Skip to main content

Is China's economy collapsing? This is a must see short film.

The factories are closing at a rate alarming the Chinese government. 20 million Chinese workers lost their jobs this year alone. In addition, 5 million Chinese college graduates this year cannot find jobs.

In the manufacturing sector, town after town have nothing but deserted factories and empty streets.  How did this all come about.

U.S. manufacturers found that because of the cheaper labor and workers willing to live 12 to a small dorm in China, they could boost profits by closing the manufacturing plants in the U.S. and move production to China.  They could then export the goods back to the U.S. for sale to the U.S. consumer.  As a result, the Chinese economy was built almost exclusively on the U.S. consumer. Meanwhile, the U.S. economy was built on this consumer spending boosted by asset inflation, which was only really paper wealth.

The U.S. economy, during this period of manufacturng outsourcing, had been built on "asset inflation" and the resulting consumer spending.  When the asset bubbles burst and the U.S. economy tanked, and U.S. consumers had nothing more to spend, it was inevitable this would affect the Chinese economy.  

The question posed at the end is interesting:
If China is able to spur it's own consumer spending for it's products manufactured, then it can survive by restarting production and getting people back to work.

However, for this to work, the salaries of the workers would have to rise substantially to allow them to afford the very products they make.

If this happens, would this cause the cost of importing Chinese manufactured goods to rise in the U.S.?  Would this then spur manufacturing plants and jobs to return to the U.S?

Originally posted to IT Professional on Sat Sep 12, 2009 at 06:37 AM PDT.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site