RE: Who cares about China?
November 16, 2012 at 12:10 pm
(This post was last modified: November 16, 2012 at 12:16 pm by Anomalocaris.)
Because china has effectively no social safetynet, it's citizens are accustomed to save obscenely high proportion of their incomes for rainy day or old age. This dampens the average citizen's ardor to consume. It would take time to put in a social safetynet, assure everyone it really works, and convince them they can spend some of their income to buy discretionary consumer items now.
To add to the difficulty, the cost of living in china has risen enormously. Large block of Chinese who entered the workforce around late 1960s and early 1970s are coming close to retirement. They spend most of their working lives when china was poor and income low. So they have hardly saved enough to retire in the now richer and more expensive china. So these people will become a net drain on the Chinese economy as their retirement would have to essentially funded out of the incomes of current workforce, thus reducing their capacity to consume.
To add to the difficulty, the cost of living in china has risen enormously. Large block of Chinese who entered the workforce around late 1960s and early 1970s are coming close to retirement. They spend most of their working lives when china was poor and income low. So they have hardly saved enough to retire in the now richer and more expensive china. So these people will become a net drain on the Chinese economy as their retirement would have to essentially funded out of the incomes of current workforce, thus reducing their capacity to consume.
