China 2009: The Debrief
Hey, folks. Here's the first cut of a presentation I'm slated to give tomorrow internally on some of the bigger themes that emerged from this year's China trip. Hit me below with comments or questions. If you're a regular reader of this blog, then you will have seen some of these photos and heard some of these views before.
Oh, baijiu. Good thing the Chinese beer is low ABV.
These street markets are just some signs that economic activity is healthy in rural China. Remember that these folks live way outside the global economic network, so the housing downturn in the US, though it drilled export manufacturing in SE China, pretty much left these folks untouched.
The beer gardens in Harbin were bumpin'.
Of course, rural China has benefited from massive government stimulus into the ag sector. This stimulus, however, has more legs than the infrastructure stimulus because it gets at key goals to increase rural incomes and make China food independent. (Slide from a John Deere presentation.)
Government spending has also propped up the infrastructure sector -- see here highways and subways. The problem with the highways right now is that they're not always necessary. But this is why the Chinese stock market dropped today on news of slower bank lending (remember than banks in China are state run). Without the state financing seemingly unnecessary projects, China's growth will stumble.
More government projects to build power plants and ports.
This is a picture of temporary housing for construction workers. The interesting point here is that while construction workers in America ultimately expect to make enough to buy one of the houses they might be building (remember Levittown?), Chinese construction workers are so far down, that they just move from project to project without ever building something they could settle down in. That lack of upward mobility is a real problem that China has to confront, particularly as it seeks to increase domestic consumption.
Yes, they let us get that close. This is like something out of the Industrial Revolution. Note that working with China to make factories more environmentally sensitive is probably far-fetched until they spend first on basic worker safety measures (*cough*safety goggles*cough*).
And then you have the ethnic strife in Xinjiang. The government views this as a product of their being left behind by the economy, but it likely goes deeper. Something to watch going forward, though expect the government to develop western China in an effort to buy their support.
Always close with humor. :-)