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Forum Post: Chinese style economic development

Posted 5 years ago on June 14, 2012, 12:30 a.m. EST by arturo (3169) from Shanghai, Shanghai
This content is user submitted and not an official statement

Having been away from China for about three years, I was amazed by the economic development that has occurred since I've been gone. The entire neighborhoods made up of thirty story tall apartment complexes, with sleek wood and marble interiors were impressive, as are the similarly tasteful seven story shopping malls.

However, its the developments in public transportation that I appreciate the most. These includes the super modern subway routes that increasingly link all parts of the city, as well as the fast train routes between cities that literally distribute the wealth throughout China.

The mood of the people has improved as well. In the past, I frequently felt the resentment of the locals as I walked the streets of Guangzhou, but these days, people seem too happy with their own lives to feel much resentment for foreigners. The spirit of growth gets inside of you here, instilling feelings of optimism for the future.

I know there are still bad things that happen in China, but for the most part the good things are increasing and driving out the bad. This is the way we used to do it in America, public investments in infrastructure, supported by the development of manufacturing capacity to fill both public and private needs.

If we were to restart this process in America, first through Glass Steagall, followed by the establishment of a national banking system and a New Deal style recovery, we could dramatically reduce our trade deficit with China, by exporting to them the high tech goods they still need to develop their infrastructure in the many poor areas that still exist here. That was FDR's plan after WW2, which was ruined by Truman.

What are we waiting for? Let's start growing again!



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[-] 1 points by DKAtoday (33475) from Coon Rapids, MN 5 years ago

Visit any of the brand new Skyscraper Ghost towns? You know those new cities that no one there can afford to live in? But they keep building them anyway?

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

No, but I've heard of them. I imagine they'll fill up eventually, considering the rate of growth here.

[-] 1 points by gestopomillyy (1695) 5 years ago

face facts there is not enough to go around.. the only way america can grow is to take back all that has been given to china. theres only so much money in the world

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

Why would you say that there is not enough to go around, when we have the whole universe at our disposal? We just have to mobilize to make use of it. There's also vast untapped resources at the sub atomic level right here on earth, again, all that is missing is the will to make progress.

[-] 1 points by gestopomillyy (1695) 5 years ago

i think that is just a hopeful outlook. the fact prove themselves.. china gets richer, america gets poorer.. europe gets poorer, thats cause theres only so much to go around.. now the only real profit left is war and death. if there were other resources.. the 1% would have that locked down already and no one would be going broke,, but thats not the case .

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

There are a lot of things that China wants to buy from the US, mostly high tech items. We could go a long way towards balancing our trade deficit, if we sold these items to China.

However, we have a trade ban on those items, since our government says that they could also be used for warfare. But China has never fought an aggressive war with the west in the many thousands of years of its existence.

We don't need to compete with China on low tech consumer items. We'd be better off building the high tech, for our own infrastructure, to sell to China, as well as to other countries around the world.

We could sell these items on credit to the third world countries, then, once they're installed in those economies, they'd produce income, which they would use to pay us back. This was FDR's plan for using the US war economy after the end of WW2.

Facts are facts, but the interpretation of facts can be quite different.

[-] 1 points by grapes (5128) 5 years ago

China can at best be the U.S.'s frenemy as it exists now because of fundamental differences in our values. I am NOT saying that the Chinese PEOPLE cannot transcend the abyss because we all have very similar problems -- with the proper perspective, I believe that deep down what we want as humanity are very much the same, regardless of the divisive issues that separate us parochially.

[-] 1 points by gestopomillyy (1695) 5 years ago

if they are sold to china whats to keep them from reverse engineering? then taking over that market also? we could go a long way towards balancing the trade deficit by raising tariffs and fees to make china goods equal in price to american goods. there by making it equally profitable to manufacture in america and growing the economy.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

China should reverse engineer them. The idea is to work towards "co-independence" rather than co-dependence. Eventually both the US and China should depend primarily on their own internal markets, and just trade in highly specialized goods.

But we need to start where we are. China produces the cheap consumer stuff, we can make the high end stuff. If we start out trading this way, we will work towards mutual independence, a point at which those tariffs you mention would be more appropriate.

I agree it would be good to have equally profitable manufacturing, with well paid workers, in both China and the US.

[-] 1 points by jrhirsch (4714) from Sun City, CA 5 years ago

Are you there for work or traveling?

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

I'm here to work, teaching English, though I would like to travel a bit more this time. Really hoping to have the chance to see Tibet.

[-] 1 points by stevebol (1269) from Milwaukee, WI 5 years ago

You don't get much time for travel with gigs like that. I miss the far east.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

During Spring and Autumn festivals here, people often take a week or two off for travel, but since so many people are traveling then, public transportation is terribly crowded.

Work contracts are generally for a year in China, with a bonus provided at the end if the contract is completed. I'd like to take a month to travel once my contract is up, before signing another contract again.

Where were you when you were in the far east? I love it here, and think that I will stay for a long time, if not the rest of my life.

[-] 1 points by stevebol (1269) from Milwaukee, WI 5 years ago

I had a nite club gig in Osaka for 6 months back in the mid-80's. It was 6 nights a week so no time to see very much.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

Night club jobs, particularly DJs, are common for foreigners here also.


[-] 0 points by Misaki (893) 5 years ago

China competes for jobs by offering lower wage prices. The US cannot compete the same way.

The accelerated work week would create jobs in the private sector, so we could get rid of wasteful government programs, then use that money on infrastructure or whatever else we need.

Fact: most people in the US have a car. Only about 4% use public transportation. The amount of money some people get in food stamps per month in the US would be enough for a comfortable middle-class existence in China. We could... build stuff, or something, although we already have 18 million empty homes but people would rather obsess over the budget and what the right tax rate for the rich is.

[-] 2 points by arturo (3169) from Shanghai, Shanghai 5 years ago

China is attempting to move away from the low skilled, low wage model by developing higher levels of technology and better educated workers. Eventually they want to have a much higher percentage of highly skilled, high wage workers.

Perhaps your facts about the US are true, but if America keeps declining and China keeps growing, what do you think will happen?

All in all, we'd be much better off if we thought in terms of cooperation with China rather than competition. We should cooperate on infrastructure which would connect our continents, such as a train that could cross the Bering Strait by bridge or tunnel, as well as investing in scientific research together.

[-] 1 points by Misaki (893) 5 years ago

China also attempted to popularize the Chinese "brand" with efforts that were eventually criticized by the US for being anti-competitive.

Competing by being lower in price doesn't necessarily mean low quality, anyway. Um, for example...

There are actually businesses, that you will find a few times in a lifetime, where any manager could raise the return enormously just by raising prices—and yet they haven't done it. So they have huge untapped pricing power that they're not using. That is the ultimate no-brainer.

That existed in Disney. It's such a unique experience to take your grandchild to Disneyland. You're not doing it that often. And there are lots of people in the country. And Disney found that it could raise those prices a lot and the attendance stayed right up.

Found the example I was looking for. This is by Munger, the business partner of Warren Buffett who was at one point the world's richest person.

Talking about economics, you get a very interesting phenomenon that I’ve seen over and over again in a long life. You’ve got two products; suppose they’re complex, technical products. Now you’d think, under the laws of economics, that if product A costs X, if product Y costs X minus something, it will sell better than if it sells at X plus something, but that’s not so. In many cases when you raise the price of the alternative products, it’ll get a larger market share than it would when you make it lower than your competitor’s product. That’s because the bell, a Pavlovian bell — I mean ordinarily there’s a correlation between price and value — then you have an information inefficiency. And so when you raise the price, the sales go up relative to your competitor. That happens again and again and again. It’s a pure Pavlovian phenomenon. You can say, “Well, the economists have figured this sort of thing out when they started talking about information inefficiencies,” but that was fairly late in economics that they found such an obvious thing. And, of course, most of them don’t ask what causes the information inefficiencies.

[-] -1 points by shadzhairart (-357) 5 years ago

7 story malls now that's a sign of success. Too bad they hide poor people far in the villages and censor the media and the Internet like there's no tomorrow.

[-] 2 points by arturo (3169) from Shanghai, Shanghai 5 years ago

As I mentioned, the public transportation is what really impressed me, the malls are just a nice side show. Sure they have poor people, but China's also brought 100 million people out of the deepest poverty over the past thirty years, according to the world bank.

If the US were to work with China more cooperatively, rather than striving against China competitively, China's poverty could be further reduced, and the US economy would be revitalized as well.

The western internet is heavily manipulated also, its just less obvious. For example if you search for news on a controversial topic, such as Syria or Iran, the US elite-friendly articles will occupy practically all the top positions.

[-] 0 points by shadzhairart (-357) 5 years ago

There's no comparison with internet censorship in US and China. I really don't think China should be our model. Bad bad idea.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

Censorship here and in the US are quite different, on the surface, many things are different here, but underneath, there is much in common.

Actually, China is following the "American System" of economics to a great extent:

American System http://en.wikipedia.org/wiki/American_System_%28economic_plan%29

that is, development of infrastructure and manufacturing. The US would be better off if it similarly went back to the "American way" of doing things. Good, good idea.

[-] 1 points by fiftyfourforty (1077) from New York, NY 5 years ago

" The US would be better off if it similarly went back to the "American way" of doing things. Good, good idea."

The US was shielded by two vast oceans and dominated a region of weak states. After WWII the US was essentially the only power standing and the USSR broke its neck to gather the strength to fend off any potential attack. The US was a super big creditor nation that had no real challenger until around the time it blew the Vietnam war.

I found this quote i like:

Saigon was an addicted city, and we were the drug: the corruption of children, the mutilation of young men, the prostitution of women, the humiliation of the old, the division of the family, the division of the country--it had all been done in our name. . . . The French city . . . had represented the opium stage of the addiction. With the Americans had begun the heroin phase. --James Fenton, 1985

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

I think those explanations of American prosperity after WW2 as being somehow "unearned" are mostly just propaganda, promoted by the powers that are trying to maintain us in a state of neo-colonialization.

Regarding Saigon, that was not the "American System" in action. Just because something is done in or by America doesn't mean it is the "American System" taking action. It was big corporations, with their centers on Wall Street and the City of London which brought that about.

Think of the US as like a computer that can run one or another operating system. The American System along with the British free trade system have dominated America at different points in history.

America was originally about staying out of foreign wars, the way JFK intended, before he was assassinated.

[-] 1 points by fiftyfourforty (1077) from New York, NY 5 years ago

A computer engineer once told me that a system is designed to do what it does.

[-] 1 points by grapes (5128) 5 years ago

Very interesting idea -- Microsoft would have enthusiastically embraced this slogan because there would be NO more computer bugs if we all just truly BELIEVE -- hallucinations reign supreme after all! Our political system needs a memory upgrade and move to Ubuntu operating system.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

Was he talking about an operating system or a computer system as a whole?

[-] 1 points by fiftyfourforty (1077) from New York, NY 5 years ago

I wouldn't know the difference if it fell on top of me and introduced itself. But actually he was making an analogy with the political system we have.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

In some ways such analogies are quite appropriate.

[-] -2 points by shadzhairart (-357) 5 years ago

The difference with computer engineering is that it's mostly static. The system does not change. In a representative republic, the laws can be modified in various ways and since humans run the show the system is constantly being modified.

[-] -2 points by shadzhairart (-357) 5 years ago

The "American Way" of doing things is what led to this mess. Are you a high school student? Your logic lacks.

[-] 2 points by arturo (3169) from Shanghai, Shanghai 5 years ago

Actually, British free trade is what has gotten us into such a mess, we haven't been running on the American System for decades.

Talk about lacking logic, you're attacking the man, a philosophical strategy discredited by Socrates over two thousand years ago, try sticking to the topic.

[-] -1 points by shadzhairart (-357) 5 years ago

Your arguments make little sense. The problems which exist in America are America's fault not the fault of the British. The system which we had before got us to here. That means the system does not work. The solution is for a better system, not a return to the old one. And, China is not the better system we should aim for. If China is growing, it's only because it cares little about human rights.

[-] 2 points by arturo (3169) from Shanghai, Shanghai 5 years ago

Haven't you read in the newspapers all this talk of "free trade" over the past decades? That philosophy was originally expressed by Adam Smith, economic spokesperson for the British East India company hundreds of years ago. When we fought the American revolution, British Free Trade is what we were fighting against.

The British empire was not the country of England however, it was, and is, an international corporate empire, which includes Wall Street, which has brought the British free trade system to dominance in America once again.

America's problems are America's fault in the sense that we have been duped into accepting British free trade, after having fought it off for centuries.

Think of the system that we had under FDR or JFK, those periods, when we had a flourishing economy. That was the American System in action, and if we would have stayed with it, we would have been a lot better off today.

FDR invested in infrastructure, while JFK pursued economic development through the space program, which created a whole new industry - aerospace.

China has brought 100 million people out of the deepest poverty over the past thirty years, that's incompatible with not caring about human rights.

[-] -3 points by shadzhairart (-357) 5 years ago

You sir need to take some economy lessons. You are way off to left field.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

Indeed? Do elucidate for me...

[-] 2 points by TitusMoans (2451) from Boulder City, NV 5 years ago

Don't expect any erudite response. The prejudice against non-American institutions and methods has become so strong a bias it overpowers reason of any sort. Most often, the responses becomes more and more hysterical at last degenerating into vague, negative abstractions of "unAmerican" or, my personal favorite, "loss of freedom," as if we somehow enjoy a miraculous liberty unavailable to the masses of other nations.

The same people, who so often point out the failure of--for example--China's "poor" human-rights record, ignore the human-rights record of the United States, glossing over the facts that we have the highest incarceration rate of any developed country; that we offer no universal health care; that decent housing is becoming a luxury; that, though we are the world's largest agricultural producer, millions of our own people go hungry.

I am not trying to bash the United States, just demonstrate that we have to work on our own problems before criticizing others.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

Thanks, those are good points.

[-] -1 points by shadzhairart (-357) 5 years ago

China and US are two of the most messed up countries in the world. It's not because I spit on China that I don't have a bit of saliva leftover for US. If I spit on China it's because arturo wants us to use it as our model. I think that's a stupid idea. There are better models to base ourselves on than China. Much better models.

[-] 1 points by arturo (3169) from Shanghai, Shanghai 5 years ago

China has its problems, but its getting better, with time, the good drives out the bad.

[-] 1 points by TitusMoans (2451) from Boulder City, NV 5 years ago

Thanks for clearing that up. I misinterpreted your response; mea culpa.

That said; maybe we shouldn't use anybody or other country as our model. Maybe we should concentrate on uniting workers by appealing to their needs: the lack of health care, the high cost of decent housing, the accelerating prices of food stuffs and help them to organize themselves into a coherent movement, whatever it's called, to really fight for the basic rights of life.

[-] 1 points by MattLHolck (16833) from San Diego, CA 5 years ago

what of non workers ?

[-] 1 points by Misaki (893) 5 years ago

Are you talking about China or the US? From your list of issues it isn't at all clear.

[-] 1 points by TitusMoans (2451) from Boulder City, NV 5 years ago

The United States.

[-] 1 points by notaneoliberal (2269) 5 years ago

"The American System" is not equivalent to "The American Way". The "American System" refers to an economic system and indeed it was far better than what we have morphed in to. What we have today is "neoliberalism". I can't defend Arturo on everything he says, but in this case, you failed to understand what he was talking about. It has little to do with war policy.

[-] 1 points by Misaki (893) 5 years ago

and censor the media and the Internet like there's no tomorrow.