Chinese Economics Thread

[xiabonan]

i never studied economics so I sometimes get lost when economists go technical in their presentations. I just look at regular things I see in the street to gauge how that place is doing economically. when 2 years ago, GM sold more cars in china than in the entire United States I knew that was serious.

Yes it's true. I study economics for my A levels, and I can tell you that economics really is about observing the world and come up with universally understood terms and jargons (among economists) to describe and summarize what is happening in the real world. This is why very often economics theory explain past events best but fails to predict future events. Hence, whenever theory fails, the job of the economist is to observe and extract data in order to improve and perfect the existing model--or complete discard it to build a new one.

Back to topic. Yes the sales of cars is one very important observation. Nowadays real-estate developers use free parking lots that comes with the apartment as a huge selling point. To buy a parking lot in many Chinese cities can cost you from tens of thousands of yuan to hundreds of thousands yuan. To put it into perspective, that's equivalent to most middle class family's annual income in that city, and is often much higher than the price of the car itself.

This just shows how strong the demand for cars is.

Another example I can give is that of roads. In recent years when I went back to my home province Henan (an inland province), I realise most expressways are being upgraded (my province already have over 5,000 km of expressways) to six lanes or even eight lanes. China's expressways are almost all raised above the ground using pillars and enclosed thus it is very costly to widen, but they're doing it nonetheless because current capacity is already not enough and there's often kilometres long of jams on the expressways.

Another example is how urgently the governments are developing subways. When I left my city in 2008 the construction work of my city (an inland provincial capital named Zheng Zhou) only just began. Today the city's first subway line is already operating (41km long), the second line nearing completion, and third and fourth under construction, and the 5th and 6th already planned out. All these will be completed in 2020. Beyong 2020, there are 17 lines already planned out, connecting the city with the New Distrct, Airport, and nearby cities.

This is not just hometown, this is carried out at at least 10 or even more cities countrywide. And this is just subway construction alone.

 

[Lethe]

Do they know that foreign audience find their wholesale copying shameless? Do they need to copy right down to the smallest details? But you poor copies of foreign goods. Instead of copying the same quality, they make the products thinner and use lower quality plastics and they never seem to test for endurance. After one week of use, they break.

I think the issues of copying and poor quality are both related to the "advantage of backwardness" that Justin Yifu Lin speaks of, and are not qualities intrinsic to China, but rather a function of her current phase of development. I think you will find that China in this respect today is little different than Korea in the past, or Japan before that, or even the United States and Germany as they swallowed technology from Great Britain in the 19th and early 20th century. A generation from now, I think the stereotypes we attach today to Chinese goods and notions of lack of innovation will seem quite silly.

 

[antiterror13]

Do they know that foreign audience find their wholesale copying shameless? Do they need to copy right down to the smallest details? But you poor copies of foreign goods. Instead of copying the same quality, they make the products thinner and use lower quality plastics and they never seem to test for endurance. After one week of use, they break.

The shoes look good and cheap, but last only three months because the heels are hollow with a thin sheet of rubber. Garden shears that rust after three to four months so that they seize and becomes unusable. Selley's shears, though costing double, rust only slightly and I am still using it after more than ten years. So, actually the Chinese goods end up costing more.

hmmm ... I'd bet the Selley's shears alse made in China ......

So, it is not about the quality of Chinese products, not at all .. but what you can afford ... you get what you pay for. And China produces low and high and very high quality products based on customers requirements

Back to the garden shears you are talking about, some (perhaps most) just can't afford or just don't want to spend too much money for that .. so they buy the cheap one (made in China) and for some other people (perhaps like you .. ) want to have higher quality and durable one .. China produce the as well .... so, it is about choices and you as a customer make the choices

Don't blame China when you buy a cheap unbranded garden shears for a dollar and it doesn't last as long as Selley's which would cost you cost $20

 

[broadsword]

The problem is that consumers don't get what they pay for when buying cheap stuff made in China. They get much less than what they pay for. Can you imagine a kettle costing 1/3 of established brands and leaks after the second use?

 

[Lezt]

Do they know that foreign audience find their wholesale copying shameless? Do they need to copy right down to the smallest details? But you poor copies of foreign goods. Instead of copying the same quality, they make the products thinner and use lower quality plastics and they never seem to test for endurance. After one week of use, they break.

The shoes look good and cheap, but last only three months because the heels are hollow with a thin sheet of rubber. Garden shears that rust after three to four months so that they seize and becomes unusable. Selley's shears, though costing double, rust only slightly and I am still using it after more than ten years. So, actually the Chinese goods end up costing more.

Well, that an extreme case and it depends; you don't hear JF17 falling out of the sky eventhou it is much cheaper than equivilent american hardware. Likewise, chinese goods which meet national standards (which are tougher than the EU and US) are actually as good as product elsewhere in terms of durability. Hell, my friend rode a chinese built carbon fibre bike across the USA/Canada without it breaking; it is still sth like 4000 USD, but still a fraction of what cannondale offers for similar quality.

And on copying, you do realize that the Europe of 1800s complained that the USA were shamelessly copying their goods down to the stamp mark and producing cheap knockoffs? That the 1850s, the UK and France felt Germany were producing low quality knockoff of their goods; and in the 1900s, the west felt that Japan was shamelessly copying their goods down to the proof marks?

Look where the USA, Germany, Japan is today in terms of "innovation" and "design" compared to the old masters like the UK or France? It is only a question of time

 

[xiabonan]

The problem is that consumers don't get what they pay for when buying cheap stuff made in China. They get much less than what they pay for. Can you imagine a kettle costing 1/3 of established brands and leaks after the second use?

My family have been using Made in China for a very long time and this never happens.

Our first air-conditioner was a Chinese brand and it was bought when I was born, now that 19 years have passed it is still working.

Our fridge, TV, DVD player, fan, washing machine, even car, were all Chinese products, and they all lasted more than they should. Some even lasted 10 years.

I don't see why and how if the case you have presented is true, Lenovo as a Chinese brand can become the largest PC vendor, and that Gree can become the world's largest manufacturer of air-conditioner, and that Haier has the largest market share of white goods globally, and that Huawei is the world's largest manufacturer of network gears, and that Zhenhua is the world's largest manufacturer of cranes and steel structures--mind you the crane that the Brits are using to build the Elizabeth Class Aircracft Carriers are Zhenhua products.

China is also the world's largest producer of ships, computers, phones, high-speed trains, among many other goods. Are you suggesting that these goods all break after the first use?

How about this, you think of something that you use everyday and which you find durable, look for its label and see if it's Made in China? High chances it's going to be.

 

[Equation]

The problem is that consumers don't get what they pay for when buying cheap stuff made in China. They get much less than what they pay for. Can you imagine a kettle costing 1/3 of established brands and leaks after the second use?

The consumers sure won't be complaining about any Chinese products in the upcoming Thanksgiving and Christmas holidays shopping.

 

[SteelBird]

I saw this on my Facebook today. I'm not good in economics, so hope someone will confirm if this is true or fake.

 

[jobjed]

I saw this on my Facebook today. I'm not good in economics, so hope someone will confirm if this is true or fake.

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Per the IMF's calculations, China's GDP, when adjusted for purchasing power disparity, has surpassed the US' GDP this year.

I am quite shocked, I was under the impression that China's GDP (PPP) was around $13 trillion; didn't realise my figures were off by $4 trillion!

 

[antiterror13]

The problem is that consumers don't get what they pay for when buying cheap stuff made in China. They get much less than what they pay for. Can you imagine a kettle costing 1/3 of established brands and leaks after the second use?

Nobody is forcing you to buy "cheap" unbranded Chinese product

The thing is ... those products are still in the market in a huge number ... means there are a lot of demands for those .. as simple as that