Posted on 01/03/2008 10:01:04 AM PST by charles m
“China’s rapid growth isn’t hugely dependent on exports”
Propaganda alert!
China is the second largest exporter in the world having just surpassed the US (Germany is number 1)
I didn’t know the conservative Economist was propaganda. The Economist has always sided with caution and away from exaggeration.
Rather comprehensive “propaganda,” that includes a discussion of all the assumptions being made. Or is everything with which you disagree “propaganda?”
LOL- BS.
I wouldn’t go as far as to call the Economist “conservative,” in the American sense. But it certainly doesn’t “hide the ball,” as the above poster appears to suggest.
ZERO Exports in 2003???
So, they import a kilogram of iron, and make it into a box of nails that weighs about as much, considering the value addition on the part of the Chinese as comparatively low (i.e., slave labour), the box of nails would sell for slightly above the price of the raw materials themselves.
They use the "net exports" tag to hide the real value of exports. Make no mistake, China is very dependent on exports.
Define export? Does it include all services rendered as well? What domestically is growing their economy even in those areas that are internally consumed, foreign investments from firms like Boeing, GM, Cisco, IBM, McDonalds....... China’s economy is like S. Korea, Germany (post war), Japan (post war); an economy that bets on exports to grow industrially. Their domestic consumer does not have the “money” to buy a Lenovo laptop; he does not have the money to buy the products produced there.
If I give you only $100 a month to live on, you’ll spend it on water and food. If I give you another $100 you might try to get a tarp and some wood for a fire. If I give you yet another $100 you might even get a radio and some cloths. Most of China to this day is in poverty parts are even borderline starving. They do not have the means to afford the industrial nor the consumer goods and services produced there. Of their economy, much is involved with essentials that are domestically consumed. ***The industrial/technological component*** of their economy is INDEED driven by exports and only now beginning to become more accessible to their domestic consumer as some of the new financially wealthy Chinese can afford these products, such as Refrigerators (Something not common in MOST Chinese households even 10 years ago).
This is indeed propaganda because it’s a distortion of reality.
And regarding the misuse of the word "propaganda," is the Economist an arm of the Chinese government or otherwise vested in spreading false information about the regime? Words mean things.
I need to read this when I have more time
A decade before they brought over their first American company to manufacture there, they planned on eventually taking away our entire mfg base and eventually, once we were dependent, shutting us off cold.
They’ve been planning to destroy us for over fifty years.
“America doesn’t really count for much in the world anymore - heres why”
I know they have a chip on their collective shoulders what with their once hegemony of the world being reduced by America to a mere shadow of it’s former status, but you would think they could be honest about SOME things. I guess Ideology and desire are too powerful a combination for their wee economist brains.
“America doesn’t really count for much in the world anymore - heres why”
I know they have a chip on their collective shoulders what with their once hegemony of the world being reduced by America to a mere shadow of it’s former status, but you would think they could be honest about SOME things. I guess Ideology and desire are too powerful a combination for their wee economist brains.
That was sarcasm.
Anderson's analysis makes complete sense. Given a massive and poor population, China could arguably double it's economic growth by giving ever peasant a bicycle and an umbrella.
They use the "net exports" tag to hide the real value of exports. Make no mistake, China is very dependent on exports.
You just completely contradict yourself. Where did you study economics?
The example you gave demonstrates why China is NOT dependant on exports. Had they sorced the material domestically, then that would demonstrate a greater dependance on exports. Instead, they get it from Australia.
An old rule of economics-when things start going south, all you hear is good news. Thanks for posting, this may be a landmark piece in a couple of years. After whatever is brewing in the East breaks.
No conflict = no story.
Though unprofessional, that is the norm today.
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The definition of exports varies. Even our definition didn’t include services until some years ago. So major firms that employ tens of thousands of employees and are selling billions in services were not included (EDS, Perot Systems, IBM, HP etc).
Exports are made up of many different things, and the industrial/technological aspect of the Chinese economy is largely driven by exports as well as foreign investments such as GM, VW, Boeing etc.
What share of Lenovo’s market do you think is China, where they are made? http://www.lenovo.com/us/en
No the average Chinese person cannot afford a Lenovo laptop produced there. However, there are over a billion Chinese people and they do buy and sell a lot of things that are produced domestically. Since China doesn't produce a lot of the components that go into that Lenovo laptop, and they only make a relatively small markup on assembling the parts, producing that laptop doesn't contribute as much to their economy as you might think.
China makes money on high volumes with relatively low profit margins. The laptop that is assembled there may sell for $1000, but it doesn't contribute $1000 to their economy. It likely only contributes a small fraction of that $1000 to their economy. Meanwhile they have over a billion people who need things for domestic consumption.
Exports are a very significant part of the Chinese economy. Having to percent of an economy's growth being due to and increase in the net value of their exports is very significant, because the trickle down effects on the economy from that business tend to remain within the domestic economy and grow the domestic economy even more.
However, at the same time, it is a relatively small part of the overall economy, which means that China is less susceptible to economic troubles in the countries they export to than people might think.
It also means that a lot of money that people think we are pumping into China's economy is really being pumped into the economies of the countries that supply them with the components they assemble.
I have little doubt that China is working to change this, and is trying to build their own domestic capacity to build more of those components in China, and that is likely where they plan a lot of their future growth to come from. It doesn't mean we shouldn't worry about China. It just means we should understand where they are and where they are headed.
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