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And set to grow and grow as they become more able to afford cars.
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What will happen is that the free economies of China and South East Asia will expand rapidly and the expense of restriced, Eurocratic economies such as ours and, while they will be able to afford new cars, we will not.
HJ
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Perhaps instead of wasting our time with French we'd all be better off learning Chinese then HJ :)
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What will happen is that the free economies of China and South East Asia will expand rapidly and the expense of restriced, Eurocratic economies such as ours and, while they will be able to afford new cars, we will not. HJ
LOL!, I would hardly describe the Chinese economy as 'free', also those of most of SE Asia are not particularly 'free' for that matter...
I undertook a three-week business trip to China last year, visiting automotive component makers in Beijing and Shanghai. It was interesting, but I was reminded that whilst a small percentage of the population may be able to buy cars, the vast majority still live in poverty of a magnitude unseen in Europe since before the Second World War. The majority of the population live as subsistance farmers, for the most part without electricity or running water. The idea of owning a car would be beyond their wildest dreams.
Working conditions in the industrialised regions are mostly appalling, and I for one am thankful of the 'Eurocratic' social and health & safety policies that we enjoy in Europe.
Speaking to the Chinese was facinating. Many business people we spoke to believe that the economy is overheating and sucking in too many imports. They are fearful of a crash. There are also fears of social instability. There is no free speech and unemployment is much higher than officially admitted. Apparently the state is shedding labour at such a rate that the economy needs to grow at 7% PA just to soak up this excess labour and keep unemployment constant. If there is an economic crash then there could be mass unemployment and widespread social unrest could follow.
Far from being a threat to the west, my impression is that an expanding China offers many opportunities. China imports a lot of high-value machinery and equipment from the West. Most of its exports are either relatively low value (but with high environmental costs) such as cheap kids toys, or higher value items where most of the profit component is stripped out by IPR licensed from Western companies (e.g. DVD players, computer parts, car parts). The profitability of most Chinese companies is actually rather poor; look at the prices of Chinese made power tools in places like B&Q and wonder how they make a profit at all.... There is worldwide overcapacity in all 'commodity' manufactured goods.
Most other SE Asian economies are not doing too well and had a bad 2003 - they are mostly running current-account deficits and only had growth because of the high level of capital investment in China. If that drops then it will take those economies down too.
Reports of the demise of the Euro economies are somewhat premature, I think. The main threat comes from the impact of Chinese growth on energy and raw material prices - but that's something that will hit everybody, including the Chinese themselves.
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In the 80s, there was lots of speculation that the Japanese would take over the world. Now, we still buy their cars, but the Japanese car-companies aren't all Japanese-owned: Japan is effectively an ailing part of the western economy rather than a threat to it.
Japan's economy was eventually undone by its broken political system: a corrupt dominant party which screwed up the economy big time.
China's so-called "market Leninism" works fine, up to a point: providing cheap labour for foreign companies is easy enough when political expression is non-existent. But without some freedom, China will start to hit a lot of the problems encountered by other developing nations... and if there is enough freedom, the Chinese are unlikely to continue to support the atrocious working conditions which are its current USP.
By contrast, Germany (with its expensive but effective social protecion) dominated European manufacturing until it had to pay the huge cost of absorbing the Eastern Lander, and still generates much of the inteelectual capital for manufacturing. It may no longer be a global leader on some indicators, but if German cars are anything to go by, it's going to remain a strong player for a long time to come.
The resource crunch is going to happen wherever the economic growth occurs: growth in global energy use far outstrips supply growth, and there are crises looming for other commodities. The motor industry will be hit particularly hard because it's so resource-intensive. The west's ability to survive some of the coming shocks depends in part on its ability to reduce its resource dependence, and progress in that area is depressingly slow ... not least because western consumers vigorously resist measures to encourage lower resource usage.
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Maybe we should stop buying all our consumer goods (except cars) from China and support other economies? Perhaps our own.
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There are several key differences here between Europe and China - the first is that China's economy is expanding every rapidly, unlike any in the West, let alone Europe. Secondly IIRC there are about 1,500,000,000 people in China - several times that of Europe and the USA combined. Thirldy, they don't appear to have any real commitment to tackling environmental issues whatsoever. Finally, their government isn't renowned for doing what it's told by others. When added to the 1,000,000 people in India who appear to be following close behind, I think we're all in for a hard time so enjoy the 'Good Times' while you can :(
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>Thirldy, they don't appear to have any real commitment to tackling environmental issues whatsoever.
As opposed to the "leading-edge" USA action plan?
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Well we all know about the USA ONW but Europe at least tries to be a bit more enviro-friendly when it comes to cars and other things.
Tend to agree with Growler, HJ and RF (?) about the future balance of economic power. We've all grown complacent in this part of the world and having hosted and come to know a number of Chinese students over the last couple of years I can testify to the fact that they're singleminded and extremely hardworking! Something's got to give and it's
probably going to be us.
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