天下縱橫
隨筆而已。不必當真。
正文
Topic: Unemployment - Why unemployment will have different effects in China and US
The pundits in WXC have always argue that US's recession/depression will create huge problems for China. Sure, in this interlinked global economy, China can not escape the fate of recession or even depression. But stay in the US without surveying and analyzing the actual environment but saying China is going to suffer more is absurd.
Here is the counter argument:
In the US, the people who lose the jobs have no recourse. Manufacturing or service work are their sole income source. Without jobs, they have no means to pay for the huge personal debts, mortgages, living expenses, tuitions and healthcare.
Contrararilly in China:
Most of labor force who lose jobs are peasant class. Their backgound isnt manufacturing. They have no or little debts, they have a home in other provinces to return to. And most likely, they have been saving for their working time. So once the jobs in Canton or Yantz Delta disappears, many will just go back to return to their farming job.
The other reason the unempoloyment will not result in social unrest is they (peasants) are all believed, being a fact as well, that their losing job is caused by western nations that their government had little to do with it. So the sentiment will not be strong against the society.
The Chinese government's public work projects is annouced in a precision time. How well they will be implemented them is another question. These projects provide a shoothing effects psycologically.
Actually, what people hate government the most is the stock market's decline.What I predicted is that due to this huge liquidity injection, the inflation will again catch up globally, stock market in China will have a huge rally, possiblly exceeding past high.
Other possitive aspect is that the realization of Chinese problem is a peasant class problem. That has always be the problem in Chinese history. The Chinese government fully understand this. The coming commodity bubble that will push the food crisis, will also benefit farmers globally. It in the process will also aleviate the pressure on Chinese peasant class.
I hope in the next five year recession time, Chinese will successfully transform the economic structure from fully exported economy into a hybrid economy with domestic and pan Asian product consumption being a significant part of GDP.
So the conclusion is that:
For those well intended or ill intended predition of China goes into a deep recession, just do not bank on it. GDP slide from 11% to 5% isnt a bad thing for China (it is still a real growth isnt it?). It will stimulate and force the transform of economy structure to some thing we may not be able to conceive. It may not even be some thing we know in the history of mankind.
The pundits in WXC have always argue that US's recession/depression will create huge problems for China. Sure, in this interlinked global economy, China can not escape the fate of recession or even depression. But stay in the US without surveying and analyzing the actual environment but saying China is going to suffer more is absurd.
Here is the counter argument:
In the US, the people who lose the jobs have no recourse. Manufacturing or service work are their sole income source. Without jobs, they have no means to pay for the huge personal debts, mortgages, living expenses, tuitions and healthcare.
Contrararilly in China:
Most of labor force who lose jobs are peasant class. Their backgound isnt manufacturing. They have no or little debts, they have a home in other provinces to return to. And most likely, they have been saving for their working time. So once the jobs in Canton or Yantz Delta disappears, many will just go back to return to their farming job.
The other reason the unempoloyment will not result in social unrest is they (peasants) are all believed, being a fact as well, that their losing job is caused by western nations that their government had little to do with it. So the sentiment will not be strong against the society.
The Chinese government's public work projects is annouced in a precision time. How well they will be implemented them is another question. These projects provide a shoothing effects psycologically.
Actually, what people hate government the most is the stock market's decline.What I predicted is that due to this huge liquidity injection, the inflation will again catch up globally, stock market in China will have a huge rally, possiblly exceeding past high.
Other possitive aspect is that the realization of Chinese problem is a peasant class problem. That has always be the problem in Chinese history. The Chinese government fully understand this. The coming commodity bubble that will push the food crisis, will also benefit farmers globally. It in the process will also aleviate the pressure on Chinese peasant class.
I hope in the next five year recession time, Chinese will successfully transform the economic structure from fully exported economy into a hybrid economy with domestic and pan Asian product consumption being a significant part of GDP.
So the conclusion is that:
For those well intended or ill intended predition of China goes into a deep recession, just do not bank on it. GDP slide from 11% to 5% isnt a bad thing for China (it is still a real growth isnt it?). It will stimulate and force the transform of economy structure to some thing we may not be able to conceive. It may not even be some thing we know in the history of mankind.
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