By continuing you agree to eChinacities's Privacy Policy .
Sign up with Google
Sign up with Facebook
Q: Blissful ignorance amongst the Chinese to send the country back to poverty and famine?
Having read the news about the Chinese crisis and having talked to the people here I am slightly concerned. During the 2007 crisis in the West, everyone you talk to seems to know about what’s going on and about what steps to next take.
However here in China I see a completely different situation. The markets are free-falling, the government is trying to cover up the crisis through half-baked fiscal policies, and as a result the average person on the street hasn't got a clue about what actually is happening.
My fear is that the Chinese, being the sneaky little gamblers that they are, will continue to buy stock and invest their life savings into an economy which is destined for doom.
Everything you see on the street; from the 18 year olds in porches to cleaning ladies with the latest iPhone 6, is mostly bought on credit. Well this begs the question- what happens when all these people fail to pay off their loans and default?
My expectation is that we will see something similar to the US situations that we witnessed not so long ago. The only difference will be that, the US is a (more or less) well governed country. It bounced back, as did Europe (excl. Greece of course) and will always bounce back.
China really got themselves in a tight spot. For many years they have dominated consumables manufacturing sector, but they failed to innovate. The quality of what they produce was shit 10 years ago and is still shit now. Only difference being is that the price has inflated by quite a bit. Manufacturing is quite rapidly moving to other countries in the East. No new industry has been established here. Whilst most countries post-industrial revolution have moved into the tertiary service sector, China remains a nation of farmers and factory workers. The finance industry here is a joke and the service sector… well we all know what the service is like here.
So what will keep China from plunging back into pre-globalisation times? How long can this cover-up act go on before people realise what the hell is going on?
8 years 34 weeks ago in Money & Banking - China
They are not going back to the 70's, that would be a ridiculously over-the-top fuckup. Since the 70's, they have a lot more infrastructure, trained people, etc. I see China a balloon which have been kept under water (thanks to Mao's "70% good and 30% bad"), and then left float on it own : the balloon rocked up and jumped out of the water. Because it happens on the scales of decades, people are used everything to go up and fast... Until the balloon reach a maximum a goes back to float to its natural equilibrium, on the water surface. This is where we are now, going up slower and slower until it will go down a bit. Not going under water again, unless Maoist-style policies are implemented back.
Shining_brow:
Q: given how bad this stock market has been badly manipulated, and all the other crap that happens here, do you think it's possible that Xi and BJ do go back to some Maoist era policies??
icnif77:
'...been badly manipulated..' 
Proper term would be 'regulated'
.
They arrest some 20 people today.
DrMonkey:
@Shining_Brown. If all things are nationalized, the country goes autarchic, I would be really surprised. People are used to profit and the general idea of market. I would say, what guides our benevolent benefactors, more often than not, is the fear of the mob and obsession of control. So stock market should obey like a party drone would, we are afraid of sign of weakness, and of course it's a ridiculous denial or ignorance of economy. That same fear of the mob would prevent going back to nationalization of all things. People are too addicted to market and cash flowing around.
I can assure you there are many people that know about the crisis. So many people have put whatever they had into stocks. Retirement is going to suck for a lot of people.
Do many Chinese really buy things besides homes with loans? I'd always assumed they were debt-adverse and paid cash.
expatlife26:
Compared to the US it is tougher for people to get consumer credit here. I don't think it's so much that they are risk averse but that they lack the opportunities to be irresponsible given to people in the US.
For example no bank would issue a credit card to the vast majority of people here.
"The only difference will be that, the US is a (more or less) well governed country. It bounced back, as did Europe (excl. Greece of course) and will always bounce back."
I would seriously debate that assertion. The US may have bounced back with regards to economic growth, but the health and economic structure of the country, particularly with regards to living standards has gone back a step or two. In many ways it feels as if many Western countries have put themselves on a path where they'll soon find themselves intersecting with China (China being on the way up and us being on the way down) in terms of economic development and living standards.
They are not going back to the 70's, that would be a ridiculously over-the-top fuckup. Since the 70's, they have a lot more infrastructure, trained people, etc. I see China a balloon which have been kept under water (thanks to Mao's "70% good and 30% bad"), and then left float on it own : the balloon rocked up and jumped out of the water. Because it happens on the scales of decades, people are used everything to go up and fast... Until the balloon reach a maximum a goes back to float to its natural equilibrium, on the water surface. This is where we are now, going up slower and slower until it will go down a bit. Not going under water again, unless Maoist-style policies are implemented back.
Shining_brow:
Q: given how bad this stock market has been badly manipulated, and all the other crap that happens here, do you think it's possible that Xi and BJ do go back to some Maoist era policies??
icnif77:
'...been badly manipulated..' Proper term would be 'regulated'.
They arrest some 20 people today.
DrMonkey:
@Shining_Brown. If all things are nationalized, the country goes autarchic, I would be really surprised. People are used to profit and the general idea of market. I would say, what guides our benevolent benefactors, more often than not, is the fear of the mob and obsession of control. So stock market should obey like a party drone would, we are afraid of sign of weakness, and of course it's a ridiculous denial or ignorance of economy. That same fear of the mob would prevent going back to nationalization of all things. People are too addicted to market and cash flowing around.
Well, there is a general mainlander tendency to do things in extremes, with no middle ground (and not a lot of fore-thought). And combined with the inherent greed and the subsequent need to show off that wealth (read, spend/blow it all)... maybe.
However, BJ has the Winter Olympics coming up, and there are other international events happening, so they can't do too much... unless you start to see more internet censorship, and reporters getting kicked out or jailed.
expatlife26:
Yeah that's really true about the extremes. It's much more of a monolithic society when it comes to conventional wisdom.
Like if the thing to do is invest in the stock market, it becomes the raison d'etre of a much much broader section of people than it would in the west.
If the thing is to buy property than nearly everyone you talk to becomes completely fixated on it.
If it's the thing to do than everybody seems to jump right on the bandwagon.
Scandinavian:
I somewhat agrees on the extremes, but with a twist. A lot of people are just doing as others are. So there is no one growing up knowing there is anything but the extremes. Heck, my wife is the same, she is either super happy or not, she doesn't have a middle-mood. Which is great, helps predictability, except no one ever know when mood swings from good to bad.
