It appears that China is an emerging global power (no shit), but I was suprised by all the tidbits over how many love to vacation, and shop in expensive boutiques. I thought that China was communist, meaning everyone makes menial wages, so how could one afford to carry around their Prada bag or whatnot? Anyone have more info/comments on how the chinese social/political landscape is changing?

Curious,
skuz

 

The idea that all Chinese (and more generally, people in Communist countries) make menial wages and have no personal wealth just isn't true. IMO, and at the risk of attracting flames, that notion is largely propaganda perpetuated by the images we saw of the Soviet Union after it collapsed. Just like how not everyone here in the USA is rich beyond belief (this is a popular misconception in many third world countries), not everyone in China is poor.

China's emerging economic power has allowed its citizens to enjoy more personal wealth. China's growing economic and political power has also improved its relationships with other countries, so its citizens can now travel more freely. Attitudes within the country are also slowly becoming more progressive. As with other political/economic systems, Communism also evolves. Folks there (in the big cities like Beijing and Shanghai at least) own nice houses, a growing number own cars, and they go out to night clubs and other countries to party and have fun just like everyone else (and no, these aren't just the government folks).

 

communism doesn't mean everyone makes the same low wage. It means most get almost nothing for their labor, but the privileged minority live like royalty. For instance, less than 1% of the country has internet access (but that's still 94 million people). Half the country are farmers, but agriculture makes up only 14% of GDP. It would probably be fair to say that close to half the country lives in abject poverty by most standards. They claim only 10% are below the "poverty line," but unemployment is "officially" around 20%, so you do the math.

Outside of the cities, I doubt there are many Chinese carrying around genuine prada bags.

They have moved away from the planned economy of Soviet-style communism towards a more market-oriented economy, with decentralized control over agriculture and industry. Things are getting better at a decent clip, but that isn't hard at first when you have such a large hill to climb. Due to the nature of the politics and economy, they see the worst parts of communism and capitalism, with huge bureaucracy, minimal output, and growing unemployment and income disparity. China is certainly not an economic steamroller on a downhill run - they have huge problems that will just grow larger with uncontrolled growth. It would be easy to just build the crap out of the populated areas and ignore the rest of the nation, but they need to bring infrastructure and technology to the rest of the country, and find a way to employ a billion plus people in useful and productive ways. Glad it's not my job

 

I never researched it personally but IIRC during my last macroeconomics subject (uni) we were told that by fixing its exchange rate (to keep it low and increase exports) they are endangering their future economic status and forcing labour prices down. Their aim is to carry on budget surpluses but their gdp is ballooning and pushing down the labour rates and they also need to address the issue of sustainability.

I found it incredibly interesting that they are the only major country that still operates a fixed exchange and it will be a great opportunity for us to learn its long term effects.

Any comment on this?

 

has anyone here actually been to china and traveled extensively throughout?

you go west for an hour outside of ANY major cities, and you'll see where and how 800 MILLION people lives.

china is great if you have SOME money. in fact, you can have a driver, a nanny for your kids, cook, and a house cleaner for less than $500 a month.

growing income disparity: yes, but only if you compare major cities vs. western provinces. how about the income disparity between Orange County residents and south central LA residents? the percentage gap is just as large if not more when adjusted for cost of living.

unemployment: there is a HUGE shortage (in the millions) of labor in the industrialized regions, a HUGE shortage of skilled labor, a HUGE shortage of skilled staff, and a HUGE shortage of skilled managers. in fact, over 65% of all Shanghai foreign expats (around 70,000 people) are senior executives! unemployment happens to those who don't want to work. also, that number includes the many hundreds of thousands of farmers who have leased out their land and collecting a fat paycheck from the factories that were built on their land. go to places like Dongguan, Zhongshang, and Pangyu and you will see these perfectly health ex-farmers in their 40s and 50s sipping morning tea in 5-star hotel restaurants.

infrastructure: when you're walking on top of the Great Wall (which is BTW in the middle of nowhere), you have FULL cellular signal - i have dead spots in LA and Orange County. if that's not infrastructure & technology, i don't know what is. also, i don't know where the 94m with internet access is from, but on my previous research for a VC presentation showed much more than that.

bureaucracy: it's amazing how fast government runs if you know the right people

i think some people are underestimating China, and that's a dangerous thing to do. China is a communist country by name only, but then if you've never lived or worked there for a prolonged period of time you would get caught up in western media's view as well.

 

China hasn't really been communist for a couple of decades, and in the past decade their domestic market has probably been freer than the U.S. Visit some time - things may be inexpensive there, but the standard of living in the cities is not bad at all.

Regarding the fixed versus floating exchange rate: China's government is slow to adopt reforms - and that has paid off in keeping their modernization going, unlike say Russia where things changed too fast and the changes didn't stick. I think once they get enough educated economists they'll float the Yuan; it really wouldn't hurt them. Remember that the U.S. didn't fully adopt floating exchange rates until around 1970 or so.

 

China is definitely where I want to go when I retire.

I've been there many times and will probably go again soon. The food is cheap and the exchange rate only helps that. They are also pretty modern and the malls are much much bigger then ones we normally see in the states. As I see it, it as pretty much as modern as the states (Not talking about the poor small provinces) and seem up to date with different ways of doing things. (Outside airport style horizontal escalators baby in Wuhan) And um... Tons of azn chicks XD

Their cell phone service... Like most countries... Outdo US cell phone companies.

 

^our system of capitalism is sometimes prevent technology from going further than it should..


interest group lobbying the gov to prevent them from losing business..


etc... broadband.. them corp provide crappy service in certain region that the locals want a gov provided broadband but was shut down by hungry companies..


and our technology in electronics is far behind in other parts of the world... its sad..

america is losing it's advances to its own regulations...

pretty soon we'll be a slow poor country.. one of these day.

and china will be using teleportation ala star trek while we launch shuttles ^_^