China's coming economic issues don't come from Chinese consumers, but from export businesses. There may be some domestic demand, but China has way too much excess capacity to be absorbed domestically. The worldwide demand for Chinese products is down big, just look at US retail numbers for the Christmas season.
From the trenches of China
- Thread starter svrart
- Start date
I speak from first hand experience when I say that at least 40% of the factories in Guangdong province have shut down completely, and many of the ex-workers have started to migrate to other parts of China looking for work or have gone back to their villages.
Wow.
So, China is crowded? A lot of people need to buy food there? I had no idea.
Thanks for the tips.
Not only that, he's observing people buying groceries before the biggest holiday of the year in China (Chinese New Year, which is January 26th this year).
Great observation and highly useful!
You must be stock_trad3rs long lost relative.
Well said... Even the Chinese government has confirmed that over half of the toy factories hv gone out of business already.
I work a Chinese living in HK and I work in semiconductor industry. I sell parts frm very small factories to big customers like Foxconn (which make things for Apple, Dell, etc).
I can't tell you the figures but we get f'cst frm the customers and disti. Just being bad is not enough to describe the situation.
I believe you give the advice for well intention but pls remember that out of 1.3 billion population in China, around ~800M lives in the farms and they hv never visited a mall before.
An avg farmer in China makes USD600 a yr.
Quote from number22:
With proximately 60% saving rate, Chinese should spending more on things that they are building. I heard that Chery cars are inexpensive, only 30,000 yuan(元for the entry level, attract a lot buyer in china.
Again another distorted view...
China citizen income only accounts for 3x% of the GDP, less than half of the % you see in US.
So they are poor and hv no financial security. That is why they still save so much money despite the low income (both in absolute value and %-wise of GDP).
When foreigners visit China they will be impressed by the infrastructure and then assume that economy must be very good. Besides, many big companies make huge profits.
The problem is that this is just due to government policy that they try to develop a few key big companies and spend 50% of the GDP on factories/roads/infrastructures, etc.... leaving the ppl less well off.
They can play this game as long as they can hv a GDP growth rate of at least 8% a yr so even if the citizens can get 30% of the output they will still stay employed and happy.
Now so many factories hv shut down that around 7.5 Million ppl hv already returned frm the factories in the cities to their farms.
So one thing you know immediately is that they hv no money and aren't so happy.
Another issue that ppl may forget is that... when they leave their farms for the city, they hv already rent the land out either to other ppl or to some local organizations. When they return, they will fight with each other for the limited land resources.
Also, regarding the Cherry car.... What really counts is NOT car industry. 99% ppl in China can't afford an "entry level inexpensive" car that costs USD4000 if they only make 600USD a yr.
Most Chinese hv NEVER gone to the cinema before. Most of them can watch TV but maybe even VCD/DVD is a big luxury.
There are still many rich ppl in China. They are many just b'coz China population is big in the first place. But then if they can already afford, they will try to buy foreign things.
I live in Hong Kong and very often I buy things frm China. On the other hand, most ppl I know (overwhelming middle class) in China always to buy foreign brands.
You don't really see a lot Cherry in China. Most cars on the road are foreign brands (even though they are made in China).
Really, it's annoying that you do not fully spell 'have' or 'people', but do everything else. Please drop that bad habit in respect to yourself and people that read what you have to say. If you want to be taken seriously, that is.