3 ms·

My guess would be that nothing serious would happen, because China has a government that can effectively implement whatever policy they want without caring too

My guess would be that nothing serious would happen, because China has a government that can effectively implement whatever policy they want without caring too much about public opinion and they still have all the production facilities and cheap workforce, which wont suddenly go away because of a housing bubble. What destroyed the US industries (apart from high tech) wasn't the housing bubble or the oil prices. It was the high price for labor. Also, the reason why the housing bubble in the US caused so much trouble is that the US imports more than it exports. We have the exact opposite situation in China, where far more products are exported than imported, so destruction of wealth in China isn't going to hit their economy nearly as much as it did hurt the US/EU. Labor prices might even go down as a result, which will make them even more competitive.

crdoconnor 12y ago
>What destroyed the US industries (apart from high tech) wasn't the housing bubble or the oil prices. It was the high price for labor. No, it was the high price of the dollar.
- DominikR 12y ago
  You do realize that it doesn't matter for an importer of US goods if the high prices for US products are a result of high labor price or high dollar price. The importer just sees that the same product produced in the US is far more expensive than somewhere else.
  - crdoconnor 12y ago
    >You do realize that it doesn't matter for an importer of US goods if the high prices for US products are a result of high labor price or high dollar price. No. I never said it did matter to them. It DOESN'T matter to them. It matters to us!!! The US already has way too much downward pressure on wages - causing MASSIVE income inequality, huge private debt overhang and anemic demand. More downward pressure will simply cause half the country to drop into poverty. What it DOESN'T have is enough downward pressure on the dollar - causing exports to become more competitive and industry to start coming back, bringing jobs with them.
    - DominikR 12y ago
      My point was about the decline of US industries, not about the income of workers. What matters here is the price of the produced products and you're at a disadvantage in a global economy when the prices are too high. I suspect that either option (reducing wages or value of the dollar) would reduce buying power of US citizens since US has to import so many goods thus creating downward pressure no matter which option you choose. Anyways, I agree that those problems have to be solved but I'm quite sure that the current consumption level is unsustainable and that this will change in the future in some way or another. Same goes for the EU. (where I live) I just hope that this will happen in a peaceful way.
      - seanmcdirmid 12y ago
        The US still exports a lot, and is a leader in services and knowledge. Sure, china produces iPhones, but all the R&D is done in California. Heck, even the natural resources consumed for our imports aren't coming from labor rich manufacturing countries, but from places like Australia. Technology can change a lot. Our rate of food consumption was considered unsustainable until the green revolution. We were supposed to run out of oil 20 years ago, and we are getting better about recycling. It doesn't have to become a distopia, though it could.
        crdoconnor 12y ago
        >The US still exports a lot, and is a leader in services and knowledge. Sure, china produces iPhones, but all the R&D is done in California. Unfortunately that R&D created maybe 30,000 jobs. This is an economy of 300 million people, so that's good jobs for 0.001% of the population. What about the other 99.999%?
        seanmcdirmid 12y ago
        http://www.npr.org/blogs/money/2012/03/20/149015363/what-america-does-for-work http://www.npr.org/blogs/money/2012/03/20/149015363/what-ame...
      - 12y ago

crdoconnor 12y ago

>What destroyed the US industries (apart from high tech) wasn't the housing bubble or the oil prices. It was the high price for labor. No, it was the high price of the dollar.

DominikR 12y ago
You do realize that it doesn't matter for an importer of US goods if the high prices for US products are a result of high labor price or high dollar price. The importer just sees that the same product produced in the US is far more expensive than somewhere else.
- crdoconnor 12y ago
  >You do realize that it doesn't matter for an importer of US goods if the high prices for US products are a result of high labor price or high dollar price. No. I never said it did matter to them. It DOESN'T matter to them. It matters to us!!! The US already has way too much downward pressure on wages - causing MASSIVE income inequality, huge private debt overhang and anemic demand. More downward pressure will simply cause half the country to drop into poverty. What it DOESN'T have is enough downward pressure on the dollar - causing exports to become more competitive and industry to start coming back, bringing jobs with them.
  - DominikR 12y ago
    My point was about the decline of US industries, not about the income of workers. What matters here is the price of the produced products and you're at a disadvantage in a global economy when the prices are too high. I suspect that either option (reducing wages or value of the dollar) would reduce buying power of US citizens since US has to import so many goods thus creating downward pressure no matter which option you choose. Anyways, I agree that those problems have to be solved but I'm quite sure that the current consumption level is unsustainable and that this will change in the future in some way or another. Same goes for the EU. (where I live) I just hope that this will happen in a peaceful way.
    - seanmcdirmid 12y ago
      The US still exports a lot, and is a leader in services and knowledge. Sure, china produces iPhones, but all the R&D is done in California. Heck, even the natural resources consumed for our imports aren't coming from labor rich manufacturing countries, but from places like Australia. Technology can change a lot. Our rate of food consumption was considered unsustainable until the green revolution. We were supposed to run out of oil 20 years ago, and we are getting better about recycling. It doesn't have to become a distopia, though it could.
      - crdoconnor 12y ago
        >The US still exports a lot, and is a leader in services and knowledge. Sure, china produces iPhones, but all the R&D is done in California. Unfortunately that R&D created maybe 30,000 jobs. This is an economy of 300 million people, so that's good jobs for 0.001% of the population. What about the other 99.999%?
        seanmcdirmid 12y ago
        http://www.npr.org/blogs/money/2012/03/20/149015363/what-america-does-for-work http://www.npr.org/blogs/money/2012/03/20/149015363/what-ame...
    - 12y ago