Jump to content
House Price Crash Forum
Sign in to follow this  
AdamoMucci

China slows to 1990 levels

Recommended Posts

https://news.sky.com/story/international-worries-as-chinas-consumption-and-economy-slows-11613323

Quote

Picture China's economy and you might be thinking of massive factories, gigantic airports or train stations built from scratch in 24 hours.

For another view, you could follow Xu Liqiang as he threads the streets of Beijing in a beaten-up tuk-tuk (motorised rickshaw).

Xu is 21 years old and a "kuaidi" (express delivery) driver. Each day 100 million packages are delivered in China and they're delivered by people like him. It's part of a boom in Chinese consumption that has driven growth in global GDP over the last decade.

But today, work is slow. "After Double Eleven [an online shopping festival], the packages have been getting less and less with time," he tells me.

Xu lives in a dormitory provided by his employer with three other kuaidi drivers. He moved to Beijing from Shanxi province in the north.

Migrants used to move to the capital and send money back to their families. Not any more. "Sometimes, I need my family to send me some money, to support my life here," says Xu.

The consumption boom appears to be fading. JD and Alibaba, home-grown internet giants similar to Amazon and eBay, have both reported disappointing sales figures.

But a drop in Chinese consumption isn't just China's problem, it's all of ours. Western companies have pinned their hopes on the 1.4 billion strong market. Recently, though, they've run into trouble.

Apple delivered a shock profit warning at the start of the year, blaming a lack of appetite among Chinese consumers for its newest models. And Jaguar Land Rover announced that 4,500 jobs in the UK would go largely because Chinese customers are buying fewer cars.

It looks gloomy across the entire economy. Last year GDP growth was slower than predicted, with official Chinese figures on Monday putting the figure at 6.6% - the weakest annual growth since 1990.

The Chinese stock markets was the worst performing of any major economy as the trade war with the US shook confidence.

That's not too much of a worry in itself - the stock market isn't a huge part of the Chinese economy (at least by Western standards) and foreign markets aren't that connected to it.

But the property market is also slowing - leading partly to that drop in consumption - manufacturing is contracting, and local governments are stuck with huge amounts of debt. Throw in the trade war with the US on top and you've got a tricky situation.

Now it seems to be affecting employment, too.

Tao Wei met me on his lunch break from an unpaid internship in Pudong, Shanghai. The 24-year-old goes to the Burger King in the shopping centre next door every day.

Unlike Xu, he's extremely well-educated, earning degrees in China and in the UK. But he's been looking for a job since he graduated from Sheffield University in 2017.

"It's a little bit hard compared with previous years because the overall economic situation is not very good and many companies, they don't want more people," he says.

But like many young people here, China's continued success is an article of faith.

"I trust China's economy will go up, up and up," he says enthusiastically, before he returns to the job search.

Others aren't so sure. Kobe Yang, a headhunter at J.H. Partners also based in Shanghai, says: "2018 was quite challenging and quite unprecedented.

"I think that 2019 may be even tougher but the situation might be a little bit complicated because it really also depends on the negotiations with the trade war as well, but I think for the next few years the situation won't be improved and will still be very challenging.

"We have a very high debt ratio and actually we need some structural reform to improve the quality of the GDP."

The next two years, Yang says, are all about "survival".

Many, though, have called time on the Chinese economy before. It hasn't happened yet.The Chinese Communist Party will go to almost any length to protect the economy, aware that much of its legitimacy as a regime derives from China's development. It's already announced measures to stimulate consumer demand and to loosen monetary policy.

It's not just the CCP who will be looking on nervously. What happens in China matters to the whole world, more than it ever has before.

 

The CCP will save the day apparently by stimulating demand and loosening monetary policy, as stated at the end of the article. Because if there are more zeros on the end of a currency, that makes people have a better standard of living.

But amazing to read that some of these people that came from the country to live in slave master provided, I mean employer provided, dorms in the cities are sometimes no longer able to send money back home to their peasant families, the peasants need to send money to THEM!

Then the kid with two degrees (because who wants to be just like everyone else and only have one degree) who is on an unpaid internship and cant find a job since leaving uni, I wonder how prevalent that is. Seems like he is another victim of this 90s voodoo that if we just get everyone going to university, magic will happen. Doesnt matter what they study, just get them into university, lower the standards if necessary! Oh well, maybe the kid can go into property development and sales. Oh wait, the market is falling.

This century is shaping up to be a very volatile one from my view. Things seem to be heading off the rails economically and socially. I thought things were meant to be solved in the 90s or 2000s. The wars of 20th century, the upheavals of the 70s, I thought that was all mean to be a thing of the past. But it looks like we are heading towards all of that sort of thing again. Talk about going round in circles. It is not one of those darkest before the dawn situations either. We seem to be only at dusk right now. The human race seems to be so dumb in many respects. It doesnt seem to be very intelligent as one huge hive mind.

Maybe I am just too cynical or pessimistic or think I know it all, but to me it looks like the way we do most things is wrong. All the supposed progress and we still cant solve basic social problems.

Not a word about the Yellow Vests in the media this weekend. Biggest story in Europe, not a word about it.

Share this post


Link to post
Share on other sites

I wonder if things would be better if people werent herded into the cities to live in shoe boxes with bits of paper that say "Degree" on them. What if people developed skills that were useful to improve and develop and raise the standard of living in their home towns and villages and countries, rather than being brain washed into going to a city to live in a shoe box to become social media marketers to get people to buy £1000 phones every year or to get people to buy the latest consumer fad.

I wonder if society would be better off if resources werent wasted on people going to university to study some nonsense like gender studies.

How is it the police have enough resources to send a squad to smash your door in if you say something to hurt someones feelings, and they have enough man power to accompany TV Licencing on a search warrant, but they dont have enough resources to investigate burglaries any more?

Share this post


Link to post
Share on other sites
26 minutes ago, AdamoMucci said:

I wonder if things would be better if people weren't herded into the cities to live in shoe boxes with bits of paper that say "Degree" on them. What if people developed skills that were useful to improve and develop and raise the standard of living in their home towns and villages and countries, rather than being brain washed into going to a city to live in a shoe box to become social media marketers to get people to buy £1000 phones every year or to get people to buy the latest consumer fad.

I wonder if society would be better off if resources weren't wasted on people going to university to study some nonsense like gender studies.

How is it the police have enough resources to send a squad to smash your door in if you say something to hurt someones feelings, and they have enough man power to accompany TV Licencing on a search warrant, but they don't have enough resources to investigate burglaries any more?

I agree with much of what you say but that's a cheap pop at the police. The whole point around policing is that all crimes have some representation. A warrant is very rarely issued by the TV licensing people and a warrant can only be executed by a police officer. 

If they said - right no longer enforcing TV licensing or speeding because we only sold x% of robberies then what would happen to the number of TV licences (not that I agree with having to pay to watch live TV, but as long it is the law I shall watch Netflix, Amazon Prime and YouTube)?

 

But anyway - I agree with your other sentiments. There's a dipper at work whose daughter is studying film and media (or some crap) at an un-ranked 'uni'. Freely admits she's only there for the experience and doesn't fancy getting a job. Uni is viewed by many kids as one great big festival/gap half decade where you study a hobby and rack up £50k and worry about paying that back later, which you wont because you'll never earn enough. Gutting really because you look at all the young smart talent out there studying architecture, medicine, law, other STEM and they're having to pay twice, once through their fees and then again through the progressive tax regime. 

Share this post


Link to post
Share on other sites

Like it or loath it we are interconnected in this globalised society........China is such a big country where their many citizens have more room for improvement, like India, I am sure they can manufacturer and sell services to themselves if a slowdown of growth in the more developed western economies.....building a good infrastructure has to be a start.;)

Share this post


Link to post
Share on other sites
1 hour ago, AdamoMucci said:

.

This century is shaping up to be a very volatile one from my view. Things seem to be heading off the rails economically and socially. I thought things were meant to be solved in the 90s or 2000s. The wars of 20th century, the upheavals of the 70s, I thought that was all mean to be a thing of the past.

Well things were pretty much still OK for most Western folks in the 70s, when my parents, when very young, could buy a relatively big hous for peanuts and the Western Capitalists had not quite rolled Neoliberalism fully into motion yet - them pulling the carpet out beneath everyone would not happen for another 15 to 30 years time (though things got kinda nuts for inner urban America in the late 1960s/into the 1970s, fueling lots of dystopian sci-fi action by the late 1970s and 1980s, often involving cyborgs and zombies).

The 1990s and even the first half of the 2000s, on hindsight, was stilll kinda OK for the US and UK, even if it was all built on wet sand by then and the cow manure was hitting the fan by 2007-ish.

The Russians view the late 80s and entire 1990s as a black era of near total socio-political implosion under that drunken garden gnome Yeltsin, rampant corporatised crimes, miserable living standards, and low intensity civil war - me thinks the United States of America may be heading down a similar road at a rapidly increasing rate of knots.

Edited by Big Orange

Share this post


Link to post
Share on other sites
6 minutes ago, Big Orange said:

The 1990s and even the first half of the 2000s, on hindsight, was stilll kinda OK for the US and UK

Seems like the golden era to me, in hindsight.

7 minutes ago, Big Orange said:

and low intensity civil war - me thinks the United States of America may be heading down a similar road at a rapidly increasing rate of knots.

Absolutely. But that sort of thing always hits the UK too a little further down the line. The hints are already there. Thats what Im worried about.

Share this post


Link to post
Share on other sites

Look, I'm not entirely convinced they know what they're doing. Is there a Canadian they can blame? :D

https://www.theguardian.com/world/2019/jan/18/cautious-consumers-chinese-economy-slows

Quote

As their country goes into what could be its slowest year of growth in decades, just above 6%, Chinese residents face rising living costs and debt, stagnating wages and worries about job security.

Many have seen their savings wiped out in peer-to-peer lending scams, as Chinese stocks reached new lows last year, and as the property market, the largest store of household wealth in China, declined.

Quote

The term “consumption downgrade” has become popular online, as netizens swap advice about how to save money.

I heard this phrase on a radio news article this weekend as well. 

Quote

China’s slowdown is the result of a government campaign to rein in excessive debt and calm property prices. “Then came the trade war, which hasn’t had a huge direct effect on the economy, but has eliminated the sense of certainty and stability central to business and consumer confidence,” said Scott Kennedy of CSIS in Washington.

They did this ON PURPOSE.

Quote

The government is trying to restore confidence by cutting individual taxes and lowering mortgage requirements. In the northern province of Hebei, the government has proposed a four-day working week to encourage spending. City officials in Beijing are asking retailers to stay open for longer to foster a “night economy”.

Quote

Others say the structural problems in the Chinese economy cannot be fixed so easily. “Turning on the credit spigots alone won’t fix the problem,” said Kennedy.

All I hope is that their ridiculous mania for decimating the entire world's population of pangolins, rhinos, elephants and tigers draws to an abrupt end. 

Quote

“Being brainwashed by consumerism is not a wise option for ordinary people like us,” she said. “Trying to get the best products with less money is not something to be ashamed of.”

 

Share this post


Link to post
Share on other sites
1 hour ago, AdamoMucci said:

Absolutely. But that sort of thing always hits the UK too a little further down the line. The hints are already there. Thats what Im worried about.

The idiotic "brain viruses" of SJW-ism and Alt Rightism have spread their roots through young UK society in recent years.

What early warning signs do you spot in Western society? 

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 297 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.