The Population of China is 43 Million...Seven Chinese = One American

[rogerluli]

 

 

http://www.mei-zhong.com/2008/09/what-is-t...illion/#more-67

[rogerluli]

There is perhaps no more stark difference between us than this...

 

AMERICANS SPEND...

 

CHINESE SAVE...

 

When China reaches our level of consumption...

 

 

The party is over...

[Guest Mike and Lily]

There is perhaps no more stark difference between us than this...

 

AMERICANS SPEND...

 

CHINESE SAVE...

 

When China reaches our level of consumption...

 

 

The party is over...

 

It will be over in several different ways.

 

1. China will have less cash available to buy our rapidly expanding government debt.

2. China will buy more commodities and the price of commodities will rise due to increased demand.

3. The population of China consuming on par with the USA would be an environmental nightmare.

 

There is an upside though.

 

China might buy more products made in the USA.

Edited September 19, 2008 by Mike and Lily (see edit history)

[Yuanyang]

But didn't we say the same about Japan 20 years ago? Japanese are very much on the consumer band wagon; and they continue to struggle with the Past and Present as it pertains to culture, family and savings.

[Yuanyang]

oh yeah... (my mind can't hold thoughts very well these days.. .) 20 years ago the US was 50% of the world's economy and today it's 25% ( I know this cuz a guy on the radio (NPR) said so )... that's good overall don't you think?

 

 

 

PS I used the emoticons just for Roger

[Guest Mike and Lily]

oh yeah... (my mind can't hold thoughts very well these days.. .) 20 years ago the US was 50% of the world's economy and today it's 25% ( I know this cuz a guy on the radio (NPR) said so )... that's good overall don't you think?

 

 

 

PS I used the emoticons just for Roger

 

And there's one other minor detail. The population of Japan is 125M. China has 10 X as many people at 1.3B

[Yuanyang]

oh yeah... (my mind can't hold thoughts very well these days.. .) 20 years ago the US was 50% of the world's economy and today it's 25% ( I know this cuz a guy on the radio (NPR) said so )... that's good overall don't you think?

 

 

 

PS I used the emoticons just for Roger

 

And there's one other minor detail. The population of Japan is 125M. China has 10 X as many people at 1.3B

10 X the people means the challenge is 1,000 X greater IMHO.

 

But look how much of the world's economy is Japanese! The clock is ticking ...

[rogerluli]

oh yeah... (my mind can't hold thoughts very well these days.. .) 20 years ago the US was 50% of the world's economy and today it's 25% ( I know this cuz a guy on the radio (NPR) said so )... that's good overall don't you think?

 

 

 

PS I used the emoticons just for Roger

 

And there's one other minor detail. The population of Japan is 125M. China has 10 X as many people at 1.3B

10 X the people means the challenge is 1,000 X greater IMHO.

 

But look how much of the world's economy is Japanese! The clock is ticking ...

 

Yeah Bob the US is toast...We knew that...

[tonado]

Can't save because we live by paycheck to paycheck.

[Wendy W]

oh yeah... (my mind can't hold thoughts very well these days.. .) 20 years ago the US was 50% of the world's economy and today it's 25% ( I know this cuz a guy on the radio (NPR) said so )... that's good overall don't you think?

 

 

 

PS I used the emoticons just for Roger

 

 

[2mike&jin]

What a great article - and the link to the original -- although slightly different was an eye opener on a different perspective.

 

 

(WARNING- LONG RAMBLINGS AHEAD- NOT SUITABLE FOR QUICK READS - NOT ALWAYS STICKING TO POINT-WARNING)

 

As I read the article I couldn't help reflect on my last several weeks in China as I struggle with my/our upcoming interview and what my/our alternatives might be. Lucky I live in China. Lot's of good advice on CFL (Hong Kong, Marriage and resubmittal in CHina, sit and wait, etc) and of course mixed with my "good old american" point of view -- WE HAVE TO GET A NEW CAR IF WE DON"T GET PINK!!!!

 

 

We drive a TEANA -- I drive every day to school (minus holidays) and my feelings are I need a HUMMER. No problem, they are for sale right here in Xiamen 1.2M RMB (~ $190K)- Gotta love that tax.

 

SO the SUV made in China, to Japanese Specs - Toyota Prado Land Crusier seems more appropriate. Need big engine - front BUSH Beater (or Chinese intimidator), real spare tire with extra Chrome bars and a Trailer hitch (for those who want to park close) that I will never use for a trailer. OH - Don't forget the Electronic Pushbuttom - raise the car up 6 inches so I can park on the Curbs...OK you get the picture --- put steel all around - prepare for bad roads, parking on the sidwalks, village roads, and touring China - cause if I don't have pink -- I'll be here for awhile....

 

NOW TO THE POINT. (almost)

 

I have been in 6 or seven Car Dealers in the last 2-3 weeks - all hours of day and week --- all were very very busy. In two of them -- I had to wait to talk to someone -- so many people buying cars the dealers can't service the demand. Oh sir, you want a black one with a 4.0 engine...we don't have any left....we can order it...should be here in 2 months. That will be 650,000 RMB + extras - about an even $100,000 USD when you put in the 3% to the government and mandatory insurance. Well this is fun....paying twice as much for a car in China than in the US.

 

Ok, what's wrong - the car is made in China, the factory is less than a days drive from here - why is it so expensive - OH it has a 4.0 Liter engine -- Gov't 35% tax on vehicle - engine too big. Maybe that smaller engine looks much better - OH, the 2.7 liter is made in Japan - and it has an import tax - but you still get to save 200,000 RMB - OK I'm not in the mountains that often I can live with a smaller engine - and I'm saving gas. WHAT DO MEAN the small engine land cruiser has -- no leather, no electronic raise the vehicle for rocks, curbs, and small moto che's (motor scooters) that you have run over, no DVD, No Sunroof,.....OH so to get all the extras YOU MUST BUY THE big engine..made in China...with a different and larger tax, and you also get all the extras that we Americans and Chinese cannot live without!

 

OK, back to the POINT

 

The article points out that "consumption is low in China" equalling a country of about 43 million. From what I see in the big coastel cities, and a few of the not so close to the coast is they are spending like there is no tomorrow. The issue is, and will be that the disparity in the have's and have not's is huge here in China - and from my very short time visiting and living in China (4 years) will never close. However, I think closing the income gap is not the real issue. Who cares if there are more new "millionaire's made in china" each year than anywhere else in the world. Those people spend, consume and live like "crazy americans" or other consumption based countries. The core issue is that so many people in China have such a basic subsistance that it is too low for them to be consumers! They live on farms and villiages, or have menial jobs that pay very little money. This money at best covers food and the occasionaly real need, going to the doctor, transportation, or clothes. There is little money for anything else, including electricity or anything needing electricity. Most of the people living in the cities are not rich - but have low-paying jobs that allow them to just get by. They're only luxury is a inexpensive China mobile telephone that they call call friends and family - and maybe where they live - in a dormitory or a "shared house" a TV. That's it. They can't really consume yet -- and I see no real progress in raising these masses of people up to become a "consumer society".

 

The article said if China in ten years had a $6000 per capita spending it would be just like America - The China "haves" cannot spend enough to raise this level that much because there are too many have nots! This is tantamount to the problem in America -- one cannot raise taxes on the top 2-5% of the incomes and fix all of the nations money problems.

 

In America we at least have the "potentiality" of being able to fix some of our problems, but I see no evidence of China being able to significantly raise the level of consumption or income for the masses. There is just no vehicle to "make it happen". Just like what happens in the rest of the world the viscous cyle of -- prices on everything goes up - then wages lag and finally go up, just to be confronted with price hikes. The people - all over the world see this as being worse off than they were before the wage increases. This cycle does not increase consumption - Confidence, as the article states - increases consumption.

 

A good article - different point of view and yardstick to measure a most difficult area of globalization.

 

Have a great weekend!!!

[rogerluli]

We have our very own Cars in China thread Mike...

 

http://candleforlove.com/forums/index.php?showtopic=32099

 

where you may talk cars amd actually stay on topic...

 

The other part of the low consumption factor for Chinese is simply that they...

 

SAVE TOO MUCH... as our own Treasury Sec informed them...

 

Yes the really rich are out blowing it just like Americans but the great mass of middle class Chinese are socking it away for a rainy day because in most cases they do not have any safety net... If they wind up in the hospital they need to pay upfront for their expected treatment...which incidentally is also becoming more commonplace right here in the US if you don't have the right kind of insurance...

[Guest Mike and Lily]

What a great article - and the link to the original -- although slightly different was an eye opener on a different perspective.

 

 

(WARNING- LONG RAMBLINGS AHEAD- NOT SUITABLE FOR QUICK READS - NOT ALWAYS STICKING TO POINT-WARNING)

 

As I read the article I couldn't help reflect on my last several weeks in China as I struggle with my/our upcoming interview and what my/our alternatives might be. Lucky I live in China. Lot's of good advice on CFL (Hong Kong, Marriage and resubmittal in CHina, sit and wait, etc) and of course mixed with my "good old american" point of view -- WE HAVE TO GET A NEW CAR IF WE DON"T GET PINK!!!!

 

 

We drive a TEANA -- I drive every day to school (minus holidays) and my feelings are I need a HUMMER. No problem, they are for sale right here in Xiamen 1.2M RMB (~ $190K)- Gotta love that tax.

 

SO the SUV made in China, to Japanese Specs - Toyota Prado Land Crusier seems more appropriate. Need big engine - front BUSH Beater (or Chinese intimidator), real spare tire with extra Chrome bars and a Trailer hitch (for those who want to park close) that I will never use for a trailer. OH - Don't forget the Electronic Pushbuttom - raise the car up 6 inches so I can park on the Curbs...OK you get the picture --- put steel all around - prepare for bad roads, parking on the sidwalks, village roads, and touring China - cause if I don't have pink -- I'll be here for awhile....

 

NOW TO THE POINT. (almost)

 

I have been in 6 or seven Car Dealers in the last 2-3 weeks - all hours of day and week --- all were very very busy. In two of them -- I had to wait to talk to someone -- so many people buying cars the dealers can't service the demand. Oh sir, you want a black one with a 4.0 engine...we don't have any left....we can order it...should be here in 2 months. That will be 650,000 RMB + extras - about an even $100,000 USD when you put in the 3% to the government and mandatory insurance. Well this is fun....paying twice as much for a car in China than in the US.

 

Ok, what's wrong - the car is made in China, the factory is less than a days drive from here - why is it so expensive - OH it has a 4.0 Liter engine -- Gov't 35% tax on vehicle - engine too big. Maybe that smaller engine looks much better - OH, the 2.7 liter is made in Japan - and it has an import tax - but you still get to save 200,000 RMB - OK I'm not in the mountains that often I can live with a smaller engine - and I'm saving gas. WHAT DO MEAN the small engine land cruiser has -- no leather, no electronic raise the vehicle for rocks, curbs, and small moto che's (motor scooters) that you have run over, no DVD, No Sunroof,.....OH so to get all the extras YOU MUST BUY THE big engine..made in China...with a different and larger tax, and you also get all the extras that we Americans and Chinese cannot live without!

 

OK, back to the POINT

 

The article points out that "consumption is low in China" equalling a country of about 43 million. From what I see in the big coastel cities, and a few of the not so close to the coast is they are spending like there is no tomorrow. The issue is, and will be that the disparity in the have's and have not's is huge here in China - and from my very short time visiting and living in China (4 years) will never close. However, I think closing the income gap is not the real issue. Who cares if there are more new "millionaire's made in china" each year than anywhere else in the world. Those people spend, consume and live like "crazy americans" or other consumption based countries. The core issue is that so many people in China have such a basic subsistance that it is too low for them to be consumers! They live on farms and villiages, or have menial jobs that pay very little money. This money at best covers food and the occasionaly real need, going to the doctor, transportation, or clothes. There is little money for anything else, including electricity or anything needing electricity. Most of the people living in the cities are not rich - but have low-paying jobs that allow them to just get by. They're only luxury is a inexpensive China mobile telephone that they call call friends and family - and maybe where they live - in a dormitory or a "shared house" a TV. That's it. They can't really consume yet -- and I see no real progress in raising these masses of people up to become a "consumer society".

 

The article said if China in ten years had a $6000 per capita spending it would be just like America - The China "haves" cannot spend enough to raise this level that much because there are too many have nots! This is tantamount to the problem in America -- one cannot raise taxes on the top 2-5% of the incomes and fix all of the nations money problems.

 

In America we at least have the "potentiality" of being able to fix some of our problems, but I see no evidence of China being able to significantly raise the level of consumption or income for the masses. There is just no vehicle to "make it happen". Just like what happens in the rest of the world the viscous cyle of -- prices on everything goes up - then wages lag and finally go up, just to be confronted with price hikes. The people - all over the world see this as being worse off than they were before the wage increases. This cycle does not increase consumption - Confidence, as the article states - increases consumption.

 

A good article - different point of view and yardstick to measure a most difficult area of globalization.

 

Have a great weekend!!!

 

I like your optimism. I wouldn't go as far as to say we have potential to fix our problems. I think our problems are decidedly worse and getting worse constantly. China will continue to have a large rich-poor gap for years to come. But even the poor are decidely better off than they were 20-30 years ago. The status of the rich just improve at a quicker pace. The net consumption of China has increased every year and will continue to increase dreamatically. That is the point that affects us in the ways I previously described.