COMMAND CAPITALISM...

[rogerluli]

A very interesting Newsweek article on "Why China Works". While the rich western economies have fallen on hard times both financially and in their citizens confidence in government there is still no sign of either showing up in China. Although their economy is certainly slowing they seem much better prepared to avoid the train wreck of countries like our own...

 

 

http://www.newsweek.com/id/178810/page/1

[Guest Tony n Terrific]

Interesting story. China has come along way since the iron fisted rule of a planned central economy.

[GZBILL]

A very interesting Newsweek article on "Why China Works". While the rich western economies have fallen on hard times both financially and in their citizens confidence in government there is still no sign of either showing up in China. Although their economy is certainly slowing they seem much better prepared to avoid the train wreck of countries like our own...

 

 

http://www.newsweek.com/id/178810/page/1

 

I've wondered about that.

 

When I go back to the States everybody is in Chicken Little Syndrome -- The sky is falling! But in China most people I know -- even those laid off in the Guangdong manufacturing base -- seem to believe that the government will see them through the hard times and, though not eliminate completely, at least make the impact easier to handle.

 

Is it just a matter of perception? Or is there really some logic behind it?

 

Perhaps China having umpteem zillions of $$ in reserves is a factor?

[rogerluli]

A very interesting Newsweek article on "Why China Works". While the rich western economies have fallen on hard times both financially and in their citizens confidence in government there is still no sign of either showing up in China. Although their economy is certainly slowing they seem much better prepared to avoid the train wreck of countries like our own...

 

 

http://www.newsweek.com/id/178810/page/1

 

I've wondered about that.

 

When I go back to the States everybody is in Chicken Little Syndrome -- The sky is falling! But in China most people I know -- even those laid off in the Guangdong manufacturing base -- seem to believe that the government will see them through the hard times and, though not eliminate completely, at least make the impact easier to handle.

 

Is it just a matter of perception? Or is there really some logic behind it?

 

Perhaps China having umpteem zillions of $$ in reserves is a factor?

 

It might simply be that America has had it too good for too long...Young people growing up now just expect to move into cushy jobs paying 6 figures as a matter of course... So when they end up working nights at the Gas 'N Go they can't believe what has happened to America... Chinese have grown up learning to "eat bitterness" and so have more reasonable expectations... But lately I feel that the younger generation of China's young is growing up more like young people here...I don't think many urban youth in China are expecting to "eat bitterness"... and so if there is "social unrest" I think it will come because of the unmet expectations of a new generation that expects success and a higher standard of living...

 

All IMHO ... B)

[georgeandli]

Six figures with no clear idea of what they will "do" after college. Better or the same kind of house the folks had. Parents around the world want their kids to have it better then they did. Giving them the opportunity doesn't make it happen. I'm optimistic, but realism says we all must be cautious now.

[david_dawei]

China believes in having a great mass of balast... even if perception or logic or emotion.

 

Ancient chinese proverb: “Extreme joy leads to misery”.( 乐极生悲, le ji sheng bei).

 

When they looked across the ocean and heard years of extreme joy eminate from the west.. something tells me they knew what was coming in the future at some point...

Edited January 16, 2009 by DavidZixuan (see edit history)

[Stepbrow]

I don't think things are so rosy in the Forbidden Kingdom. When I was in GZ recently, I was amazed at the amount of stopped construction projects. Maybe on only one out of ten was there any construction activity going on. Also remember about the CCP doctoring the stats?

[GZBILL]

I don't think things are so rosy in the Forbidden Kingdom. When I was in GZ recently, I was amazed at the amount of stopped construction projects. Maybe on only one out of ten was there any construction activity going on. Also remember about the CCP doctoring the stats?

 

Construction halts are nothing new.

 

In any event, I think the issue is that China is better positioned to weather out the storm for a multitude of reasons.

 

First of all, the economic crisis will probably be less severe and even shorter in China than in the US. Also, China has one hell of a lot of cash in the government coffers -- much more than the US I imagine -- and doesn't need to go into debt for the next 5 generations to stimulate the economy -- unlike the US.

 

Third, while real jobs may be hard to come by in the not-so-distant future in China, the government can create jobs much more easily than Barack Obama can. This is not only because the Chinese political structure itself lends to quickly enacting legislation and doesn't need a year-long dog and pony show like in the US, but also you can create a job paying $125 a month and that is enough for a new graduate to survive on. In the States you'd be hard-pressed to eat on $125 a week. $125 a month would barely cover bus fare.

 

Finally, much of the economic crisis is caused by psychological factors that, in the end, create an endless circle of doom. People believe the economy is bad, they stop spending. Business has less revenue, they lay off staff. People further stop spending. It's a vicious circle. In China, the public perception is such that the government can handle the problem so the psychological negativity is reduced and that economic vicious circle isn't as vicious as it is in the US.

 

My company -- as most other major multinational enterprises -- has decided not to lay off staff during the next 2 years. Neither will government enterprises. I suspect the major blow to employment will be those looking for their first job after graduation and those working for smaller, under-capitalized companies.

 

As for recent college graduates, the government has vastly expanded the post-graduate educational opportunities so that now, instead of, say, 10%, probably half the graduating class can continue to obtain a post-graduate degree and, of course, put off entering the job market. This is something the US could never pull off.

[georgeandli]

GZBILL, I agree with what you say. However, won't sending grads back for more school just push the problem back? Is the mind set that much different? You know more education=better job and more $.

[GZBILL]

GZBILL, I agree with what you say. However, won't sending grads back for more school just push the problem back? Is the mind set that much different? You know more education=better job and more $.

 

I think that is pushing the problem back -- about 3 years. But then they figure that in 3 years the economic crisis will be over, no?

 

The salary difference between a bachelors and a masters degree is minimal. Even a doctorate is no ticket to a high salary.