Economic slide in China???

Why shouldn’t there be?

There is no consumerism.

There’s your answer.

Now there’s a slide and only recently, they are admitting it? What happened to how business was booming, there were so many orders and that they needed to hire MORE workers???

This bunch are past masters of cooking the books. I know how they twist prices and do what they want to get the price that they require; I’ve seen it firsthand.

Without consumerism, you don’t have anything. It’s the driving force of the entire economy.

7 thoughts on “Economic slide in China???”

  1. Here’s the thing they never mention when talking about this. Most of China’s economy is now derived from the fact these were American jobs from American companies. Which means that at one time the person who had the job was a taxpaying American worker who could afford to buy goods, but once they lost their job, that went out the window. While some of these workers ended up with better jobs, in reality most did not. Instead they either ended up unemployed or underemployed. It doesn’t take an economics whiz to figure unemployment/underemployment=no buying.

    I am no economics whiz myself, in fact I pretty much slept through economics in college, but one thing I remember is the whole supply and demand. This applies because if there is no demand for something the supply suffers.

    One other important thing and that is to remember China is a communist country. Not just a communist but a dictatorship and there is no freedom there. Many of these people work at slave wages. Also, they aren’t our friends and while they may pretend to be, they would destroy us in a heartbeat if they could. Yet for some reason we sent them jobs knowing all of this, why? I think it will bite us all in the butt.

  2. And consider it’s plain ole garden variety items that are now coming from China — and many many goods are sourced from there — just about every chemical you can name, heparin — yes, that too; it is derived from swine gut (did you know that) — vitamins, fish oil, and other raw goods pretty much all come from China.

    Many pharmacetical items need raw materials sourced from there.

    Yes, it is supply and demand and if there is no consumerism, that’s it.

    Consumerism also includes companies that buy raw materials to synthesize what they need. It’s not just you and I who stroll into a mall or a department store and buy whatever item it is that has its roots in China.

    Again, NWP, the expression YOU WILL GET WHAT YOU PAY FOR comes to mind.

    You compromise the product, you will get a poor product. How many items break or are plumb sol once they’re washed, if it’s made in China? What you purchase in the way of apparel lasts perhaps a season and a half; after that it is kaput. You get what you pay for.

    BUY American, SOURCE American.

  3. It is not so much consumerism as aggreggate demand that should be considered. One of the popular trends of recent years is so-called “lean” manufacturing, which strives to minimize work in process as well as rework and scrap produced. This will reduce the cost of materials for the item.

    If companies are not hiring, chances are that they are buying less as well, deferring what they can and looking for specials on items. We’ve been trainied to look for things “on sale”, but one of the tricks used to hide increased raw materials costs is to reduce the size of the package while keeping the price the same. You’ll see it all the time in grocery stores if you look.

    The worse news may well be the extent to which the low end of the market suffers, as people run out of substitute goods and defer buying things. One way to make an economy look healthy is to have companies build inventory. If they begin to match inputs and outputs, they will have more inventory turns per year, reducing the amount of capital that is tied up in materials or inventory. One way to do this in clothing is to stock fewer sizes, such as small, medium and large rather than sizes zero to 26W by two-size increments.

  4. That is true, I have noticed items I have bought made in China don’t last very long. In fact did you know some products are made poorly for certain companies? for example the computers, electronics, etc made for Wal-Mart are made very cheap. Meanwhile I have original VCRs made in the USA or Japan and they still work but the Chinese made break easily and have replaced many as well as DVDs, CDs and the rest.

  5. Planned obsolescence began to be a significant issue in the 1960s or so. Manufacturers and retailers want us to buy new stuff. They make more money selling crap.

    There is a quote by John Ruskin on the wall of many Baskin-Robbins ice cream stores that reads something like, “There is no good that cannot be made a little worse and sold a little more cheaply, and those who consider price only is that man’s lawful prey.”

    Sellers want to sell their items at a certain price, and they’ll do what they have to do to get it to sell at that price, even if it means making the item a lot worse. People do not help themselves by thinking that an item should cost a certain amount of money because that’s what they paid for it when they bought it a couple of years ago. Arguing for hedonric deflators plays into people’s tendency to anchor something at a price. The computer that cost a thousand dollars five years ago might cost only $500 today, but how often do you buy a computer (or iDevice)?

    Retail sales numbers are not adjusted for inflation (they should be), and the reported number for inflation is a joke. Exclude food and energy costs? Right. Changing the basked of goods that is followed to determine the inflation rate is changed frequently. The cost of housing hasn’t been captured in the inflation rate for over 30 years, so the inflation rate is badly understated. My guess is that it’s closer to 10-12% than what is being reported.

  6. I think the reason for the sagging Chinese economy is far more basic: there’s only so much market across the world for cheap plastic widgets and things that make sense to import from China that they’ve hit the wall. I believe that the Chinese government has been trying to encourage consumerism among its people, but it conflicts with their cultural values and so will take time. It also will be insufficient to satisfy the drive for growth needed to keep their economy humming.

    In any case, the Chinese are not our friends. That they take our investments does not change that.

    Wal-Mart goes to manufacturers and tells them that they want, say, a lawn trimmer they can sell in their stores for $99, when the going price may be, say, $150. The result is a crappy product that falls apart, but can be sold for $99. I’m not sure, though, how much the Chinese are to blame for that.

    Worse, for me, is when a former US manufacturer sells Chinese crap. I learned my craft on Hewlett-Packard test equipment and used to have a wonderful Hewlett-Packard laser printer. But now I won’t take H-P as a gift: the last items that I bought for my business (a laptop and an inkjet printer) fell apart and failed: value-engineered Chinese plastic turds.

  7. HP is horrible (my piece of junk computer is HP)and their customer service is horrible and hard to understand. I hate them and they were the first company I found out was outsourcing.

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