Comments on: China: formerly the world’s factory, now a nation of consumers… http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/ for students and teachers of Economics Wed, 08 Feb 2012 23:39:55 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Janne and ROb http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-10580 Janne and ROb Mon, 19 Apr 2010 17:15:13 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-10580 The Increase in spending of the Chinese and the shift of exports being the main component of China's GDP to investment is a relief for American consumers and factory workers. As America's reccesion goes on China could be the answer to help America get out and start the growth of the economy once more. The increase in consumption of the chinese will increase exports for the US which is good for America. This is also good for China because the Chinese are now getting access to more goods and services which improves their quality of life. The Increase in spending of the Chinese and the shift of exports being the main component of China's GDP to investment is a relief for American consumers and factory workers. As America's reccesion goes on China could be the answer to help America get out and start the growth of the economy once more. The increase in consumption of the chinese will increase exports for the US which is good for America. This is also good for China because the Chinese are now getting access to more goods and services which improves their quality of life.

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]]> By: Laila http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-8941 Laila Mon, 09 Nov 2009 01:57:29 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-8941 I think that, even if China has losses in its exports and AD, it will keep on growing due to its potential. China has only just begun growing these past few years and has no plans in discontinuing its growth any time soon. Although it is the exports dragging AD down, we cannot forget another factor that influences AD greatly: consumption. So if consumption is increasing I believe that it will balance the fact that exports are decreasing. A growth in consumption will make the AD curve shift out signalizing a growth in GDP. Therefore, because of China's huge population and their increased demand for consumption, China will most probably keep growing at a steady rate. I think that, even if China has losses in its exports and AD, it will keep on growing due to its potential. China has only just begun growing these past few years and has no plans in discontinuing its growth any time soon. Although it is the exports dragging AD down, we cannot forget another factor that influences AD greatly: consumption. So if consumption is increasing I believe that it will balance the fact that exports are decreasing. A growth in consumption will make the AD curve shift out signalizing a growth in GDP. Therefore, because of China's huge population and their increased demand for consumption, China will most probably keep growing at a steady rate.

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]]> By: Virginia http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-8935 Virginia Sat, 07 Nov 2009 18:16:20 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-8935 I think that it is a good thing for China, that they do not depend so much on trade anymore. The reason for this, is that one never knows how the futur is, and if one will always have good trade partners in the world. Therefore, if most of the GDP growth comes from the country itself, then this is something good. As mentioned in the article it says that investement and consumption give the 'biggest slice' of the GDP in China. This means that the Chinese themselves, are the ones willing to invest in their own country, and they buy goods from their own country, probably because it is cheaper. Furthermore, in the article it mentions the decrease in the USD, which is a good thing for the country, because it can increase trade, jobs, etc. This is one of the topics, we just had on a test, and it also mentioned that it is only a positive aspect if the dollar depreciates. I think that it is a good thing for China, that they do not depend so much on trade anymore. The reason for this, is that one never knows how the futur is, and if one will always have good trade partners in the world. Therefore, if most of the GDP growth comes from the country itself, then this is something good. As mentioned in the article it says that investement and consumption give the 'biggest slice' of the GDP in China. This means that the Chinese themselves, are the ones willing to invest in their own country, and they buy goods from their own country, probably because it is cheaper. Furthermore, in the article it mentions the decrease in the USD, which is a good thing for the country, because it can increase trade, jobs, etc. This is one of the topics, we just had on a test, and it also mentioned that it is only a positive aspect if the dollar depreciates.

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]]> By: GDubois http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-8880 GDubois Mon, 02 Nov 2009 19:36:53 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-8880 That's some good insight to the Chinese perspective, Andrea. China is fundamentally successful in being the world producer because of its currency, which the government attempts to maintain quite low relative to the dollar, specifically. This, as we know, allows the US to produce and manufacture goods at a very competitive, low, price abroad which not many other economic centers can. Now, with the US recession, the dollar depreciates - this brings its value closer to that of the Chinese RMB. This recession brings higher demand for American goods, services, and especially capital which have become cheaper in relation to foreign currencies. Although the standards of living in the US can not exactly increase significantly due to these increased exports of goods as had occurred in China, aggregate demand will shift outwards (increase; net exports has increased) and unemployment will fall. Essentially, the US economy has benefited from losing its currency value. I think this is an interesting point as many students like me have believed that a stronger currency was always beneficial, and always the best situation to be in. This may be the case in some situations, but it is important to know that this isn't always the case. That's some good insight to the Chinese perspective, Andrea.

China is fundamentally successful in being the world producer because of its currency, which the government attempts to maintain quite low relative to the dollar, specifically. This, as we know, allows the US to produce and manufacture goods at a very competitive, low, price abroad which not many other economic centers can.

Now, with the US recession, the dollar depreciates – this brings its value closer to that of the Chinese RMB. This recession brings higher demand for American goods, services, and especially capital which have become cheaper in relation to foreign currencies. Although the standards of living in the US can not exactly increase significantly due to these increased exports of goods as had occurred in China, aggregate demand will shift outwards (increase; net exports has increased) and unemployment will fall.

Essentially, the US economy has benefited from losing its currency value.

I think this is an interesting point as many students like me have believed that a stronger currency was always beneficial, and always the best situation to be in. This may be the case in some situations, but it is important to know that this isn't always the case.

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]]> By: Aeggli http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-8867 Aeggli Sat, 31 Oct 2009 19:34:49 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-8867 The US recession will assist China to improve their domestic firms and therefore, it will help China to improve the living standards of their own people. Since the US no longer is financially able to buy as much goods form China, demand for the Chinese products decrease. This means that China has to find another solution to sell their products. One solution could be to motivate the people in China to buy more domestic products. However, since many people in China have a very low income, the government would have to make sure that the people have enough income to buy the domesic products. Once they have a better income they are able to buy domestic products and rise their living standards. This also means that domestic firms are better off and are therefore safe although the Americans stopped buying their products. Like this China learns to become independent form the spending of other nations. The US recession will assist China to improve their domestic firms and therefore, it will help China to improve the living standards of their own people. Since the US no longer is financially able to buy as much goods form China, demand for the Chinese products decrease. This means that China has to find another solution to sell their products. One solution could be to motivate the people in China to buy more domestic products. However, since many people in China have a very low income, the government would have to make sure that the people have enough income to buy the domesic products. Once they have a better income they are able to buy domestic products and rise their living standards. This also means that domestic firms are better off and are therefore safe although the Americans stopped buying their products. Like this China learns to become independent form the spending of other nations.

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]]> By: maddi D http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-7157 maddi D Mon, 15 Dec 2008 22:43:03 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-7157 I found it very interesting how in the article, it is stated that the chinese economy is more domestic-consumption orientated rather than fueled by exports. You always here of china as a nation who's citizens consume little, but who's trading partners consume much of it's goods. I think its great to hear the chinese are beginning to enjoy the domestically produced goods that are avaliable to them, which of course signifies an increase in living conditions and wages to chinese. This shift of produced goods being sold to domestic consumers now is obviously a positive development for the chinese, who, what with the new domestic consumption, should not be hurt by the decrease in Americans buying their imports. I found it very interesting how in the article, it is stated that the chinese economy is more domestic-consumption orientated rather than fueled by exports. You always here of china as a nation who's citizens consume little, but who's trading partners consume much of it's goods. I think its great to hear the chinese are beginning to enjoy the domestically produced goods that are avaliable to them, which of course signifies an increase in living conditions and wages to chinese. This shift of produced goods being sold to domestic consumers now is obviously a positive development for the chinese, who, what with the new domestic consumption, should not be hurt by the decrease in Americans buying their imports.

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]]> By: Oliver http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-7154 Oliver Mon, 15 Dec 2008 22:21:42 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-7154 I agree with Gabriel, China has moved from producer cuntry to a consumer country. Dont get me wrong China still produces a ton of finished goods tha they export all over the world, but as the standards of life in China increase the demand to consumer goods from overseas increases. I agree with Gabriel, China has moved from producer cuntry to a consumer country. Dont get me wrong China still produces a ton of finished goods tha they export all over the world, but as the standards of life in China increase the demand to consumer goods from overseas increases.

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]]> By: Gabriel http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-5765 Gabriel Tue, 16 Sep 2008 05:20:22 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-5765 China used to be an exporting country and as the article says it has moved to a country of consumers. China used to make the products for everyone but now the Chinese, who have experienced an increase in the quality of life, are enjoyed the benefits of consuming. The fact that China used to depend on cheap labour meant that is was considered a less developed country, but now they are focusing on producing other more high tech products, like the lenovos we got in school. After Mao, China has not only opened up to other countries, but also to its own consumers. China used to be an exporting country and as the article says it has moved to a country of consumers. China used to make the products for everyone but now the Chinese, who have experienced an increase in the quality of life, are enjoyed the benefits of consuming. The fact that China used to depend on cheap labour meant that is was considered a less developed country, but now they are focusing on producing other more high tech products, like the lenovos we got in school. After Mao, China has not only opened up to other countries, but also to its own consumers.

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]]> By: TimChu http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-4504 TimChu Mon, 17 Mar 2008 19:26:33 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-4504 Personally, I don't mind that China is growing so fast. It's interesting to be able to live in a society that is growing so fast economically AND socially. Throughout my past 15 years in Shanghai, I've come to realize that not only has Shanghai changed physically (and in air quality) but it's people have changed along with it. I really hope that this growth will continue. Hopefully the inflation will subside...somehow and everyone will live happily ever after. or at least the Chinese will. Personally, I don't mind that China is growing so fast. It's interesting to be able to live in a society that is growing so fast economically AND socially. Throughout my past 15 years in Shanghai, I've come to realize that not only has Shanghai changed physically (and in air quality) but it's people have changed along with it. I really hope that this growth will continue. Hopefully the inflation will subside…somehow and everyone will live happily ever after. or at least the Chinese will.

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]]> By: James Tsao http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-4422 James Tsao Sun, 09 Mar 2008 21:07:40 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-4422 This trend of increasing domestic spending is evident in all growing economies. China cannot depend its economy on cheap labor and foreign demand forever because these are often characteristics of countries that are less developed. China's growing independence from relying on its exports to boost GDP is another sign that this country is acquiring a stronger market power globally. If this is the case, China would have acquired a stronger trading position due to its rising domestic demand This trend of increasing domestic spending is evident in all growing economies. China cannot depend its economy on cheap labor and foreign demand forever because these are often characteristics of countries that are less developed. China's growing independence from relying on its exports to boost GDP is another sign that this country is acquiring a stronger market power globally. If this is the case, China would have acquired a stronger trading position due to its rising domestic demand

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]]> By: jenniferchoi http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-4402 jenniferchoi Thu, 06 Mar 2008 05:08:46 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-4402 Before, China's GDP growth used to depend on the foreign export, but now as China's domestic consumer spending increases, China is experience even a greater GPD increase. As we learned in class this will make China's aggreate demand curve to shift to the right. Before, China's GDP growth used to depend on the foreign export, but now as China's domestic consumer spending increases, China is experience even a greater GPD increase. As we learned in class this will make China's aggreate demand curve to shift to the right.

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]]> By: julie.lin http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-4359 julie.lin Sun, 02 Mar 2008 20:49:57 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-4359 with increase in consumption of chinese goods, this may help boost china's economy because this is one of the big factors that could affect the GDP. i have to agree and disagree with what serenatu says, china is actually developing very quickly, and yes, cheap labour is an advantage in china, and is helping firms who employ these cheap labourers to increase profit, by a lot more than, say, US with expensive labours. with increase in consumption of chinese goods, this may help boost china's economy because this is one of the big factors that could affect the GDP. i have to agree and disagree with what serenatu says, china is actually developing very quickly, and yes, cheap labour is an advantage in china, and is helping firms who employ these cheap labourers to increase profit, by a lot more than, say, US with expensive labours.

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]]> By: serenatu http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-4351 serenatu Sun, 02 Mar 2008 19:55:00 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-4351 Just like what the article has mentioned, China's domestic goods is a big component to China's rising GDP, and the consumption on the domestic goods will keep increasing China's real GDP. China is slowly developing right now, the wages and rent of factory has definitely gone up. Some business are not willing to raise wages for labors because then they won't get as much profit. Just like Kevin said, those business might start relocaing their factories and stuff to somewhere that they can get cheap labors. Just like what the article has mentioned, China's domestic goods is a big component to China's rising GDP, and the consumption on the domestic goods will keep increasing China's real GDP.

China is slowly developing right now, the wages and rent of factory has definitely gone up. Some business are not willing to raise wages for labors because then they won't get as much profit. Just like Kevin said, those business might start relocaing their factories and stuff to somewhere that they can get cheap labors.

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]]> By: Jonathan Lau http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-4347 Jonathan Lau Sun, 02 Mar 2008 18:29:08 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-4347 Even though labor costs are rising in China, other aspects of the economy like real estate are booming. So even if some companies are looking for cheaper countries to produce their products, I don't think the overall real GDP will be affected that much. Other things like real estate and the rising value of the RMB will make up for it. In addition, since more people in China are becoming wealthier, China's own domestic consumption will continue to increase its real GDP, as mentioned in the article. Even though labor costs are rising in China, other aspects of the economy like real estate are booming. So even if some companies are looking for cheaper countries to produce their products, I don't think the overall real GDP will be affected that much. Other things like real estate and the rising value of the RMB will make up for it. In addition, since more people in China are becoming wealthier, China's own domestic consumption will continue to increase its real GDP, as mentioned in the article.

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]]> By: kevinma http://welkerswikinomics.com/blog/2008/02/27/china-formerly-the-worlds-factory-now-a-nation-of-consumers/comment-page-1/#comment-4343 kevinma Sun, 02 Mar 2008 18:10:59 +0000 http://welkerswikinomics.com/blog/2008/02/25/china-formerly-the-worlds-factory-now-a-nation-of-consumers/#comment-4343 I agree with what Annie said about how China is about the "lose its place in the eyes of investors". I have heard many times that it is not cheap to live in China anymore, that the prices of everything are rising. The standard of living in China has definitely gotten a lot better since I arrived in China a while back. When wage rate rises and corporations don't receive as much profit, they tend to find and relocate to somewhere cheaper. That might hurt China because many people will lose their jobs and their skills would be kind of useless. I agree with what Annie said about how China is about the "lose its place in the eyes of investors". I have heard many times that it is not cheap to live in China anymore, that the prices of everything are rising. The standard of living in China has definitely gotten a lot better since I arrived in China a while back. When wage rate rises and corporations don't receive as much profit, they tend to find and relocate to somewhere cheaper. That might hurt China because many people will lose their jobs and their skills would be kind of useless.

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