Vincent Safuto’s Weblog

Notes and observations

China’s high times coming to an end?

Recent stories in the news media, including this one from Newsweek, have detailed China’s woes.

Apparently, having an export economy based on jobs relocated from other countries is no guard against a bad recession when the people in those countries stop buying your products.

Most of the toys American children get at Christmas are made in China now, and with our economy heading downhill and layoff announcements surging, fewer parents have the money to buy toys and are cutting back severely, and it’s being felt in China, with factories closing and reports of unrest among laid-off workers increasing.

It just goes to show that while being a low-cost country does has its advantages, when those high-wage jobs migrate from wealthier countries to the low-wage country, the latter becomes dependent on the formers’ ability to generate new jobs that pay well enough to buy the products, even at reduced prices. Eventually, if that does not happen, there will be a day of reckoning. That appears to be what is happening.

It’s sad all around.

I exist in a privileged frame of reference, since I’m single with no children and unemployed, so I’m not buying very much beyond food and paying my bills. Multiply me by lots of other Americans, and China is really caught in a bad situation.

Indeed, China could push President George W. Bush and President-elect Barack H. Obama to hurry up with some sort of economic stimulus package, if only to get money into Americans’ pockets so they will start buying stuff again, including toys. It may be too late for Christmas 2008, but it would be a good start for Christmas 2009.

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December 13, 2008 - Posted by | Living in the modern age | , , , , , ,

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