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China's booming middle class is creating world's most dynamic consumer market

economist.com

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Re: China's booming middle class is creating world's most dynamic consumer market

#71
post #59
post #41

Earlier quoted context omitted.

> There's even an outside possibility that China's economic miracle could end up in a fiery crash landing People have been saying this since Deng Xiaoping took over, over 35 years ago. Actually, they've been saying it for over 65 years.

I think these two events in the last 65 years count as "fiery crash landings": https://en.wikipedia.org/wiki/Great_Leap_Forward https://en.wikipedia.org/wiki/Cultural_Revolution Note the latter created an uneducated generation, and as of late we've been learning a lot more people were slaughtered than was generally thought. Moving forward past the Gang of Four, it's hard to see how this experiment won't end in tears:…

The fiery crash landing in China was the pre-PRC era, where China was so weak that it was being carved up by the Europeans, Americans and Japanese.

The Cultural Revolution kicked off an era of double digit GDP growth in China, which persists to today.

I think the Cultural Revolution created one of the most politically educated generations in history. The PRC seems to have survived its graduate schools closing for a few years. Didn't the US and Europe see a dropoff in college and grad school during the early 1940s? They managed to survive that.

Personally I think that empowering young people to smash and burn Buddhist sculptures and paintings, and to eradicate the feudal vestiges of China are what helped it onto its current path of prosperity.

Also, the pathology of focusing on bodies instead of GDP per capita can be found in the US in the Social Security debate. Instead of dividing the GDP by the number of people collecting social security, they count bodies working and retired, as if GDP per capita were not rising. This approach only works where there is no GDP growth. GDP per capita in China doubled in the past eight years, and quadrupled in the past thirteen years.

The feudal thinking was that something like 4-2-1 is a problem. The standing committee of the Politburo of the communist party of China knows that the problem was too little economic growth, and too many children for each peasant family. If they thought your way, they really would be worse off.

Re: China's booming middle class is creating world's most dynamic consumer market

#72
post #71
post #59

Earlier quoted context omitted.

I think these two events in the last 65 years count as "fiery crash landings": https://en.wikipedia.org/wiki/Great_Leap_Forward https://en.wikipedia.org/wiki/Cultural_Revolution Note the latter created an uneducated generation, and as of late we've been learning a lot more people were slaughtered than was generally thought. Moving forward past the Gang of Four, it's hard to see how this experiment won't end in tears:…

The fiery crash landing in China was the pre-PRC era, where China was so weak that it was being carved up by the Europeans, Americans and Japanese. The Cultural Revolution kicked off an era of double digit GDP growth in China, which persists to today. I think the Cultural Revolution created one of the most politically educated generations in history. The PRC seems to have survived its graduate schools closing for a f…

> The Cultural Revolution kicked off an era of double digit GDP growth in China, which persists to today.

That's, I suppose, chronologically possible. That is, the growth kicked off after the Cultural Revolution.

Note well the word "after". The Cultural Revolution ran for 10 years (1966-1976), per Wikipedia, and then later, after that, China kicked off an era of double digit GDP growth, which persisted in China until maybe a year ago. That "later, after that" part is part of what makes me really skeptical of your view that it triggered the GDP growth.

It seems much more reasonable to suppose that the trigger was Deng's reforms.

Re: China's booming middle class is creating world's most dynamic consumer market

#73

Earlier quoted context omitted.

http://www.wsj.com/articles/wsj-survey-chinas-growth-stateme... "More than 96% of respondents to the latest Wall Street Journal survey of 64 economists–not all of whom answered every question–said China’s gross-domestic-product estimates don’t accurately reflect the state of the world’s second-biggest economy. “Official data are manufactured to fit the government’s narrative,” said Stephen Stanley, chief economist at…

Which is exactly what you would expect in a communist regime with a neutered press.

That's what I'd expect from any middling-to-competent regime, not just the commies (though they of course do it too). For example, the Argentines are famous for making up exchange rates, and my own (American) government has a policy of systematically misreporting inflation and unemployment.

Re: China's booming middle class is creating world's most dynamic consumer market

#74
post #70

Earlier quoted context omitted.

I suspect very few commenters here have visited China lately. There is a ton of consumer spending in China. Apple stores everywhere in big cities, way more than London or New York for example. The biggest name luxury brands are all over the place. Cost of living in Shanghai is on par w San Francisco, Beijing is probably higher.

Never visited, didn't even read the The Economist article (didn't want to use up my quota of them) but: There is a ton of consumer spending in China. Apple stores everywhere in big cities, way more than London or New York for example. The biggest name luxury brands are all over the place. Cost of living in Shanghai is on par w San Francisco, Beijing is probably higher. Are any of these signs of middle -class prosperi…

Yes it's something we think of as key. They also have very busy Uniqlos and Ikeas (if you wanted to get nitpicky those might be thought of as a bit upper middle class there, but then you could look to Taobao or all the local brands). And the fact is that those cities are hugely populous and all those shops are doing a roaring trade.

I'd say the diagram in the article looks pretty on the money in terms of rapid growth of middle class. It's not as big as in, say, Germany of course but it's definitely there and looking very healthy. There doesn't appear to be _significantly_ greater poverty in the streets than in NY, LA, or SF. There is clearly disparity as you might expect in a turbulent emerging economy - the levels aren't too obviously dissimilar to much of the US or UK and visibly greater than western Europe and Nordics. Shanghai already makes many major Western cities look like a backwater.

Re: China's booming middle class is creating world's most dynamic consumer market

#75
post #46

I was there on vacation one month ago and I have no trouble believing this article. The number of tourists paying European level entry fees to museums, parks and attractions is just too big (incredibly long lines everywhere, very few people from outside China). By comparison food is about 3 times as cheap as in western Europe and goods are as cheap as one expects from China. Still, and I know this is not the point of…

for months after returning from China I marveled at the empty sidewalks in Arizona where I live. I understand totally what you are saying. China is a fascinating place.

Re: China's booming middle class is creating world's most dynamic consumer market

#76

When I was young I remember the world used to be beholden to the demand of the american consumer. What they wanted drove the export of entire economical regions in Asia. Now it seems the giant in the room that everyone needs to accommodate is the Chinese consumer.

The world has been beholden to US consumer demand since the end of the Bretton Woods system (which ended when Nixon unpegged the dollar from gold in 1973) up until the collapse of the US center of gravity in 2008 (from which we haven't really recovered). Prior to that it was the opposite: Demand came from the periphery, and the US was the world's factory. Where we are now is uncharted waters. US demand is required to…

Is that you ? Is it the former greek finance minister ?
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