With tons of cash, China's buying the world | Hacker News Reader

With tons of cash, China's buying the world

business.rediff.com

11 pointsknown6 comments

"...The Asian gaint..."

Anyway, I wonder what China is going to do when they have difficulty developing a domestic market for all the goods they are producing. Because of the recession, U.S. consumers are buying less and saving more which has caused a massive drop in orders from Chinese factories. Couple that with the fact that while the Chinese middle class has grown, there are still hundreds of millions of people scratching out a living off the land. Hundreds of thousands of factory workers without work does not a stable political situation make.

Yes, what are the peasants going to do as they see the gap widen with the middle class? Is the time right for a peasant revolt that returns China to hard line communism?

Not sure but this also reminds me of the early 90's when the Japanese were "buying the world." Japan's problems pale in comparison to China's.

I believe the class struggle that you are suggesting is not so clear-cut here in China. Most Chinese I know work in the city and have their parents in the country-side. So, the "middle-class" that we normally talk about is the sons and daughters, and the "peasants" are their parents. They are not going to revolt among each other.

Their situation improved hugely from what it was 20 or 30 years ago. They went through hell during all these decades, so they built up such resilience that I don't think that they will revolt simply because they cannot get a job right now.

Also, the Cultural Revolution is still fresh on people's memory (even though no one talks about it). That was a "class-struggle" revolution (supposedly), and I don't think they would want to get back to that time, even if the gap between rich and poor keeps widening.

I agree that there is almost certainly not going to be some mass revolt but people are generally unhappy when they don't have jobs (as evidenced by the current political climate in the U.S.).

My only point is that a significant portion of the economy is based on exports for which demand has dropped and may never return. Will domestic demand fill in that gap? From what I've read, that seems unlikely. The government is going to have to maybe shift their economic strategy to cope with this fact.

They might start buying the things they produce themselves or invest in their own country. As much as the US government tries to punish savers with low interest rates it seems as though the people with savings end up with all the options.

The problem with China, in my mind, are several fold, like any other country to be fair.

1) Its primary industry is export. Is it really sustainable especially since other countries in the World may soon provide even cheaper labor and economic realities may force countries which consume China's products may reduce the demand.

2) It is artificially controlling its currency. I'm not an economist but how long can they keep doing this? Can a country really keep this going on for too long?

3) Its internal problems related to widening economic gap, human rights, and a communist government are going to get worse when people with new found (or lacking) economic freedom revolt. When will this happen, probably soon or maybe never.

Only time will help how it pans out in the future.

Reply on news.ycombinator.com