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Compare the Chinese household savings rate to the American one, and I think you'll find people in the US do indeed spend frivolously. Note that living in HCOL l

Compare the Chinese household savings rate to the American one, and I think you'll find people in the US do indeed spend frivolously. Note that living in HCOL locations beyond your means is still spending frivolously. You don't have a right to live in NYC or SF. If more people realized that, then supply of low wage workers would drop in these places and wages would go up.

toomuchtodo 4y ago
The Chinese public have invested in quicksand represented as a low quality housing stock pyramid scheme the CCP is barely holding together with control economy duct tape. Perhaps domestic consumption is lower than the US is due to this higher savings rate, but lets not pretend that savings is going into productive enterprises. With China aging very rapidly and a total fertility rate that will decline below 1 in the next 2-5 years, doesn’t make much sense to save for a future with limited returns (time value of life vs money and so forth). https://archive.ph/2022.05.23-232226/https://www.bloomberg.com/news/articles/2022-05-23/china-s-16-3-trillion-cash-hoard-shows-deepening-household-gloom https://archive.ph/2022.05.23-232226/https://www.bloomberg.c... > Home prices in China have been falling since September, Chinese stocks and mutual funds aren’t great bets these days either, there’s little access to international markets and cryptocurrencies are officially illegal. Instead, people are increasingly shelving their money in savings accounts, despite benchmark deposit rates staying at record low levels. > “No matter if you’re high net-worth or not that rich, the golden time of parking your money and letting your wealth grow, it’s gone,” said Wei He, an economist at Gavekal Research Ltd. in Beijing. > “There’s no other investment options,” said Clawde Yin, a 45-year-old Shanghai resident. “I’ve got no choice but to wait and see.”
- ceeplusplus 4y ago
  Chinese savings are dumped into housing because the stock market isn't trustworthy there, not because everyone decided housing is the most productive enterprise. Also, dumping your money into savings accounts is definitely better than dumping it into 30% APR BNPL offers for designer clothing and electronics. Or gas guzzling, expensive SUVs and trucks. Ask yourself why Apple has a 50% market share in the US. > doesn’t make much sense to save for a future with limited returns (time value of life vs money and so forth). Saving doesn't mean saving until retirement, it just means not spending beyond your means.
  - iroh2727 4y ago
    Well, saving is a virtue in itself (a virtue that most Americans don’t have I agree). But it’s really a separate issue. Suppose all Americans suddenly started saving 10% of their income. That would just establish a new standard of living, a new equilibrium. The point is, though, that the population level class structure and socioeconomic mobility/opportunity would remain. As would the fact that the current generation cannot (as a whole) afford housing the way two generations ago could. The narrative of “the individual” encourages non-elites to compete amongst themselves for a progressively shrinking portion of the pie. From the perspective of elites it has a twofold benefit: discourage worker solidarity and encourage productivity. From the perspective of workers, the latter benefit is good (we all should strive for competence and contribution), but the former is not good (even just in terms of life enjoyment). Also, at some point the pie needs a drastic and more balanced reallocation.

toomuchtodo 4y ago

The Chinese public have invested in quicksand represented as a low quality housing stock pyramid scheme the CCP is barely holding together with control economy duct tape. Perhaps domestic consumption is lower than the US is due to this higher savings rate, but lets not pretend that savings is going into productive enterprises. With China aging very rapidly and a total fertility rate that will decline below 1 in the next 2-5 years, doesn’t make much sense to save for a future with limited returns (time value of life vs money and so forth). https://archive.ph/2022.05.23-232226/https://www.bloomberg.com/news/articles/2022-05-23/china-s-16-3-trillion-cash-hoard-shows-deepening-household-gloom https://archive.ph/2022.05.23-232226/https://www.bloomberg.c... > Home prices in China have been falling since September, Chinese stocks and mutual funds aren’t great bets these days either, there’s little access to international markets and cryptocurrencies are officially illegal. Instead, people are increasingly shelving their money in savings accounts, despite benchmark deposit rates staying at record low levels. > “No matter if you’re high net-worth or not that rich, the golden time of parking your money and letting your wealth grow, it’s gone,” said Wei He, an economist at Gavekal Research Ltd. in Beijing. > “There’s no other investment options,” said Clawde Yin, a 45-year-old Shanghai resident. “I’ve got no choice but to wait and see.”

ceeplusplus 4y ago
Chinese savings are dumped into housing because the stock market isn't trustworthy there, not because everyone decided housing is the most productive enterprise. Also, dumping your money into savings accounts is definitely better than dumping it into 30% APR BNPL offers for designer clothing and electronics. Or gas guzzling, expensive SUVs and trucks. Ask yourself why Apple has a 50% market share in the US. > doesn’t make much sense to save for a future with limited returns (time value of life vs money and so forth). Saving doesn't mean saving until retirement, it just means not spending beyond your means.
- iroh2727 4y ago
  Well, saving is a virtue in itself (a virtue that most Americans don’t have I agree). But it’s really a separate issue. Suppose all Americans suddenly started saving 10% of their income. That would just establish a new standard of living, a new equilibrium. The point is, though, that the population level class structure and socioeconomic mobility/opportunity would remain. As would the fact that the current generation cannot (as a whole) afford housing the way two generations ago could. The narrative of “the individual” encourages non-elites to compete amongst themselves for a progressively shrinking portion of the pie. From the perspective of elites it has a twofold benefit: discourage worker solidarity and encourage productivity. From the perspective of workers, the latter benefit is good (we all should strive for competence and contribution), but the former is not good (even just in terms of life enjoyment). Also, at some point the pie needs a drastic and more balanced reallocation.