China not reliant on western recovery

[llanlad2]

According to report linked to below.

The report is by HSBCs chief economist so obviously they are talking their book. Nevertheless claims that

• emerging markets leading the recovery
• growth of new orders is accelerating
• manufacturing exports shows largest gain for 5 years
• the growth has not been dependent on Western markets
• Chinese demand for commodities will keep prices relatively high. This will help support earnings of the producers thus allowing further "south-south" trade to develop.

Summary of report here

Actual report here

[Mega]

Re: China not reliant on western recovery

Oh what Peter Schiff said 4 years ago!
Mike

[touchring]

Re: China not reliant on western recovery

20% unemployed in the West means there are 80% that can consume Chinese goods.

[Down Under]

Re: China not reliant on western recovery

20% unemployed in the West means there are 80% that can consume Chinese goods.

But, in the US/UK, their ATM machine is broken.

[touchring]

Re: China not reliant on western recovery

But, in the US/UK, their ATM machine is broken.

The average Chinese urban worker earns about 2000 RMB a month, but still owns a notebook computer, a digital camera, and a few cellphones, among others. Suppose that the American minimum wage worker earns $8 an hour, this is 4.5 times more than the average Chinese worker. And we're comparing the minimum wage American worker with the average wage Chinese worker. The price of the cellphone and PC in China is not a lot different from the prices in the USA.

So as you can see no matter how broke the American consumer is, he still can afford Chinese gizmos without the need for credit. That's the beauty of the exchange rate.

With the American minimum wage worker earning 4.5 times of what the average Chinese worker earns, it will take more than just a serious recession to break the Chinese monopoly in American consumers goods.

[flintlock]

Re: China not reliant on western recovery

The average Chinese urban worker earns about 2000 RMB a month, but still owns a notebook computer, a digital camera, and a few cellphones, among others. Suppose that the American minimum wage worker earns $8 an hour, this is 4.5 times more than the average Chinese worker. And we're comparing the minimum wage American worker with the average wage Chinese worker. The price of the cellphone and PC in China is not a lot different from the prices in the USA.

So as you can see no matter how broke the American consumer is, he still can afford Chinese gizmos without the need for credit. That's the beauty of the exchange rate.

With the American minimum wage worker earning 4.5 times of what the average Chinese worker earns, it will take more than just a serious recession to break the Chinese monopoly in American consumers goods.

I agree. The products China sells to the US are still relatively cheap items. Virtually every "poor" person in America still has a cell phone. Many live in a home full of light fixtures made in China. Quite a few will have a Chinese made electronic of some sort laying around. If they were exporting expensive luxury items it might be a different story.