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Old 11-24-2015, 07:10 AM
 
Location: Fortaleza, Brazil
2,572 posts, read 4,656,135 times
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Remember Japan in 1989?

Everyone in 1989 believed Japan was going to take over all American companies, and take over the world...

(Just remember who is the boss of older Marty McFly in 2015 in "Back to the Future - part II", a movie from 1989)

Then in 1990 the Nikkei went down more than 35% in a year, and all the talk about Japan "taking over the world" disappeared.

So, is it possible that the same happens to China? All the expectations about the future of China could be frustrated, just like the frustrated expectations about Japan in 1989?

I'm not saying that I believe this is going to happen, I actually don't think it's going to happen, but there are similarities between the expectations about Japan in 1989 and the expectations about China today.

Will China make it different?
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Old 11-24-2015, 10:19 AM
 
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Yep, I was living in Japan in 1989. If you think about it, Japan has no natural resources. Nearly everything Japan exports has first been imported into the country in the form of raw materials. Car manufacturing and exporting was their biggest business at that time. Germany I think holds the title for that industry now. Electronics was another. At that time, Japan was producing much of the electronics (JVC, Sony, Toshiba, Panasonic, Futaba, Aiwa, etc.). Korea and China are now involved with those. Back then I was heavily into band stuff and playing electric guitar. Up until a few years ago, I had many of the BOSS guitar pedals I had purchased in Japan back in the mid 80's. Back then BOSS was manufacturing their pedals in Japan. Later on they shifted to manufacturing them in Korea and eventually to Mexico I think. I only know about this because when I put up my BOSS guitar pedals on ebay, buyers were paying really high prices for them since they were made in Japan. Apparently there is a BOSS pedal following and many collect these like others collect stamps and coins for example. I had also purchased a Fender Strat back in 87'. Interesting thing about that was the parts were genuine Fender Strat. parts that had been shipped to Japan and the guitar was assembled there. I bought that guitar for very little compared to the other guitars I had at that time (Hamer and Gibson Les Paul). But 20 some odd years later when I went to sell it, I got over five times for it because of the fact that it's parts were genuine Fender Strat parts.

This is why I think Japan was so dominating back in the mid to late 80's. I still buy Japanese over most other brands these days, with the only exception being my cars (German), but that may change as well in the near future.

IMO the only reason China is even relevant today is because they can crank out enormous amounts of product for pennies to the dollar because they pay their workers squat along with cheap cheap CHEAP materials. Buy American made compared to Chinese made, and the difference in price is remarkable. Because China can crank out tons of merchandise without the same overhead as the American manufacturer does. My grandparents built their own home right after WWII ended and most, if not all of the fixtures installed in the home are still functional and in good shape, still. Go to Home Depot and pick up a $15.00 made in China bathroom fixture and I guarantee you that in three years or so it will need to be changed out due to rust, etc.

Last edited by FC76-81; 11-24-2015 at 10:29 AM..
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Old 11-24-2015, 11:21 AM
 
12,295 posts, read 18,417,176 times
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Quote:
Originally Posted by MalaMan View Post
Remember Japan in 1989?

Everyone in 1989 believed Japan was going to take over all American companies, and take over the world...

(Just remember who is the boss of older Marty McFly in 2015 in "Back to the Future - part II", a movie from 1989)

Then in 1990 the Nikkei went down more than 35% in a year, and all the talk about Japan "taking over the world" disappeared.

So, is it possible that the same happens to China? All the expectations about the future of China could be frustrated, just like the frustrated expectations about Japan in 1989?

I'm not saying that I believe this is going to happen, I actually don't think it's going to happen, but there are similarities between the expectations about Japan in 1989 and the expectations about China today.

Will China make it different?
The causes are slightly different - in Japan you are talking about a a market driven economy and China you are talking about a (for the most part) government driven economy. No one knows how bad, really, China is. No one there questions the governments published growth rates and rates of return. Most analysts are saying it's much worse then what the government is reporting. For me, and for any visitor really, the signs were obvious 3 and 4 years ago when I saw empty skyscrapers.
The causes are different as well, somewhat, because both were the result of an overheated economy. Overlending caused an asset bubble in Japan. For China, they just ran into the brick wall of globalization - inflation, competition, rising costs in China, a growing middle class demanding higher salary - you finally get to the point where exported goods are not always cheaper from China. Getting back to Japan - it got so bad that nothing the government could do, infusing the economy with borrowed funds, raising or lowering interest rates, made a difference. That might be the one saving grace for China as it is government driven they have more control over it. Wage cuts? - no problem, Price controls? - no problem. Middle class suffers? - no problem. People starve? - no problem.
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Old 11-24-2015, 01:59 PM
 
749 posts, read 597,345 times
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I think China isn't anything like Japan in 1989, I think it has much more similarities with the Soviet Union of the 1970s. The PRC relies on a very large military force, has a totalitarian governement. In fact a few decades back the Soviet Union was the only credible military contender of the US, and was considered a superpower. Certainly the Soviets were responsible for technological and cultural prowesses, nonetheless most of the population was poor, repressed, following an economical model disconnected from reality. The Soviet Union collapse only confirmed that it wasn't ever as strong as many people thought it was. PRC just like the Soviet Union struggles with nationalities, corruption and bureaucracy. Sure China is the World's factory due to low salaries, huge internal market, huge buying capacities, and this led to China gathering lot of foreign currency.
But overall I would say no, China has very little do to do with Japan.
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Old 11-24-2015, 02:32 PM
 
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China's economy has been artificially stimulated by trillions and trillions of dollars worth of out-of- control lending. But the whole thing is starting to fall apart. Japan had a bubble economy in the late 80s, but I'm not sure that that was the result of imprudent lending. Japan still hasn't recovered. China??
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Old 11-24-2015, 03:52 PM
 
25,059 posts, read 23,180,679 times
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Pretty sure the Chinese are smart enough to avoid some, or all, of the pitfalls that plagued Japan. They made it really far, further than most Westerners thought. But, give it up. Western dominance is not gonna last forever. Everyone has to make do with sharing power in the world again. China has had the benefit of seeing what didn't work and apply it to their own country. The only mistake China has made was the one child policy, which they are reversing.
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Old 11-24-2015, 04:09 PM
 
12,295 posts, read 18,417,176 times
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Quote:
Originally Posted by theunbrainwashed View Post
Pretty sure the Chinese are smart enough to avoid some, or all, of the pitfalls that plagued Japan. They made it really far, further than most Westerners thought. But, give it up. Western dominance is not gonna last forever. Everyone has to make do with sharing power in the world again. China has had the benefit of seeing what didn't work and apply it to their own country. The only mistake China has made was the one child policy, which they are reversing.
Not really. "Western dominance" isn't even a factor, hasn't really been for years. The west is a trade partner, a customer first and foremost, a competitor second.
China if anything is competing with countries in it's own region - Vietnam is a serious competitor (both in trade and resources in the South China Sea), India is basically where China was 20 years ago and has the same potential if they can get there act together, Japan, Taiwan, and Korea are still powers. China has it's labor manpower but they still can't match those countries in terms of productivity and quality. Thailand, Malaysia, etc....all competitors, and Singapore will remain the unstoppable financial/banking powerhouse it seems.
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Old 11-24-2015, 04:29 PM
 
749 posts, read 597,345 times
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Quote:
Originally Posted by Dd714 View Post
Not really. "Western dominance" isn't even a factor, hasn't really been for years. The west is a trade partner, a customer first and foremost, a competitor second.
China if anything is competing with countries in it's own region - Vietnam is a serious competitor (both in trade and resources in the South China Sea), India is basically where China was 20 years ago and has the same potential if they can get there act together, Japan, Taiwan, and Korea are still powers. China has it's labor manpower but they still can't match those countries in terms of productivity and quality. Thailand, Malaysia, etc....all competitors, and Singapore will remain the unstoppable financial/banking powerhouse it seems.
Yes Asian is definitely a World of its own, to which the West is a partner. But It's striking how some always find a way to make a connection between two topics no matter how unrelated they might be, just to push in their agendas and obsessions!
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Old 11-24-2015, 06:41 PM
 
931 posts, read 614,247 times
Reputation: 1488
Quote:
Originally Posted by Dd714 View Post
Not really. "Western dominance" isn't even a factor, hasn't really been for years. The west is a trade partner, a customer first and foremost, a competitor second.
China if anything is competing with countries in it's own region - Vietnam is a serious competitor (both in trade and resources in the South China Sea), India is basically where China was 20 years ago and has the same potential if they can get there act together, Japan, Taiwan, and Korea are still powers. China has it's labor manpower but they still can't match those countries in terms of productivity and quality. Thailand, Malaysia, etc....all competitors, and Singapore will remain the unstoppable financial/banking powerhouse it seems.

China's real competitor is India。
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Old 11-24-2015, 06:43 PM
 
25,059 posts, read 23,180,679 times
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Quote:
Originally Posted by seixal View Post
Yes Asian is definitely a World of its own, to which the West is a partner. But It's striking how some always find a way to make a connection between two topics no matter how unrelated they might be, just to push in their agendas and obsessions!
Ah yes, anything that remotely goes against "West is the rest, White is Right" is pushing an agenda and obsession very Eurocentric viewpoint. The world doesn't revolve around the West anymore. That's not an agenda or obsession, that is a fact and it seems to upset a lot of people with a Eurocentric outlook on life
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