Chinese economy not to take hard landing

Xidu

SpaceTime wrote: »

China still has a couple of decades to grow yet before it gets up to speed with developed economies but it is getting there.

In terms of GDP it's still a lot smaller than the EU and US. The exciting thing for investors is that it had potential to grow where as the US and EU are (despite the recessions) large, stable economies that only need to maintain or grow slowly.

China GDP $7.38trillion
EU GDP $16.555 trillion
US GDP $14.99 trillion

For China to reach the EU and US levels it needs to develop its own consumer market on a much wider scale. At present its growing but it's not spread across the whole country and it's very much concentrating on an emerging middle class in the key cities.

I do however think that China has much better potential than say India which is totally hampered by the class/caste system that will prevent a proper huge consumer economy form emerging.

China is far better organised.

However, I think I'd democracy and more freedom doesn't emerge in China it will suffer either some serious instability as people demand it and it will continue to lose some of its brightest and most creative people to the west as they pursue more freedom.

I know quite a few Chinese academics and engineers who moved to Europe and the States for that reason. They were just unwilling to live under an authoritarian state.

So really without change, it can't really attract the brightest and the best from other countries or prevent brain drain

There's also a huge number of wealthy Chinese opting to live abroad in Singapore, European destinations, the US, Australia etc etc because they aren't keen on the Chinese system and what might happen in terms of protection of their assets etc

I honestly think that without a movement towards a more liberal government system and introduction of democracy, freedom of speech and accountability China is limiting its own potential.

I am hoping that what will happen is that the government realises this and there will be a gentle transition towards democracy with increasing personal freedoms just evolving as that happens.

if u compare the welfare system, environment for living, china has long way to go, to make most of Chinese being look after well by govnt, however, it doesn't affect china govnt to be one of the most powerful one. It's one party govnt, n they owns everything in the country. People who bought house there only owns 70 years property right. Govnt knows how to make more money from Chinese, n most Chinese r so used to live in a hard life. They will complain very little.

There r a big number of Chinese probably make 500 euro a year. There r some Chinese own 100billion. In big cities like Beijing, Shenzhen, shanghai, 60k euro a year would be considered as a middle class. 20-30 is lower middle. But in other small cities, 20-30k is ver very good. It really depends on the house cost, in big city, it cost 300k euro to buy a 120sq meter apartment, most of the young people will get their parents help on finance. N end up paying for mortgage for the rest of 30 years, just like people here.

maninasia

SpaceTime wrote: »

There's also a huge number of wealthy Chinese opting to live abroad in Singapore, European destinations, the US, Australia etc etc because they aren't keen on the Chinese system and what might happen in terms of protection of their assets etc
.

It's nothing to do with being keen on the system, these people usually came from the system otherwise how did they make so much money?
This is because many of these 'assets' have been stolen by corrupt officials or else they are keeping their money away from the China revenue department. These foreign China won't tell you honestly how they got their money. The kids are often well educated and go to good colleges etc. but their parents are rotten as hell.

The other main reason they live overseas is that they know the environment and lifestyles are better, in general, and the education system is easier going but highly rated. Air pollution in China is off the scale, absolutely terrible.

SpaceTime

There's some of that but I also hear lots of Chinese professionals who just leave because they experience a few years abroad and decide it's a better life for themselves and their kids.

Xidu

maninasia wrote: »

As for brands coming out of China, IP infringement and copying is just as big a problem for local companies as foreign companies.

There are many reasons for this. I deal with Chinese companies, for a recent case I am dealing with I asked for a quotation from a product by e-mail. Within 1 week 3 individuals from that company got in contact with me privately about supplying the product.
For another company last week, they turned down my order but a member of staff contacted me privately to and put me in contact with another factory.

The reasons for this are not just cultural but due to the poor treatment of workers, in particular the very low salaries. If the companies simply offered better pay and in particular commission to their sales staff they wouldn't need to try and make money on the side to the detriment of their employers.

These things happen in small trading companies. Won't happen in medium n big companies at all. When u r dealing w small companies, u got to be ver careful, u could end up get **** products or even worse. I worked for the biggest trading company li&feng for 8 years. Their big customers r like Walmart, target, tesco...they don't deal w small buyers.

maninasia

Unfortunately I am not Walmart or Tesco, nor are billions of people, including locals.