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China is taking all the massive cash it is making now because there is no other really big and cheap factory, and sticking it into infrastructure. Buildings, ro

China is taking all the massive cash it is making now because there is no other really big and cheap factory, and sticking it into infrastructure. Buildings, roads, subways, minority villages - all of that is being built up. Even if you have a crash, a built road is still there and a built office still exists. Pudong is empty because the offices are expensive and it's not really in town - if a crash happens that forces the government to reconsider whom they want to target pudong at, then there will be enough people moving in there when the prices are right. China is not developed, it's developing. It's not borrowing from the future - the U.S is borrowing from the future and giving it to china. China is taking the money and building infrastructure. Property is not expensive in china. There is no excessive inflation or speculation. China has the typical bubble of any rapidly growing economy, but the huge internal market, massive infrastructure development, and large population of highly educated people, and the introduction of chinese businessmen to secondary markets in Africa and South America mean that the fundamentals of the chinese economy are fine. If there is any bubble, it will blow over and growth will continue.

ohashi 17y ago
Infrastructure for infrastructure's sake? If it crashes and forces the government to re-think things, you think this happens instantly? That crash is figuring things out and filling up the excess capacity.
- jacquesm 17y ago
  Better to spend it on roads than on cheap Chinese merchandise.
  - houseabsolute 17y ago
    I happen to like cheap chinese merchandise. I'd rather pay $1500 for a Macbook Pro manufactured there than $2000 for one manufactured here.
    - jacquesm 17y ago
      Long term that's a losing strategy. It means you are willing to export all your production facilities to another country, creating a massive trade-imbalance in the process. Think about how strange it is that not just your macbook, but almost everything you can buy has been manufactured on the other side of the planet, can be transported, imported and still be sold cheaper than you could produce it locally. It's a bit like selling your birthright. Also, don't forget that those workers abroad are usually working in circumstances that local authorities would not tolerate. A nice bit of backstory about moving production to China. A few years ago, rubbermaid was forced to raise its prices because of the developments on the raw materials market. Wall-mart refused to accept the rise, dropped the rubbermaid product line, rubbermaid filed for bankruptcy, and then the whole production was moved to China and wall-mart signed a distribution deal with the new owners of the moulds.
      - houseabsolute 17y ago
        No, all it means I'd prefer Chinese people to do what they're good at, and Americans do what they're good at. If we can't manufacture cost-effectively in this country, then it's fine for it to happen somewhere else. I don't view manufacturing plants as a birthright.
        jacquesm 17y ago
        Manufacturing cost effectively and manufacturing cost effectively while maintaining workplace safety, paying a living wage and respecting the environment are two different things, and it is the latter that you are comparing with the former. So the only reason why you can buy that stuff manufactured in China cheaper is because of a combination of lack of respect for human beings, sloppy environmental controls and unsafe work place practices. If those were brought up to the same standards that are held in the developed countries the prices would be roughly the same after import duties and transportation costs are figured in.
        houseabsolute 17y ago
houseabsolute 17y ago
> built road is still there and a built office still exists You could equally well say this of a house foreclosed on by a bank in the U.S. during the housing crisis. But do you really have any doubt that such houses lying fallow and the resources that go into reselling them are both economic losses? The same will be and is true of the empty offices and untravelled roads in China.

ohashi 17y ago

Infrastructure for infrastructure's sake? If it crashes and forces the government to re-think things, you think this happens instantly? That crash is figuring things out and filling up the excess capacity.

jacquesm 17y ago
Better to spend it on roads than on cheap Chinese merchandise.
- houseabsolute 17y ago
  I happen to like cheap chinese merchandise. I'd rather pay $1500 for a Macbook Pro manufactured there than $2000 for one manufactured here.
  - jacquesm 17y ago
    Long term that's a losing strategy. It means you are willing to export all your production facilities to another country, creating a massive trade-imbalance in the process. Think about how strange it is that not just your macbook, but almost everything you can buy has been manufactured on the other side of the planet, can be transported, imported and still be sold cheaper than you could produce it locally. It's a bit like selling your birthright. Also, don't forget that those workers abroad are usually working in circumstances that local authorities would not tolerate. A nice bit of backstory about moving production to China. A few years ago, rubbermaid was forced to raise its prices because of the developments on the raw materials market. Wall-mart refused to accept the rise, dropped the rubbermaid product line, rubbermaid filed for bankruptcy, and then the whole production was moved to China and wall-mart signed a distribution deal with the new owners of the moulds.
    - houseabsolute 17y ago
      No, all it means I'd prefer Chinese people to do what they're good at, and Americans do what they're good at. If we can't manufacture cost-effectively in this country, then it's fine for it to happen somewhere else. I don't view manufacturing plants as a birthright.
      - jacquesm 17y ago
        Manufacturing cost effectively and manufacturing cost effectively while maintaining workplace safety, paying a living wage and respecting the environment are two different things, and it is the latter that you are comparing with the former. So the only reason why you can buy that stuff manufactured in China cheaper is because of a combination of lack of respect for human beings, sloppy environmental controls and unsafe work place practices. If those were brought up to the same standards that are held in the developed countries the prices would be roughly the same after import duties and transportation costs are figured in.
        houseabsolute 17y ago

houseabsolute 17y ago

> built road is still there and a built office still exists You could equally well say this of a house foreclosed on by a bank in the U.S. during the housing crisis. But do you really have any doubt that such houses lying fallow and the resources that go into reselling them are both economic losses? The same will be and is true of the empty offices and untravelled roads in China.