a serious trend coming, indeed happening as we speak. Your idea that the hinterlands will supply more workers in the event the rich cities inhabitants get uppity is quite simply wrong. The numbers don't add up. You can build factories and they will come and they did, but the day is looming when they may have "ghost" factories the way we had ghost estates.
Then we have the gender ratio shift which is also increasing. From 110 boys to girls in 2008 to 119 in 2010(20 million plus Chinese men will be in trouble looking for wives and families, which will hit the population in other ways).
Never mind the other end of life where the elderly demographic is rising equally rapidly. Who will pay for them? These are pretty big shocks to the system coming down the line. NO economy in history has survived such a demographic change without problems, including serious ones.
You mention America in the 19th century and compare it to China today. Loosely of course I understand you're using it as a loose comparison. Look at the demographics of the US back then. They had a quickly growing population. Growing populations feed economies. When they decline or shift those economies become shaky. You can damn near plot it on a graph. On this demographics front India is in a far better position and IMHO that's more likely to see a new 'tiger' economy.
Actually Ireland could be well placed in Europe on this score. We've one of the highest fertility rates in the EU(if not the highest). If we educate that population growth and foster it well we could be onto a winner in the next couple of decades. Big if mind you considering the narrow mindedness and sheer bloody idiocy of too many of our political class. I'm not holding my breath anyway.
And this is but one of the reasons that I'm of the opinion that China while becoming a player in the world, will not become anything like the player it's recent history suggests or that some/many seem to be cock sure of. IMHO historically many westerners fall into two camps on the Orient. The "ohmigodtheyresoadvancedandsublimeandourbetters" or "itstheyellowperil". I saw it with the rise of the Japanese economy. Same shít different nation. The truth and future lays somewhere in the middle.Rejoice in the awareness of feeling stupid, for that’s how you end up learning new things. If you’re not aware you’re stupid, you probably are.
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