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.
A good point. But consider also that in a free and open society with limited government, consumers have more influence. In China it might be the Chinese government that everyone needs to accomodate. Certainly that has been a focus of the movie industry.
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 fuel the Global Surplus Recycling Mechanism. With its absence, China does not have enough domestic demand to replace the US and does not have enough power to start its own GSRM.
The US consumer market today is three to four times larger than the Chinese consumer market. So no, the roles have not switched yet, not even close.
The US economy growing at 2-2.5% is growing nearly as fast as China's economy today (given their non-fake rate of growth is more likely in the low single digits of around 3% to 4%).
Until Aug,2015 about 276 lawyers who help Chinese people protecting their human right have been arrested. But China still claim it is a country under the rule of law.
Another example is that recently an official media of China claim that China is the most democratic country in the world.
Nothing you said contradicts anything written in the article. In fact it's basically a completely different topic. If someone wrote an article about the American economy it wouldn't be contradicted because you can denounce the American government or criminal justice system.
From where do you get the ridiculous claim that human rights and the rule of law are preconditions for economic prosperity? There are many unfree yet rich countries, i.e. Singapore.
This question was answered years ago by the magna carta. Without rule of law, you get corruption and a dissatisfied population. Then you get economic stagnation and suffering by the masses. Finally, you get the French Revolution, the various Communist revolutions, and so on.
Rule of law is necessary for economic prosperity because without rule of law, entrepreneurs cannot confidently engage in economic activity without fearing that their property rights will be trampled and the wealth they generate will be taken away by an arbitrarily deciding government. Why should someone take so much risk and then be punished for their success? Without rule of law, there can be a temporary party for a few decades, but the party stops when the government starts getting out of hand and abuses its power. This is why Xi Jiping is making stamping out corruption one of his top public priorities, more so than any previous Chinese leader in modern history. He is also on record that he wants China to move forward to have proper rule of law.
I dislike it when people bring up Singapore as an example. Singapore is so small that it's really easy to manage compared to a large country with a large population. And besides that, Singapore doesn't have poor quality rule of law compared to other countries (yet).
edit: I get the impression that you equate rule of law with democracy. But you didn't actually say that, so please confirm for me whether or not that's what you really think. Rule of law is something else entirely: https://en.wikipedia.org/wiki/Rule_of_law
This is why Xi Jiping is making stamping out corruption one of his top public priorities, more so than any previous Chinese leader in modern history.
And/or this campaign is destroying rivals to his power....
He is also on record that he wants China to move forward to have proper rule of law.
And if so, we'd better hope he's a 2nd Lee Kuan Yew. Except as you note, the scales don't even vaguely match, trying to effect such a policy change without well neigh unimaginable reforms all the way down to the local level strikes me as equally unimaginable.
One of the reasons to equate the rule of law with "democracy" is checking the power of local potentates; hard to see how a huge, all powerful state like the PRC can do that from the top down.
Yes, definitions and platitudes aside, feasibility is a completely different matter. It would be interesting to see whether the PRC really can implement proper rule of law from the top down, and it is quite possibly not feasible. That doesn't necessarily imply that the desire and effort are false.
Xi Bolai was an example of a campaign to destroy rivals to his power using the claim of wanting to clean up corruption. He had goals to achieve not yet achieved. Xi's already at the top. It would be very difficult to remove him from power, given the way the Chinese government operates. It would be tantamount to revolution. If revolution happens, I can't see it being because power rivals plot it.
Name the long list of countries with low freedom and high economic prosperity - the list is in fact extraordinarily short.
Singapore isn't a low freedom country, it's a mid freedom country. It has a level of freedom comparable to Mexico or Turkey. Low freedom nations: Saudi Arabia, Pakistan, Myanmar, North Korea, Sudan etc.
Off the top of my head for relatively free + prosperous: Norway, Sweden, Finland, Germany, UK, US, Japan, South Korea, France, Denmark, Netherlands, Canada, Australia, New Zealand, Italy, Switzerland, Austria, Iceland, Belgium.
Now match that list with relatively unfree nations that are prosperous. Outside of a select few petro States, you're almost entirely out of luck. That list of prosperous + free states is so far beyond the low freedom list across the board on quality of life and economic metrics, there is no meaningful comparison to be had.
That someone posts something negative about a given country, doesn't mean posting something negative about the US therefore refutes or otherwise alters it.
True, but you can stand up against the US government. Try that in China - anywhere. I live in Macau for 6 years, so I am a bit closer to the situation, and I have been to the mainland several times. One could also argue that there have been more than a dozen 'Edward Snowden's' in China that have been silenced, jailed or killed before they could get the word out. At least, whistle blowing does work in US some times when it counts, however, I believe there were some that were silenced in the US too.
Interesting, when a tragedy occurs in the mainland, scaffold collapse, etc... a number is reported that most people say is half or a quarter of the true body count.
It might be telling the truth but that seems unlikely given that it's repeating the "conversion to consumer society" script that unraveled at the same time that China's stock market unraveled in the very recent past.
Basically, the "rising consumer society" mantra has been going on for a number of years, then various revelations show how false that. Then this just repeats the mantra rather than in any way refuting the revelations.
It's happening all over Asia. First you have Japan, then South Korea, then China and Thailand (where Sony now make their top end cameras), next Vietnam, the Phillipines and Indonesia, with its huge boom in mobile commerce. Bali is no longer so cheap to manufacture and holiday. This is exactly why Myanmar has woken up and wants to become the next place in line for cheap manufacturing.
Thats simply not true. They sold lots of cars to Greece before that country went into crisis. Money is not actually a real measure, and very much can be created on demand. There is also a big difference between money spent by a growing middle class versus money spent by corrupt officials. So you need better data than number of BMWs bought.
You right. For instance, before huge drop in value of Ruble, people rushed to buy all kinds of goods (Big TV's, Apple products, Cars) to capture value of currency. It can be argued that sudden increase in purchases can signal anticipation of economic downturn.
That's the Far East for ya. We gave a Korean company a 30-day evaluation copy of our software in the early '90s. They decided not to purchase, and a few years later we dropped the product entirely.
In 1999 someone from the Korean company called up and asked if we could certify our software to be Y2K compliant.
Oddly, no. We're not a software company, and we don't normally sell our software. It's developed for in-house use. One of the managers thought this particular application would be pretty lucrative if we sold it overseas (our customers are all in the US), so he got permission to do so. But we really didn't know what we were doing, i.e. we had a useful application with thousands of internal customers, but on the business side we were making it all up as we went along.
In the end the product was dropped because there's a lot of effort that goes into making an application a product you can sell to other companies, and we would have had to grow our organization more than the higher-ups wanted to grow it. Things like fancier interfaces, license enforcement, documentation, packaging, 24 hour support, etc.
I read in Yanis Verofakis last book that Chinese consumer demand has been falling off since 2012 or so. I can't find good data on this out there though.
The fact that China's booming middle class is creating world's most dynamics consumer market, is why we need ethics in creating dynamic consumer market.
Anne Stevenson-Yang, a journalist and software executive who's worked and lived in China since 1985, and now a research director at an investment capital firm, has this to say about China's GDP: "actual Chinese GDP is probably a third lower than is officially reported"
"China is sinking into a deflationary recession that’s increasing in speed and may take some time to run its course. Investors have lost faith in the property market, which alone comprises about 20% of GDP, when taking into account the entire supply chain, from iron-ore production to construction to related financial services and appliance sales. Employment and wage compensation will suffer. Consumption will continue to suffer. There’s even an outside possibility that China’s economic miracle could end up in a fiery crash landing, if a surge in banking-system loan defaults outruns government regulators’ attempt to contain such a credit crisis and restore financial confidence."
The particular source here is not the Chinese government but the magazine the Economist and the consulting firm McKinsey. Both are very reputable.
You can go to China or some of the surrounding countries (SE Asia, Japan, Australia) and see for yourself. Or look at the sales reports from Apple. The massively growing Chinese middle class is quite a real thing.
Yet the reaction here is of scepticism, disbelief, denial.
I don't understand that.
No other topic (Europe, US, Africa, Middle-east ...) is met with same.
Yes, but just before the last two big financial crises, Americans were buying houses they couldn't afford, second and third cars, taking loans etc...
I live in Macau, and the Chinese government's recent policy of cracking down on corruption, money laundering and their history of 'massaging' the news, leaves even the Macanese, Hong Kongers and coastal mainlanders suspicious of any economic statistics coming out of the government. Foreign worker quotas here, and the drop in gamblers, VIP especially have resulted in 36% drops from last year. Gambling/Casinos generate 80% of Macau's GDP. I hold out hope for a progressive, free China, but after observing the yellow umbrella movement in Hong Kong, and the mainland's actions and words, I am in despair. The people have been under this type of rule for so long, and the rumors are that the current administration is only going after corruption when done by political rivals, while saving face with their own party.
I truly believe consumerism is going to be humbled by a crash here, and hopefully a restructuring to head up with honest accounting by government if they want to be taken serious in the world currency market.
This company just plays the normal MBA playbook in an echo room and every listens without thinking.
Just look at the former (some now bankrupt) companies that hired McKinsey. Amongst them Enron and Swissair.
The sentiment is mostly anti Chinese Government, not the nation / people.
China's Government has been infamous for lying about economic statistics for decades. Their unemployment rate has hardly changed since the 1980s. For a while - 2001 to 2009 - their real growth was so dramatic it didn't matter much that they were lying about everything. Now that the tide is going out on the world's second largest economy, it matters in a big way.
Consistent to that, I'd encourage people to use "The Chinese Government" rather than the more common "The Chinese" that English media loves to use when generalizing. Missing a single word makes it easy to blur the lines, e.g.:
"The Chinese are corrupt and never tell the truth."
"The Chinese are only good at at stealing and copying things."
"The Chinese cyber-threat ..."
On the other hand, I've noticed in Japan, even with the pervasive anti-China sentiment, news sources are keen to use "Chinese officials" or "China's central government."
"Why the strong anti-China sentiment on HN? I don't get it.
That's quite odd, I notice the opposite. I notice many pro China pieces here on hackernews. Whether it's talking about their green energy, growing economy, financial markets or what have you.
It says that you tend to notice more negative media & chatter about something you care about or have an interest in, regardless of reality.
And I think this might actually be the case here because the original commentor above wasn't "anti-China" at all. He was stating a contrary viewpoint. Being realistic doesn't mean something is automatically "anti". If there was an article about the U.S middle class growing this year, and someone posted a comment which disputed that, it wouldn't be an "Anti-American" comment.
Speaking of, I see more "what's with the anti-China comments?" more than I notice actual anti-China comments. In fact, I almost never see truly anti-China comments.
Being realistic is different from being contrary, which in turn is different from being a conspiracy theorist. Personally, I consider "Chinese government is fabricating economic statistics" a conspiracy theory territory.
You have a point that being mistaken is different from being hostile or anti, but we do call people "anti-vaccine" when they are just mistaken and as a result genuinely worried about vaccine. I think one should interpret "anti-China" the same way.
"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 Amherst Pierpont Securities."
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.
Fabricating statistics wholesale is conspiracy theory. Releasing statistics that are distorted in all sorts of ways because various government organizations have direct incentives to do so is pretty much a statement of fact.
In China, the statistics ARE controlled by one, non-objective party (Party? :-)), so conspiracy theories are somewhat justified.
Even in the much freer US, there are examples of (subtle) information manipulation. Such as releasing numbers that don't fit the government narrative :
- on a Friday afternoon (when all journalists are driving home or drinking at a bar)
It's not conspiracy theory territory, Li Keqiang the country's premier actually admitted that many provinces fabricate statistics to look better to Beijing. And there is tons of evidence that their statistics do not match reality. Realistic is China's economy cannot continue to defy gravity, the regular people aren't experiencing the miracle growth. Maybe the wealthy who have their hands in the pie, but for the other hundreds of millions of Chinese, there is no miracle.
Where it's strictly enforced, it results in what's called 4-2-1, where 4 grandparents are supported by 2 parents (as long as they can) are supported by 1 child. That, the lack of a general social safety net, and the general government policy of financial repression (https://en.wikipedia.org/wiki/Financial_repression) appears to be short circuiting a lot of what I presume The Economist article is talking about, for many people are desperately trying to save for their and their elders' old age instead of spending like "normal" consumers. E.g. one reason for the property and other bubbles, which held out the promise of better investment returns.
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 prosperity?
The general theory here is that you want a huge middle class spending a lot of money. In aggregate, in the US at least in times past, the broadly construed middle class had more wealth than the upper class, spend more, and also provide useful functions WRT to upper class earnings and spending. E.g. how cool are the Apple products that I see for sale in my local Wal-Mart? I.e. to what extent does middle class adaptation of upper class fashions drive changes in the latter?
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.
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.
> 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.
Everybody wants to have a binary outcome for China: China, is it an all dominating inevitability? Or a massive fustercluck? A or B!
And that's silly. China will grow tremendously over the next 30 years, and that growth will be filled with turmoil, booms and busts. Things are only black and white in comic books.
Or it could be like Japan and stagnate over the next 30 years, due to its similarity to Japan in demographics, exporting country's inability to transform to a consumer economy, massive internal debt, capital flight, etc.
China and Japan are about as different and opposite as two places can be (I've spent time in Asia). Their both very unique places in completely opposite ways. The differences are countless and I struggle to find even minor similarities.
This is why China won't upvalue their currency like Japan did in the 80's (at the insistence, once again, of the US essentially forcing Japan to sign the Plaza Accords to stop Japan from becoming a rentier nation). They've learned from Japan's crisis.
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 the article, they are too many to live well, no matter how rich they become. Life there is a sequence of long lines. Three weeks there have reset my baseline for many things. When I came back home (Milan, Italy) I was surprised by how silent and desert it is and by how much sky I could see. Hardly the feelings one usually has when getting here.
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.
75 comments
[ 3.2 ms ] story [ 143 ms ] threadNow it seems the giant in the room that everyone needs to accommodate is the Chinese consumer.
The US economy growing at 2-2.5% is growing nearly as fast as China's economy today (given their non-fake rate of growth is more likely in the low single digits of around 3% to 4%).
Until Aug,2015 about 276 lawyers who help Chinese people protecting their human right have been arrested. But China still claim it is a country under the rule of law.
Another example is that recently an official media of China claim that China is the most democratic country in the world.
CCP is evil, never trust it!!!!!
[0] https://en.wikipedia.org/wiki/50_Cent_Party
Rule of law is necessary for economic prosperity because without rule of law, entrepreneurs cannot confidently engage in economic activity without fearing that their property rights will be trampled and the wealth they generate will be taken away by an arbitrarily deciding government. Why should someone take so much risk and then be punished for their success? Without rule of law, there can be a temporary party for a few decades, but the party stops when the government starts getting out of hand and abuses its power. This is why Xi Jiping is making stamping out corruption one of his top public priorities, more so than any previous Chinese leader in modern history. He is also on record that he wants China to move forward to have proper rule of law.
I dislike it when people bring up Singapore as an example. Singapore is so small that it's really easy to manage compared to a large country with a large population. And besides that, Singapore doesn't have poor quality rule of law compared to other countries (yet).
edit: I get the impression that you equate rule of law with democracy. But you didn't actually say that, so please confirm for me whether or not that's what you really think. Rule of law is something else entirely: https://en.wikipedia.org/wiki/Rule_of_law
And/or this campaign is destroying rivals to his power....
He is also on record that he wants China to move forward to have proper rule of law.
And if so, we'd better hope he's a 2nd Lee Kuan Yew. Except as you note, the scales don't even vaguely match, trying to effect such a policy change without well neigh unimaginable reforms all the way down to the local level strikes me as equally unimaginable.
One of the reasons to equate the rule of law with "democracy" is checking the power of local potentates; hard to see how a huge, all powerful state like the PRC can do that from the top down.
Xi Bolai was an example of a campaign to destroy rivals to his power using the claim of wanting to clean up corruption. He had goals to achieve not yet achieved. Xi's already at the top. It would be very difficult to remove him from power, given the way the Chinese government operates. It would be tantamount to revolution. If revolution happens, I can't see it being because power rivals plot it.
Name the long list of countries with low freedom and high economic prosperity - the list is in fact extraordinarily short.
Singapore isn't a low freedom country, it's a mid freedom country. It has a level of freedom comparable to Mexico or Turkey. Low freedom nations: Saudi Arabia, Pakistan, Myanmar, North Korea, Sudan etc.
Off the top of my head for relatively free + prosperous: Norway, Sweden, Finland, Germany, UK, US, Japan, South Korea, France, Denmark, Netherlands, Canada, Australia, New Zealand, Italy, Switzerland, Austria, Iceland, Belgium.
Now match that list with relatively unfree nations that are prosperous. Outside of a select few petro States, you're almost entirely out of luck. That list of prosperous + free states is so far beyond the low freedom list across the board on quality of life and economic metrics, there is no meaningful comparison to be had.
One could argue that due to the spying and the prosecution of Edward Snowden, that the US gov't is also lost legitimacy.
Basically, the "rising consumer society" mantra has been going on for a number of years, then various revelations show how false that. Then this just repeats the mantra rather than in any way refuting the revelations.
In 1999 someone from the Korean company called up and asked if we could certify our software to be Y2K compliant.
In the end the product was dropped because there's a lot of effort that goes into making an application a product you can sell to other companies, and we would have had to grow our organization more than the higher-ups wanted to grow it. Things like fancier interfaces, license enforcement, documentation, packaging, 24 hour support, etc.
But does the emperor have clothes on? No one can really say for sure.
http://www.barrons.com/articles/anne-stevenson-yang-why-xi-j...
"China is sinking into a deflationary recession that’s increasing in speed and may take some time to run its course. Investors have lost faith in the property market, which alone comprises about 20% of GDP, when taking into account the entire supply chain, from iron-ore production to construction to related financial services and appliance sales. Employment and wage compensation will suffer. Consumption will continue to suffer. There’s even an outside possibility that China’s economic miracle could end up in a fiery crash landing, if a surge in banking-system loan defaults outruns government regulators’ attempt to contain such a credit crisis and restore financial confidence."
She has a good video about China's economy here: https://www.youtube.com/watch?v=C2SStFt-k_A
"Over the last seven weeks alone, $190 billion has left the country."
http://www.businessinsider.com/chinas-record-capital-outflow...
"by 2018 all of China's excess reserves — cash that it has on hand to use immediately — could be gone."
You can go to China or some of the surrounding countries (SE Asia, Japan, Australia) and see for yourself. Or look at the sales reports from Apple. The massively growing Chinese middle class is quite a real thing.
Yet the reaction here is of scepticism, disbelief, denial.
I don't understand that.
No other topic (Europe, US, Africa, Middle-east ...) is met with same.
This company just plays the normal MBA playbook in an echo room and every listens without thinking. Just look at the former (some now bankrupt) companies that hired McKinsey. Amongst them Enron and Swissair.
http://www.ritholtz.com/blog/2011/03/is-mckinsey-co-the-root... http://business.time.com/2013/09/10/mass-layoffs-overpaid-ce...
China's Government has been infamous for lying about economic statistics for decades. Their unemployment rate has hardly changed since the 1980s. For a while - 2001 to 2009 - their real growth was so dramatic it didn't matter much that they were lying about everything. Now that the tide is going out on the world's second largest economy, it matters in a big way.
"The Chinese are corrupt and never tell the truth." "The Chinese are only good at at stealing and copying things." "The Chinese cyber-threat ..."
On the other hand, I've noticed in Japan, even with the pervasive anti-China sentiment, news sources are keen to use "Chinese officials" or "China's central government."
That's quite odd, I notice the opposite. I notice many pro China pieces here on hackernews. Whether it's talking about their green energy, growing economy, financial markets or what have you.
Perhaps you've fallen victim to what's known as hostile media effect? (https://en.wikipedia.org/wiki/Hostile_media_effect)
It says that you tend to notice more negative media & chatter about something you care about or have an interest in, regardless of reality.
And I think this might actually be the case here because the original commentor above wasn't "anti-China" at all. He was stating a contrary viewpoint. Being realistic doesn't mean something is automatically "anti". If there was an article about the U.S middle class growing this year, and someone posted a comment which disputed that, it wouldn't be an "Anti-American" comment.
Speaking of, I see more "what's with the anti-China comments?" more than I notice actual anti-China comments. In fact, I almost never see truly anti-China comments.
You have a point that being mistaken is different from being hostile or anti, but we do call people "anti-vaccine" when they are just mistaken and as a result genuinely worried about vaccine. I think one should interpret "anti-China" the same way.
"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 Amherst Pierpont Securities."
Even in the much freer US, there are examples of (subtle) information manipulation. Such as releasing numbers that don't fit the government narrative :
- on a Friday afternoon (when all journalists are driving home or drinking at a bar)
- on page 95 of a 96-page report
Xi Jinping: "We love peace" ,But his CPC's State TV commenter on parade: "Look at this missile, it can hit Hawaii"
U.S. help China fight against NAZI, but China under control of The Communist Party of China will become another NAZI
People have been saying this since Deng Xiaoping took over, over 35 years ago. Actually, they've been saying it for over 65 years.
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:
https://en.wikipedia.org/wiki/One-child_policy
Where it's strictly enforced, it results in what's called 4-2-1, where 4 grandparents are supported by 2 parents (as long as they can) are supported by 1 child. That, the lack of a general social safety net, and the general government policy of financial repression (https://en.wikipedia.org/wiki/Financial_repression) appears to be short circuiting a lot of what I presume The Economist article is talking about, for many people are desperately trying to save for their and their elders' old age instead of spending like "normal" consumers. E.g. one reason for the property and other bubbles, which held out the promise of better investment returns.
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 prosperity?
The general theory here is that you want a huge middle class spending a lot of money. In aggregate, in the US at least in times past, the broadly construed middle class had more wealth than the upper class, spend more, and also provide useful functions WRT to upper class earnings and spending. E.g. how cool are the Apple products that I see for sale in my local Wal-Mart? I.e. to what extent does middle class adaptation of upper class fashions drive changes in the latter?
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.
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.
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.
And that's silly. China will grow tremendously over the next 30 years, and that growth will be filled with turmoil, booms and busts. Things are only black and white in comic books.
Still, and I know this is not the point of the article, they are too many to live well, no matter how rich they become. Life there is a sequence of long lines. Three weeks there have reset my baseline for many things. When I came back home (Milan, Italy) I was surprised by how silent and desert it is and by how much sky I could see. Hardly the feelings one usually has when getting here.