
China's booming middle class is creating world's most dynamic consumer market - digisth
http://www.economist.com/news/special-report/21663328-booming-middle-class-creating-worlds-most-dynamic-consumer-market-wild-wild?fsrc=scn/tw/te/pe/ed/thewildwildeast
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sharetea
Anne Stevenson-Yang, a journalist and software executive who's worked and
lived in China since 1985, and now a research director at an investment
capital firm, has this to say about China's GDP: "actual Chinese GDP is
probably a third lower than is officially reported"

[http://www.barrons.com/articles/anne-stevenson-yang-why-
xi-j...](http://www.barrons.com/articles/anne-stevenson-yang-why-xi-jinpings-
troubles-and-chinas-could-get-worse-1417846773)

"China is sinking into a deflationary recession that’s increasing in speed and
may take some time to run its course. Investors have lost faith in the
property market, which alone comprises about 20% of GDP, when taking into
account the entire supply chain, from iron-ore production to construction to
related financial services and appliance sales. Employment and wage
compensation will suffer. Consumption will continue to suffer. There’s even an
outside possibility that China’s economic miracle could end up in a fiery
crash landing, if a surge in banking-system loan defaults outruns government
regulators’ attempt to contain such a credit crisis and restore financial
confidence."

She has a good video about China's economy here:
[https://www.youtube.com/watch?v=C2SStFt-
k_A](https://www.youtube.com/watch?v=C2SStFt-k_A)

~~~
6t6t6
Maybe the article represents a bit of wishful thinking; but the fact that this
is the most up-voted comment is also quite revealing.

~~~
chvid
Why the strong anti-China sentiment on HN? I don't get it.

~~~
mahranch
" _Why the strong anti-China sentiment on HN? I don 't get it._

That's quite odd, I notice the opposite. I notice many pro China pieces here
on hackernews. Whether it's talking about their green energy, growing economy,
financial markets or what have you.

Perhaps you've fallen victim to what's known as hostile media effect?
([https://en.wikipedia.org/wiki/Hostile_media_effect](https://en.wikipedia.org/wiki/Hostile_media_effect))

It says that you tend to notice more negative media & chatter about something
you care about or have an interest in, regardless of reality.

And I think this might actually be the case here because the original
commentor above wasn't "anti-China" at all. He was stating a contrary
viewpoint. Being realistic doesn't mean something is automatically "anti". If
there was an article about the U.S middle class growing this year, and someone
posted a comment which disputed that, it wouldn't be an "Anti-American"
comment.

Speaking of, I see more "what's with the anti-China comments?" more than I
notice _actual_ anti-China comments. In fact, I almost never see truly anti-
China comments.

~~~
sanxiyn
Being realistic is different from being contrary, which in turn is different
from being a conspiracy theorist. Personally, I consider "Chinese government
is fabricating economic statistics" a conspiracy theory territory.

You have a point that being mistaken is different from being hostile or anti,
but we do call people "anti-vaccine" when they are just mistaken and as a
result genuinely worried about vaccine. I think one should interpret "anti-
China" the same way.

~~~
sharetea
[http://www.wsj.com/articles/wsj-survey-chinas-growth-
stateme...](http://www.wsj.com/articles/wsj-survey-chinas-growth-statements-
make-u-s-economists-skeptical-1441980001)

"More than 96% of respondents to the latest Wall Street Journal survey of 64
economists–not all of whom answered every question–said China’s gross-
domestic-product estimates don’t accurately reflect the state of the world’s
second-biggest economy.

“Official data are manufactured to fit the government’s narrative,” said
Stephen Stanley, chief economist at Amherst Pierpont Securities."

~~~
tonyedgecombe
Which is exactly what you would expect in a communist regime with a neutered
press.

~~~
avn2109
That's what I'd expect from any middling-to-competent regime, not just the
commies (though they of course do it too). For example, the Argentines are
famous for making up exchange rates, and my own (American) government has a
policy of systematically misreporting inflation and unemployment.

------
paulsutter
Everybody wants to have a binary outcome for China: China, is it an all
dominating inevitability? Or a massive fustercluck? A or B!

And that's silly. China will grow tremendously over the next 30 years, and
that growth will be filled with turmoil, booms and busts. Things are only
black and white in comic books.

~~~
sharetea
Or it could be like Japan and stagnate over the next 30 years, due to its
similarity to Japan in demographics, exporting country's inability to
transform to a consumer economy, massive internal debt, capital flight, etc.

~~~
paulsutter
China and Japan are about as different and opposite as two places can be (I've
spent time in Asia). Their both very unique places in completely opposite
ways. The differences are countless and I struggle to find even minor
similarities.

~~~
sharetea
I have lived in both. Cultural differences are not economic differences.

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metaphorical
If its economy won't hit a hard-landing and the current reform is successful,
then yes I think China will have a booming middle class by 2020.

But does the emperor have clothes on? No one can really say for sure.

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pmontra
I was there on vacation one month ago and I have no trouble believing this
article. The number of tourists paying European level entry fees to museums,
parks and attractions is just too big (incredibly long lines everywhere, very
few people from outside China). By comparison food is about 3 times as cheap
as in western Europe and goods are as cheap as one expects from China.

Still, and I know this is not the point of the article, they are too many to
live well, no matter how rich they become. Life there is a sequence of long
lines. Three weeks there have reset my baseline for many things. When I came
back home (Milan, Italy) I was surprised by how silent and desert it is and by
how much sky I could see. Hardly the feelings one usually has when getting
here.

~~~
gregpilling
for months after returning from China I marveled at the empty sidewalks in
Arizona where I live. I understand totally what you are saying. China is a
fascinating place.

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simple123
It seems to me the article written by a Lobbyists of CCP before Xi's visit

~~~
eva1984
Or it could be just telling the truth.

~~~
tmgcd
Telling the truth?

Until Aug,2015 about 276 lawyers who help Chinese people protecting their
human right have been arrested. But China still claim it is a country under
the rule of law.

Another example is that recently an official media of China claim that China
is the most democratic country in the world.

CCP is evil, never trust it!!!!!

~~~
superuser2
From where do you get the ridiculous claim that human rights and the rule of
law are preconditions for economic prosperity? There are many unfree yet rich
countries, i.e. Singapore.

~~~
PakG1
This question was answered years ago by the magna carta. Without rule of law,
you get corruption and a dissatisfied population. Then you get economic
stagnation and suffering by the masses. Finally, you get the French
Revolution, the various Communist revolutions, and so on.

Rule of law is necessary for economic prosperity because without rule of law,
entrepreneurs cannot confidently engage in economic activity without fearing
that their property rights will be trampled and the wealth they generate will
be taken away by an arbitrarily deciding government. Why should someone take
so much risk and then be punished for their success? Without rule of law,
there can be a temporary party for a few decades, but the party stops when the
government starts getting out of hand and abuses its power. This is why Xi
Jiping is making stamping out corruption one of his top public priorities,
more so than any previous Chinese leader in modern history. He is also on
record that he wants China to move forward to have proper rule of law.

I dislike it when people bring up Singapore as an example. Singapore is so
small that it's really easy to manage compared to a large country with a large
population. And besides that, Singapore doesn't have poor quality rule of law
compared to other countries (yet).

edit: I get the impression that you equate rule of law with democracy. But you
didn't actually say that, so please confirm for me whether or not that's what
you really think. Rule of law is something else entirely:
[https://en.wikipedia.org/wiki/Rule_of_law](https://en.wikipedia.org/wiki/Rule_of_law)

~~~
hga
_This is why Xi Jiping is making stamping out corruption one of his top public
priorities, more so than any previous Chinese leader in modern history._

And/or this campaign is destroying rivals to his power....

 _He is also on record that he wants China to move forward to have proper rule
of law._

And if so, we'd better hope he's a 2nd Lee Kuan Yew. Except as you note, the
scales don't even vaguely match, trying to effect such a policy change without
well neigh unimaginable reforms all the way down to the local level strikes me
as equally unimaginable.

One of the reasons to equate the rule of law with "democracy" is checking the
power of local potentates; hard to see how a huge, all powerful state like the
PRC can do that from the top down.

~~~
PakG1
Yes, definitions and platitudes aside, feasibility is a completely different
matter. It would be interesting to see whether the PRC really can implement
proper rule of law from the top down, and it is quite possibly not feasible.
That doesn't necessarily imply that the desire and effort are false.

Xi Bolai was an example of a campaign to destroy rivals to his power using the
claim of wanting to clean up corruption. He had goals to achieve not yet
achieved. Xi's already at the top. It would be very difficult to remove him
from power, given the way the Chinese government operates. It would be
tantamount to revolution. If revolution happens, I can't see it being because
power rivals plot it.

------
1971genocide
When I was young I remember the world used to be beholden to the demand of the
american consumer. What they wanted drove the export of entire economical
regions in Asia.

Now it seems the giant in the room that everyone needs to accommodate is the
Chinese consumer.

~~~
nickbauman
The world has been beholden to US consumer demand since the end of the Bretton
Woods system (which ended when Nixon unpegged the dollar from gold in 1973) up
until the collapse of the US center of gravity in 2008 (from which we haven't
really recovered). Prior to that it was the opposite: Demand came from the
periphery, and the US was the world's factory. Where we are now is uncharted
waters. US demand is required to fuel the Global Surplus Recycling Mechanism.
With its absence, China does not have enough domestic demand to replace the US
and does not have enough power to start its own GSRM.

~~~
1971genocide
Is that you ? Is it the former greek finance minister ?

------
nickbauman
I read in Yanis Verofakis last book that Chinese consumer demand has been
falling off since 2012 or so. I can't find good data on this out there though.

------
n00b101
What is the potential for enterprise software in China?

~~~
shiftpgdn
Having your software stolen after they request a 30 day trial.

~~~
tsotha
That's the Far East for ya. We gave a Korean company a 30-day evaluation copy
of our software in the early '90s. They decided not to purchase, and a few
years later we dropped the product entirely.

In 1999 someone from the Korean company called up and asked if we could
certify our software to be Y2K compliant.

~~~
wingerlang
Was there no killswitch after the 30 days? Is that not common in these
"company trials"?

~~~
tsotha
Oddly, no. We're not a software company, and we don't normally sell our
software. It's developed for in-house use. One of the managers thought this
particular application would be pretty lucrative if we sold it overseas (our
customers are all in the US), so he got permission to do so. But we really
didn't know what we were doing, i.e. we had a useful application with
thousands of internal customers, but on the business side we were making it
all up as we went along.

In the end the product was dropped because there's a lot of effort that goes
into making an application a product you can sell to other companies, and we
would have had to grow our organization more than the higher-ups wanted to
grow it. Things like fancier interfaces, license enforcement, documentation,
packaging, 24 hour support, etc.

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jeremonda
The fact that China's booming middle class is creating world's most dynamics
consumer market, is why we need ethics in creating dynamic consumer market.

------
LiweiZ
Driven by paper money boom.

