Sure China has many, many problems. Many problems with government and economic policy. But they are “slower rate of growth than otherwise” type problems, not cause an implosion type problems.
In terms of manufacturing it’s not just cheap labour (which I agree is getting more expensive, which will cause considerable disruption) but the economies of scale, and efficient infrastructure to many markets around the world.
So while there are plenty of countries where labour is cheaper than china, china remains one of the best places to build a factory, and that will be true for a long time even under the worst case projections.
Then in terms of services, chinese education is at a very high standard. Sure, it doesn’t emphasize critical thinking or originality, and that might be a bit of a problem down the line. But in the meantime, industries are not struggling to find highly-skilled employees.
What I’m saying is that the economy here could stagnate, anything’s possible. But I’d be willing to bet it will not happen for at least a decade, at a point where china is considerably richer than it is now.
So… why the widely-reported exodus of millionaires, if this is the place to get rich?
I worked in QC in a Chinese factory for some years. Trust me, there was one thing and one thing only that brought in the overseas customers. Cheap. End of. They paid a lot for cheap in terms of equipment, the skill of the workforce, the overall managerial attitudes, particularly pertaining to quality, and much else.
There is an exodus of SMEs when it comes to manufacturing here.
As well as my two years in industry, I spent seven years as a college teacher here. The education system sucks big time, sorry. I’m amazed to hear anyone who has experienced it say otherwise.
Please kill this idea that Japan is unarmed. In case you haven’t been paying attention, Japan has the 5th largest military budget in the world. And it’s not being spent on pop-guns.
Japan’s civil defence force works within strict parameters that do not give it the flexibility of most other nations when it comes to military activity.
Moreover, the most threatening of its neighbours is a nuclear power.
No… but it does dictate how you choose to arm yourself and what your capabilities are. It also dictates how treaties with other nations would be affected. It also dictates how much of your defensive capability lies within the remit of other parties.
It’s not so simple as “The USA spends the most on the military, therefore it has the biggest stick; Japan spends the fifth-most, and therefore it has the fifth-biggest stick.” There’s sticks and there’s sticks.
I’m not so sure what that means, to be honest, so I’m going to say what I assume it means in plain English for Isamu.
:rolleyes:
If you’ve got a suit of armour on and both hands tied behind your back, and someone comes at you with a hammer, he can bang away at you and bang away at you and bang away at you until your armour gives way. Your armour may break his hammer, but he’ll get another one. And another. And another. However effective your armour is, in the end, the guy with the hammer is going to win because he’s beating the hell out of it and not suffering at all in so doing. He just needs a lot of hammers.
Military strategy is predicated upon offensive and defensive capability. If China flies bombers over Japan, Japan can keep shooting them down. What it can’t do is fly its own bombers over China and take out its air strips, or take out its factories making more aircraft, or take out its bomb-making factories. All it can do is send its population into their shelters again and again and knock whatever it can out of the sky from what China is throwing its way.
Japan has no aircraft carriers by which it may extend its capabilities, no amphibious landing vehicles by which it may - say - capture an island being used as a base, or recapture one that’s taken from it. It has no surface-to-surface missiles by which it can degrade China’s offensive capabilities.
It’s like the old game of space invaders. If you’re good at it, you can last a long time as more and more come down at you and get a high score, but you can’t win because you can’t stop the space invaders coming down at you. That’s an option the game doesn’t provide for, and that’s the option a purely defensive capability doesn’t provide for in the real world.
Well, first we’d need to establish that the exodus of the super-rich is significantly faster than other countries at a similar stage of economic development. Then we’d need to establish that such an exodus would have a significant effect on the economy.
Many first-world countries had to do the same to get where they are. Japan is the obvious example; for many years much of manufacturing was predicated on making cheap (and inferior) copies of western designs.
China is already moving off the bargain-basement spot: land costs are rising, labour costs are rising considerably. But it’s still often the cheapest place in a bang for your buck sense, because, like I said, the infrastructure and economies of scale that China now enjoys.
Sure, you can build your widget-assembly factory in Malawi for less, but you’ll have to import your woggles and toggles from hundreds of miles away, instead of down the street. And every ton will cost $500 to get to port instead of $50.
Now, that’s for 15-year olds. Meanwhile there’s plenty of room for improvement in higher education, absolutely. But the same is true of many countries.
Indeed, very few countries at China’s stage of development have top-notch HE. That comes later.
On the exodus of millionaires, significant enough for there to have been several headlines, the most recent I’ve seen being this:
The relevance of this being I predicted it being likely even before I saw the first of the news reports. For a full explanation, you’ll have to see the longer post back there.
You talk as if China can continue with this model indefinitely. Again, it can’t, see longer post. There is already an exodus of manufactury. Again, see the longer post and, in that post, why there is no plan B, unlike Japan. You move forward when you stop making other people’s mousetraps and start making better ones yourself.
Yes, rote learning bodes well for maths. They’ll probably have some of the best mathematicians in the world. It doesn’t bode well for design. It doesn’t bode well for invention. It doesn’t bode well for anything else much if the nation is to move forward. You do not suppress creative thinking and move on to becoming a creative nation as Japan has done. You’re stuck with making other people’s stuff for less, and that - for common-sense reasons - means you can never attain the level of the nations you supply with that production.
Singapore has the same problems, and I wonder if it’s an Asian problem to be unable to think creatively and without fear of failure, or the spectre of the standardised test…
Oh! I wasn’t aware of that being the case for Singapore as well.
To be fair it’s not been so many decades since the ethos behind the western education system followed a similar ethos.
Some may argue we’ve gone too far the other way. For a while back there - I don’t know if this has changed - students could pass maths exams with the wrong answers provided they demonstrated they understood the method.
While I can see the logic in that approach, who wants a mathematician inadequately careful in his or her calculations and who keeps getting the answers wrong?
I’ve never doubted that lots of millionaires are / will leave China. The same happens with any emerging economy, and indeed many rich nations.
Is there anything to suggest that it is worse in the case of China?
The bottom line – what direction investment is flowing – is undoubtedly into China, and indeed if there is any risk of economic meltdown it remains the threat of a bubble (hence why many economists see the recent slowdown in growth as welcome).
No, I’m saying any idea of a sudden collapse or stagnation from here is very unlikely. In terms of whether the model can change, it already has. Like I said, labour is already much more expensive than it was, land is also more expensive, the current model is based on economies of scale and good distribution channels.
Can the model change in future? Well, $220 billion of R&D spending says yes. There are plenty of Chinese companies that have made the transition from entry-level to mid-level products. I see exactly the same thing happening as happened with Japan.
…and science and literacy.
So…you think in Japan they emphasize original thinking and not rote learning?
Even if this were true (and it’s not), the worst case is China starts to stagnate in about 10 years time, like I said. The idea of a collapse for this reason, or of this economic model being in some sense unsound, makes no sense at all. I can only speculate that it’s based on some sort of zero-sum philosophy of economics.
Well, fair enough. All I can say is you’re seeing a very different China from the one I’ve seen and have an entirely different outlook on the sustainability of the economy from what I’ve seen and read. As for the education system, I just don’t recognise it.