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What are the biggest challenges facing China?
Excess liquidity, balooning credit, an asset boom and over-investment in loss-making heavy industries. All factors in Japan's downturn through the 80s. ("A Bull in China")
What do you think are the biggest challenges.
What do you think are the biggest challenges.
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I guess many people can writes books related to your questions.
I am a trader and my family members have done business with China's manufacturers. So in my personal view, at this current moment China's economy is based on producing cheap products of anything. However as their economies grow and the people's standards of living and expectation grow, their cheap manufacturing cost advantage will disappear to countries like India or Vietnam.
China needs to slowly find out what can they do best in terms of not only price but quallity and creativity based on their country history, culture and people's ability. Like Koreans and Japanese are electronics. For Swiss is the shipping industry. For Chilean is the wine and fruit. For Argentinians is their cow. ETC ETC ETC. Compete in a global free trade market with their advantages.
I am a trader and my family members have done business with China's manufacturers. So in my personal view, at this current moment China's economy is based on producing cheap products of anything. However as their economies grow and the people's standards of living and expectation grow, their cheap manufacturing cost advantage will disappear to countries like India or Vietnam.
China needs to slowly find out what can they do best in terms of not only price but quallity and creativity based on their country history, culture and people's ability. Like Koreans and Japanese are electronics. For Swiss is the shipping industry. For Chilean is the wine and fruit. For Argentinians is their cow. ETC ETC ETC. Compete in a global free trade market with their advantages.
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Drucker correctly characterizes the global economy as knowledge worker, post industrial revolution. Suggesting quality and knowledge will be a higher commodity demand than manual labor. Robots will replace manual labor once cost drops to certain level. Outsourcing will cost more as labor wages increase, productivity increases, and emerging economies mature.
US manufacturing will continue to remain strong in certain sectors. However, outsourcing for now is cheaper because of taxes, regulation, and currency differences. Millions of jobs are being deplaced.
US manufacturing will continue to remain strong in certain sectors. However, outsourcing for now is cheaper because of taxes, regulation, and currency differences. Millions of jobs are being deplaced.
If you're talking China in general, it's that they were experiencing double-digit growth when the recession hit. It's like throwing a car in a high speed chase into reverse, and has ramifications of all kinds, from unemployment to inflation to lowered exports and trade deficits to goods rotting in warehouses.
For the Chinese people, it's a massive societal change. When rural industrialization stuttered in the 80's, people left their hometowns for big cities. Those cities, and the companies in them, grew steadily and then rapidly until last year.
Now, companies are shuttered all up and down China. Companies that were booming just a year ago are abandoned buildings.
So that means these workers, many of whom at the bottom of the rungs were underpaid and overworked, are having to make their ways home to homes some left decades ago. And since so many in those towns left, there isn't a lot to go back to.
It's kind of like what happened in some areas of rural America in World War II, when so many young men went to fight and young women went to work in factories in cities, that when an older person passed away, the home was shuttered. In some very small towns it killed the town. And that was in just a few years. This has been going on in China for almost three decades.
So now we have people returning to tiny towns were there is next to no infrastructure; towns where only a handful of houses are occupied. Unemployed people going nowhere.
Supposedly the government will take care of them; but what if there is literally no one there? Rural China is a whole different picture than urban China.
That is China's worst problem. When you have masses of unemployed people with nowhere to go, you have the seeds of all kinds of problems.
For the Chinese people, it's a massive societal change. When rural industrialization stuttered in the 80's, people left their hometowns for big cities. Those cities, and the companies in them, grew steadily and then rapidly until last year.
Now, companies are shuttered all up and down China. Companies that were booming just a year ago are abandoned buildings.
So that means these workers, many of whom at the bottom of the rungs were underpaid and overworked, are having to make their ways home to homes some left decades ago. And since so many in those towns left, there isn't a lot to go back to.
It's kind of like what happened in some areas of rural America in World War II, when so many young men went to fight and young women went to work in factories in cities, that when an older person passed away, the home was shuttered. In some very small towns it killed the town. And that was in just a few years. This has been going on in China for almost three decades.
So now we have people returning to tiny towns were there is next to no infrastructure; towns where only a handful of houses are occupied. Unemployed people going nowhere.
Supposedly the government will take care of them; but what if there is literally no one there? Rural China is a whole different picture than urban China.
That is China's worst problem. When you have masses of unemployed people with nowhere to go, you have the seeds of all kinds of problems.
source(s):
http://www.fundsupermart.com/main/research/viewHTML.tpl?lang=en&article...
http://www.bangkokpost.com/business/economics/12062/china-s-biggest-challen...
http://www.bizchina-update.com/content/view/1929/2/ (Consider migrant workers are a huge chunk of the workforce)
http://www.fundsupermart.com/main/research/viewHTML.tpl?lang=en&article...
http://www.bangkokpost.com/business/economics/12062/china-s-biggest-challen...
http://www.bizchina-update.com/content/view/1929/2/ (Consider migrant workers are a huge chunk of the workforce)
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