Europe is poor so should live within its means

Wibbs

44leto wrote: »

What does Eurocentric mean in History when China or Mongolia were the economic superpowers was the world Asian Centric.

They weren't and it wasn't. Or more rarely than is thought by many at the mo.

Now that the USA is the world economic superpower is the world American centre.

Yes to a degree, but as I pointed out America is culturally a European country. IMHO this is makes the difference in the past and will likely continue to do so in the future.

Europe was always fragmented more so then most the world and economic centres went from Turkey Italy Portugal Spain France Holland England.

And that's precisely why it has proven more resilient than other more monolithic and centralised cultures.

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.

Again I really can't see it, or at least not to the degree some seem to think. Why? 1) what is the emerging culture of such places? Overwhelmingly western/european in nature with local colour. Less so for India, but only just. How do the new rich of china dress? What music do they listen to? What media do they subscribe to(when allowed)? An alien landing tomorrow would conclude Western/European culture 'won' and continues to do so. 2) Economics. China is a manufacturing giant. Your phone, pc and sundry electricals and household stuff may be Chinese in manufacture, but what is it's origin, which culture designed it? Western. And where does the lions share of the money you pay for that stuff end up? You guessed it and it ain't Bejing or in the average Mr Li or Miss Wengs pocket. The vast majority of the Han hinterland don't see a Yuan of it, nor can afford the stuff you, we take for granted, never mind the many numbered other cultures and peoples under the red flag. That can't sustain. Politically or economically.

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".

Mike 1972

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 ?

General General

You have to listen to the dogs barking in the street, I suppose... except in much of Asia, of course.

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.

Yahew

Sandwlch wrote: »

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.

JupiterKid

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.

swimming in a sea

**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.

Yahew

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.

44leto

"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.

Yahew

@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.

swimming in a sea

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?

44leto

Yahew wrote: »

@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.

Yahew

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.

swimming in a sea

Yahew wrote: »

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.

Yahew

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.

Wibbs

Yahew wrote: »

Americans, and most Europeans, aren't really that much better off.

Compared to two generations ago? Yes, they kinda are.

44leto wrote: »

"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".

I dunno who said that, but it sounds like a hippie. It's incredibly simplistic a comment and doesn't ask the why's or the how's or the too and fro's, or what springs from such '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.

I do and what he's describing is a centralised, ego driven monolithic empire/culture.

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.

Yep and that happened in the Tang dynasty, the only time when the average Chinese had a higher per capita worth than the average European or near Eastern right up to the present day. Plus let's not forget the exaggeration inherent in such "histories" from that distance in time. Hell the Greeks were at it and they tended to be anal to the point of requiring therapy. The victors write the histories, more like hagiographies. Or maybe we should believe the Irish annals from around the same time that describe Cuchulainn slaying a 100 men from the sparks from his hair? Or the Trojan Horse and the length and numbers involved in the siege of Troy?

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.

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.

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.

Funny you mention Japan. I remember the same thing being said about Japan back in the day. Not such a distant day either. They were once the second largest economy in the world. They're still doing alright, but they're not up anywhere near second. And lest we forget history, Japan had an industrial revolution and large industrial base. A base that China could have only dreamed about a generation ago. Theirs was more a return to some form, rather than a new arising.

They have already a viable internal economy, a healthier one then the wests and still growing.

Now you're having a laugh. It is nowhere near healthier than in the west.

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.

Oh I agree 100%. It's eff all to do with any notion of ethnicity. However I would argue that their culture is deeply engrained and that is a major stumbling block as they try to hold the centre of this growth. They have an incredible cultural heritage in soooo many ways, but set against that is disadvantages of said heritage. 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. It's also and has been since it's very foundation a very centralised, socially structured, monolithic culture, which has shown itself in stagnation way more than in innovation and exploitation of same. That stuff takes more than a generation to begin to excise. We've already seen this in some internal industries and their inevitable race to the bottom, which then killed said industries. 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.

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.

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.

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.

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. And what does Apple sell an iphone for?

Yahew wrote: »

@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.

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.

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.

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".

Yahew

Wibbs wrote: »

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).

Yahew

tl;dr ?

China is closer to 19th century America than Ireland 2000-2006.

megafan

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!!

Wibbs

Yahew wrote: »

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.

They have the largest underclass on the planet and that divide is growing.

it is, precisely because its growth is in making stuff not moving capital about.

While I agree 100% that Europe has to start making more stuff, we already do make quite a bit of stuff already. Plus on the R&D front Europe knocks China into a cocked hat. Europe(and the US) aren't all just working the stock market.

China is 92% Han. Thats probably more ethic cohesion than any European country.

You need to read far more on this ethnic cohesion you speak of.

The US in the 19th century disregarded copyright to Dickens' distress.

No doubt. Canada and the UK pissed off Twain to much the same degree. Important difference to today however.Local publishing copyright had existed to some degree or other since soon after the indroduction of the printing press(and before. See Columbanus getting it in the neck from an Irish king for breaking it "To every cow its calf and to every book its copy"), However internationally agreed publishing copyright is a much more recent invention and set of agreements. Ditto for international patent law. Your example was operating in a very different world, but when that world changed they adhered to the new order. That made them grow even faster. Look at the US gun industry of the 19th century. A better example when it comes to patent protections. There were "gentlemens agreements" between the major names. Compare that to the current and recent Chinese way of doing things. The headlong race to the bottom.

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).

Which with respect again shows some ignorance of these things. The aforementioned firearms industry changed high volume manufacturing for the better. That's just one example of American innovation in the 19th century. There are others. Major innovations in railroads(ironically with cheap Chinese labour), clock and watchmaking, textiles, industrial chemistry etc. They innovated all over the place.

Not all booms are bubbles.

The only real difference is the time frame. Economies seek to make that time frame as long as possible. The faster an economy expands the more likely it will burst from over pressure(internally or externally)

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.

If the rest of the world goes back to growth it's likely it'll be somewhat at their expense.

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.

Are you serious? Watch as that section starts to get very "uppity" in the next few years. It's already started, even with the state's control on the media, word is getting out of protest even riots in the hinterland.

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.

Wibbs

megafan wrote: »

Europe has little in the way of natural resources

Where does this stuff come from? Take Germany. One of the highest deposits of coal in the world. Right up there with Iron and other ores too. Ditto for the Scandinavian countries. Hell we in Ireland have the largest zinc production in Europe and the fifth largest in the world, from just one mine(Tara). No slouches on the lead front either. That's just three nations and we have Russia on our doorstep and their natural resources are off the scale. Seriously I'd love to know where these facts opinions spring from?

Yahew

Wibbs wrote: »

They have the largest underclass on the planet and that divide is growing.

I don't see it as an underclass. Obviously when a middle class is growing it "leaves behind" the people not making it, until they make it. You are, I think, using the term underclass incorrectly. The Western underclass is a permanent non-working class, which is on benefits. The Chinese peasant class is a class which can supply the working class in the future.

While I agree 100% that Europe has to start making more stuff, we already do make quite a bit of stuff already. Plus on the R&D front Europe knocks China into a cocked hat. Europe(and the US) aren't all just working the stock market.

R&D is pointless in terms of job or income growth unless it leads to manufacture.

You need to read far more on this ethnic cohesion you speak of.

Heres a wikipedia link on the ethnic composition of China.


China's ethnic composition is largely homogeneous with 91.9% of the population being Han Chinese, other ethnicities are Mongols, Zhuang, Miao, Hui, Tibetans, Uyghurs and Koreans.[16]

No doubt. Canada and the UK pissed off Twain to much the same degree. Important difference to today however.Local publishing copyright had existed to some degree or other since soon after the indroduction of the printing press(and before. See Columbanus getting it in the neck from an Irish king for breaking it "To every cow its calf and to every book its copy"), However internationally agreed publishing copyright is a much more recent invention and set of agreements. Ditto for international patent law. Your example was operating in a very different world, but when that world changed they adhered to the new order. That made them grow even faster. Look at the US gun industry of the 19th century. A better example when it comes to patent protections. There were "gentlemens agreements" between the major names. Compare that to the current and recent Chinese way of doing things. The headlong race to the bottom.Which with respect again shows some ignorance of these things. The aforementioned firearms industry changed high volume manufacturing for the better. That's just one example of American innovation in the 19th century. There are others. Major innovations in railroads(ironically with cheap Chinese labour), clock and watchmaking, textiles, industrial chemistry etc. They innovated all over the place.

You seem to be claiming, once again, the Chinese can't innovate. I don't agree. When they start innovating more they will adhere more to copy right. The Americans warmed to copyright when it benefited them. The "race to the bottom" is not true, either, China has grown its per capita GDP 10 times in the last few decades.

The only real difference is the time frame. Economies seek to make that time frame as long as possible. The faster an economy expands the more likely it will burst from over pressure(internally or externally) If the rest of the world goes back to growth it's likely it'll be somewhat at their expense.

No it won't, as the rest of the world are the consumers of Chinese products. As we have agreed.

Are you serious? Watch as that section starts to get very "uppity" in the next few years. It's already started, even with the state's control on the media, word is getting out of protest even riots in the hinterland.

Sure people protest, but they are not going back to communism. The 19th century "spectre hanging over Europe" does not hang over China since they are already communist, nominally. The "worst" that can happen ( and the best) is a more democratic revolution, or an anti-corruption drive.

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.

Nobody is saying they are in a vacumn. Just that they have 1.2 billion more people than their nearest competitors.

Then we have the Chinese demographics problem that will get worse rather than better. A problem that seems quite under the radar of many.

It doesn't exist at the moment, where the momentum keeps the population growing, the future drop in Chinese population will make them richer but they still have that peasant class ( your "underclass") to make rich first. Its not an issue.

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.

Not sure why this is even a problem for a country with

1) Massive supply of labour which can be moved to the more productive cities over time.
2) No transfers to the old in terms of old age pensions.

You are applying the European system to China. The problem with demographics where there are too many old people is the dependancy ratio, they don't have one as they don't transfer. At least the State doesn't.

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'.

This will just mean that more peasants will flock to the cities as the cities need to compete with higher wages.

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.

Once again the fact that 500 M people have yet to be brought into the modern capitalist ( or corporatist) economic system escapes you. You see it this surplus a bad, I see it as a labour surplus.

[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]

That's a piece of sense, but unrelated to China.

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.

They need, then to allow more peasants in, or increase the second level availability.

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.

The numbers do add up. There are 500M or so peasants yet to be moved to the cities, thats a generational event. If the Chinese were worried about this they would just remove the one child policy. I expect they will do that in a few years, and just as the rural population is saturated

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).

They might pick up Western girls. There is no much evidence of this imbalance causing any trouble, it is merely theoretical that might.

Never mind the other end of life where the elderly demographic is rising equally rapidly. Who will pay for them?

Their families. Not the State.

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.

Your entire premise is based on labelling a highly mobile and hard working peasant population which can move to the cities as an "underclass" to over-egg the demographic problem which doesn't exist.

Unlike Europe, where the demography does matter. Europe is not just in economic decline but in massive demographic decline too - many places with lower fertility than China - and with massive transfers to people over 65. People who on average now live 20+ years, and trending - for women - towards 25 years. That affects the dependancy ratio, not so much in China.

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.

The China that is growing is the capitalist/corporatist part. Some if it is still communist, and has State farms, or small holdings. You can see the movement of Chinese from rural areas to cities ( and they need visas to do this) as a movement of peasants to factories similar to the movement of Europeans to the US.

Growing populations are not the be-all and end-all of economic growth either, India is growing but so is Nigeria. So is Ethiopia. So is liberia. India has far more problems ( manifest in its per capita being much lower than China now though they started reforms at about the same time). Real ethnic, and sectarian, and caste differences. And over population. When china is rich, India will be poor( er) at 2 billion people.

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.

We could do well, the recent immigration was of smart industrious people too. With smart kids.

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.

The actual "fear" of the Japanese economy began just as Japan tended towards lethargy because it had already grown across 2 generations, thus the fear was "too late". If someone in 1950 had extrapolated Japans growth across 2 generations to be the second richest country in the world, that would be equivalent to seeing the same mechanisms at work in China now.

Yahew

Wibbs wrote: »

Where does this stuff come from? Take Germany. One of the highest deposits of coal in the world. Right up there with Iron and other ores too. Ditto for the Scandinavian countries. Hell we in Ireland have the largest zinc production in Europe and the fifth largest in the world, from just one mine(Tara). No slouches on the lead front either. That's just three nations and we have Russia on our doorstep and their natural resources are off the scale. Seriously I'd love to know where these facts opinions spring from?

So Germany, one country, has one of the highest deposits in the world.

The stats are here. Poland does better than expected. In "Hard Coal" production, one country in Europe - Poland - is in the top ten. Germany isn't.

And in Brown Coal production there are more Europeans, five out of ten, but much more limited reserves. Its fair to say that Europe does not really have dominate reserves. Not much oil. Some gas. Fracking will never get going, judging by reactions on this forum.

Nothingbetter2d

Deleted User wrote: »

I thought that we were turning Japanese, now we need to turn Malaysian!

asia wont be so wealthy anymore now us eu and usa folks cant buy their exports like we used to be able to

blatantrereg

Outsourcing caused the Dark Ages.

Rome outsourced its military. Foreign commanders of Roman armies got frustrated and led the first barabarian invasions into the west. The eventual fall of Rome was catastrophic and the dark ages ensued. Feats of architecture such as the collosseum were picked apart to build shacks. People started living in sh!t (literally) in the shadow of broken aqueducts that had once provided running water and sanitation. This happened across Europe - not just in Rome itself.

The outsourcing of corporations to foreign powers could be seen as analogous to the outsourcing the military before. Corporations have the sort of power that armies once had perhaps.

Sindri

Wibbs wrote: »

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.

Where did you get this from? Genuinely curious. India so far as disappointed expectations.

Nothingbetter2d

Nothingbetter2d wrote: »

asia wont be so wealthy anymore now us eu and usa folks cant buy their exports like we used to be able to

That won't be too much of an issue as those countries are rapidly developing their internal markets and will be able to sustain healthy economies without relying on exports.

They will never be able to afford the luxury of "cradle to grave" social security or an enormous military shield, but they may feel that these expenses are too expensive and are not necessary.

Therefore their tax take will be considerably smaller than most western countries and this means that their (working) citizens can have a higher standard of living with much less money. The unemployed, sick, elderly etc. will be dependant on family & charity for support, just as they are now now.

Stinicker

World War II was primarily fought over this, Germany was expanding its Empire, while Ireland had started in chain a motion of events which saw the British Empire declining to its end. Japan also went Empire building in the pacific and this directly threatened US interests in the region with the Filipino colony.

Britain attacked Germany fearing the homeland would fall into German hands,

Japan attacked the US hoping to defeat them in the Pacific and gambling that the US could not fight on two fronts Europe and the Pacific.

Germany thought they were invincible and went all out to conquer the Russians, their superiority defeated by the Russian winter and the Russians fighting them to the death in a pyrrhic victory which cost 20m+ Russian lives.

The second front for Germany cost them the war and allowed the UK to regroup and the USA to assist them and eventually Germany was crushed on both sides.

The US beat back the Japanese atol to atol in the pacific in a brutal war and won it with their new Nuclear detterant thus ending WWII.

Before the war you had three effective superpower:

British Empire
Japanese Empire
Pax-Germania and Empire

After the war the Americans and USSR emerged, the UK was destroyed and later lost most of its empire, the Japanese lost everything but later recovered economically ditto Germany.

So the question begs, the USA is the worlds only superpower left today with Russia in disarray and China developing. WWII was mainly Japan V USA and Germany V UK/USA/Russia. It will eventually come down to dollar hegemony and within a few decades possibly the next 20 years the USA and China will engage each other directly in war most likely over the last remaining oil supplies in Saudi Arabia which is currently "american" territory as is the EU and quite alot of SEA also.

The USA does not need to invade the ME, the US has on its doorstep the Canadian oil sands (Bitumen) and failing that Venezuelan heavy oil, or they could just cut their consumption down to European levels and be self sufficient.

China OTOH will more likely stay with coal and limit their growth to the available supply, while making hay while the sun shines (using up all the oil it can get).

It's Europe that's screwed as they will be increasingly dependent on Russia for fossil fuel as the ME sells to China for gold and (cheap) manufactured goods & the Americas for food.

Wibbs

I've had a few ales with mates so...

Yahew wrote: »

I don't see it as an underclass. Obviously when a middle class is growing it "leaves behind" the people not making it, until they make it. You are, I think, using the term underclass incorrectly. The Western underclass is a permanent non-working class, which is on benefits. The Chinese peasant class is a class which can supply the working class in the future.

Jeez you really are hellbent on an unassailable position here. You're missing the point entirely. The demographic timebomb is throughout the Chinese population. Indeed the one child per family edict is even more applied in the hinterlands. There will be a significant supply issue across the board. The 'peasant class' simply won't fill this void. There will be half the workers available.

R&D is pointless in terms of job or income growth unless it leads to manufacture.

You cannot be serious. You better tell that to the Chinese as they based their economic miracle on the R&D of others. So long as one can control the manufacture R&D is with grows business. And if you can't and others are ripping you off? Then you start trade wars.

Heres a wikipedia link on the ethnic composition of China.


China's ethnic composition is largely homogeneous with 91.9% of the population being Han Chinese, other ethnicities are Mongols, Zhuang, Miao, Hui, Tibetans, Uyghurs and Koreans.[16]

Like I said, do more reading. Han does not equal homogenous.

You seem to be claiming, once again, the Chinese can't innovate.

Nope, do not collect, do not pass go. I never said that. I did say that culturally and historically speaking such innovations are remarkably unexploited.

I don't agree. When they start innovating more they will adhere more to copy right.

They haven't so far in 20 years and yet you reckon this will magically change? Good luck with that.

The Americans warmed to copyright when it benefited them.

Precisely because they saw the benefit as a culture long before it was enshrined in law.

The "race to the bottom" is not true, either, China has grown its per capita GDP 10 times in the last few decades.

YOu do realise that these aren't following one from the other?

No it won't, as the rest of the world are the consumers of Chinese products. As we have agreed.

Point-you-country mile. How do yo imagine the 'rest of the world' will go back to growth?

Sure people protest, but they are not going back to communism.

Who said they would?

The 19th century "spectre hanging over Europe" does not hang over China since they are already communist, nominally. The "worst" that can happen ( and the best) is a more democratic revolution, or an anti-corruption drive.

OK then read and absorb how that tends to go down historically.

Nobody is saying they are in a vacumn. Just that they have 1.2 billion more people than their nearest competitors.

India will have a larger population, in actual growth by 2020.

It doesn't exist at the moment, where the momentum keeps the population growing,

Eh no. Did you even read the figures?

the future drop in Chinese population will make them richer

How's that work then? It has never worked in any economy before.

but they still have that peasant class ( your "underclass") to make rich first. Its not an issue.

Like I have pointed out and you seem to ignore, the 'peasant class' are part and parcel of this demographic shift.

Not sure why this is even a problem for a country with

1) Massive supply of labour which can be moved to the more productive cities over time.

No, no, lest I over emphasise, NO. The 'massive' supply of labour peak has passed. There will be fewer to move. The number of all Chinese 18-25 year olds will halve by 2020. Just so you don't miss this, ALL Chinese people.

You are applying the European system to China. The problem with demographics where there are too many old people is the dependancy ratio, they don't have one as they don't transfer. At least the State doesn't.

The old are the least of the problem. The lack of the young is where trouble lays. Just as it is in Europe. We're just asked to pay more of their upkeep.

This will just mean that more peasants will flock to the cities as the cities need to compete with higher wages.

Again no.... You do realise that the 2010 Chinese census(which was likely cooked, like their currency) applies to all of the citizens of China. There won't be 'more peasants', there will be less.

Once again the fact that 500 M people have yet to be brought into the modern capitalist ( or corporatist) economic system escapes you. You see it this surplus a bad, I see it as a labour surplus.

I give up.

That's a piece of sense, but unrelated to China.

Thanks, but not appreciated first time around . However demographics are very much related to China. Seriously, look up the UN report(I have it in print, sadly not a link), read it and then look at the long view.

They need, then to allow more peasants in, or increase the second level availability.

They did. Indeed had quite the spread of schooling throughout China. One good thing about Mao's regime. It's not a question of letting peasants in, the numbers are simply decreasing. In actuality the biggest school closures were in the rural areas.

The numbers do add up. There are 500M or so peasants yet to be moved to the cities, thats a generational event. If the Chinese were worried about this they would just remove the one child policy. I expect they will do that in a few years, and just as the rural population is saturated

See above, ad nauseum. Oh and let's say they remove that policy? They'll be in population deficit for 20 years plus and will have more mouths clamouring to be fed and listened to in the interim.

They might pick up Western girls. There is no much evidence of this imbalance causing any trouble, it is merely theoretical that might.

From what I gather from Chinese mates, it's somewhat of an issue, but it remains a minor issue alright. Certainly when compared to the bigger picture.

Your entire premise is based on labelling a highly mobile and hard working peasant population which can move to the cities as an "underclass" to over-egg the demographic problem which doesn't exist.

Read the census results.

Unlike Europe, where the demography does matter.

Demographics matter everywhere. Always have and likely always will do.

Growing populations are not the be-all and end-all of economic growth either, India is growing but so is Nigeria. So is Ethiopia. So is liberia. India has far more problems ( manifest in its per capita being much lower than China now though they started reforms at about the same time). Real ethnic, and sectarian, and caste differences. And over population. When china is rich, India will be poor( er) at 2 billion people.

Watch this space...

We could do well, the recent immigration was of smart industrious people too. With smart kids.

like I said I'd not hold my breath there Y. Though even through blundering moronity(should be a word:)) we'll still likely see a boom in 15-20 years time.

The actual "fear" of the Japanese economy began just as Japan tended towards lethargy because it had already grown across 2 generations, thus the fear was "too late". If someone in 1950 had extrapolated Japans growth across 2 generations to be the second richest country in the world, that would be equivalent to seeing the same mechanisms at work in China now.

Look at Japan's post war growth. Track it's demographic shift.

Sindri wrote: »

Where did you get this from? Genuinely curious. India so far as disappointed expectations..

So far yes and god do they have issues, corruption being one of the actual biggies, however currently India is in a remarkably similar position to China 15 years ago on a few levels. As China's population shifts and cheap isn't so cheap anymore, where would you look for a large and growing young workforce that is relatively well educated? In many ways more educated than the average Chinese per head and significantly more fluent in english, the language of the web/biz. India for all it's current issues may IMHO will be a better bet for a time.