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.
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.
Foreign Direct Investments. FDI for short. Correct. This is the primary source of their "growth".
China’s economy is like S. Korea, Germany (post war), Japan (post war); an economy that bets on exports to grow industrially.
That is the primary basis for their attraction to the FDI. They set up their factories to ship back to the West...so they can realize the labor and regulatory cost savings.
To the extent they actually induce the FDI sources to shut down indigenous Western production...and weaken their industrial infrastructure with reverse economies of scale...so much the better for the Communist master planners.
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.
Agreed. The "Party" is the basis for a vast amount of the consumption being asserted. They issue the cell phones and computers and apartments...and pay for the schooling, and broad-band connections etc. But none of that is gratis. The Party expects loyalty...and service.