Reply With Quotethe deal is that the richer you grow the slower your growth becomes....
China’s Growth Slows, and Its Political Model Shows Limits
On Thursday, China released data that showed its economy was continuing to weaken. Many economists have been urging the government to loosen controls over the financial system, to support lending to private businesses while reining in state-owned enterprises, to allow more movement in exchange rates and interest rates, and to improve social benefits.
More:http://www.nytimes.com/2012/05/11/wo...ef=global-home
the deal is that the richer you grow the slower your growth becomes....
What do you mean by this cliche?Originally Posted by CrYsIs
There is limit for growth. If you have nothing, you can grow much. But as richer you get, as harder it becomes to grow even more. And there is limit of demand too, so one cannot grow over it either.
That makes absolutely *zero* sense. There is huge growth potential in China. To say it is at some sort of 'limit' right now is nonsensical.
China has a large population of poor people and large areas that are relatively undeveloped. This is all pure growth potential. If those areas are developed, the people living there get better jobs, more income, and consume more. They also become more educated , more productive and more creative.
What is holding back China is political, economic and cultural factors, not some imaginary 'growth limit'. The utter bullsh1t that Chinese come up with to explain their problems in a face-saving way never ceases to amaze.
If you have 1 dollar than adding 1 additional dollar gives you 100% grow. Adding additional dollar to that gives you only 50% grow etc. And its hard to increase grow always at the level that would give you same double digits level all the time.
You just failed Econ 101. If you had the slightest clue about economics, you would realize that it is not a zero-sum game. If it was, no nation could ever go from a poor nation to a rich one. Productivity, development and innovation create wealth. So no, you do not just have one dollar. You invest the dollar, it grows, then you have two dollars. You invest most of that, and you have three dollars, and so on.
That is exactly what China has been doing, and how they experienced so much growth thus far. They invested their resources in creating a manufacturing base and an educated populace to work in those factories and engineering firms. That has created tremendous wealth, much of which was reinvested to grow the economy more. But with expanded economic freedom came more educated people. Now the children of the middle class are demanding political change, and the government is scared. This has caused them to limit freedoms and tighten government control in general, which hurts the economy by straight-jacketing business. Corruption is also getting out of control, which further hurts the economy. Add to that the global economic downturn which has hurt demand, and it adds up to big problems.
China needs to liberalize its economic policies, crack down on corruption, and allow more political freedom. But the leadership is too fearful, and will likely continue to clamp down even harder on everyone and everything, further damaging the Chinese economy and increasing political unrest. It is a downward spiral that I hope China can find a way out of. An unstable, weak China is not good for anyone.
And here you fail at economics. At some point people have all their demands already cowered, so unless you create something new that they would wish there is just no room for grow anymore. Of course there is natural grow along with population grow, but if population grow stagnates(especially of population with purchasing power), then your grow stagnates too. There is always limit for grow, as market and demand is limited too. If you grow faster then market, then you end up as Spain with a lot of empty buildings for that no demand ever existed.
So you are telling me that all the poor rural areas of China "have all of their demands covered"? Seriously ??? "No room for growth"? Sorry, but that is a ridiculous statement on its face.
Did you miss the part about purchasing power? They dont have it. You cannot just turn dirt poor regions into rich overnight. Artificial grow of such regions means big financial loses for states for long time. It will take a lot of year till they actually would bring money back in.
Ought Six, previous posters tried to make you understand magnitude to no avail. Growth is not just a game with numbers, its linked to tangible real world things. The more you grow the more difficult its is to grow, thats simple math and its true wether you are counting dollars or ploting the weight of kittens. Lets try a real tangible example: Land has a fixed carrying capacity and that limitation on growth is what prompted humans to organize as nation states to protect their resources. This is actual Economics 101: Resources grow geometrically and populations grow exponentially. Advocacy of an infinite planet is 15th economics and by now we all know (or most of us) that the world is finite. When population growth passes resources growth we get wars as the overpopulated resort to taking away the resources of the neighbours and China is already on that path.
The growth of China has been largely artificial and not really that much a product of their leaders and more a mix of our corrupted corporate types and inept politicians. We have allowed jobs and technology to be transfered to China in a scheme to hide unjustifiable profit margins on short sighted self defeating economic ventures. When you develop propietary technology there is no need to outsource as there is in fact NO COMPETION. The transder of everything to China to deflate our own economy had nothing to do with how awesome some may think China is or will be, it was an exploitation scheme ran from this side of the world. I don't know where you get your facts about life for chinese workers and profesionals but you should consider reading the many threads here in MP.net that shed some light about that. The party junta has been exploiting their people in as many ways as they can and it includes chipping away at their health. The state is the largest producer of cigars and chain smoking is not uncommon nor viewed as unacceptable, in a few years that will result in a health care crissis (may actually been started) as more and more people develop emphysema. There is not much creativity in China, the party junta can't allow it, they either copy or fake it. The UN is mostly silent about the fact that up to 70% of medicines in Africa are "asian" fakes and are not willing to point a finger to the obvious source. China is dangerously overpopulated and most of the land is desert. They are eating almost everything in their forests and that is taking them closer by the day into passing a biological barrier that will unleash the next epidemic (this is how we get Ebola outbreaks). When that happens they will blame it on a biological attack from a neighbour (they did with SARS). The list goes on and on. I don't know what comes to your mind when you say a strong China is a good thing for everyone but their party junta seems to see a strong China just as military power that can eat their neighbours.
The dreams of the great enlightened China come from a book named "The pacific century" but most of the fans of that book seem to miss the fact its all about the 20th century and as ususal the predictions do not match our reality.
I understand economic growth and its limits quite well, thank you. America grew and continued to expand because it had huge rural areas to develop that presented great opportunities. The government helped some, and hindered some, but governments are not the source of growth. The people are. That is what you and Nyusu appear not to understand. Entrepreneurs invest their own capital, and inventors come up with new ideas that lead to new products that open whole new and previously unknown markets. Regular people start businesses, and if corrupt officials do not crush them and entrenched cronies of the powerful do not use the police to harass them, some of those businesses to succeed and create more wealth. A free market is the fertile soil that allows growth to occur. There are plenty of rich investors, innovators and future small business owners in China that could do a lot to exploit the potential in the rural regions if the entrenched corrupt bureaucracy could be made to get the hell out of the way. That is China's biggest challenge.
Will your economics include the diferrences between greed and need in the future?
It is estimated that corruption takes up to 10-16% of China's GDP.Will your economics include the diferrences between greed and need in the future?
Police, judges, cadres, board of directors, and state owned industrial bosses are members of the same Communist Party.
There is something wrong with a single party system with no checks and balances.
O6, entrepeneurs can not pull resources out of their posteriors. You still proclaim yourself an expert in econoimic and yet fail to understand that in the end it all has to be tied to tangible things. Also you seem to have a very simplistic view of american history and develoment on the line of Glen Beck.
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