Pittsburgh's Economic Ranking in the World (York: bill, near, about)

[BrianTH]

China is also not content with being a third-world consumer. And Chinese workers are not going to remain content making third-world wages. But if only we had the example of some other already-developed regions, so that we could see if it was really true that the existence of other developed regions meant no place in the global economy for the United States . . .

In that sense, Japan is a useful reference--there will always be some bogeyman that is supposedly coming to impoverish us with their inherent economic superiority. But that's not how it actually works.

[h_curtis]

Originally Posted by Bettafish

In Pittsburgh, a haircut costs $20. In my university in China, it was $2. I do not think the barbers in China are anything worse than those in Pittsburgh. Their equipments are often better, actually.
However, in Zurich, Switzerland, the same haircut costs $50. (Yes, I lived there).

After the US "outsources" most work to other countries, the GDP will become much lower.

Thank you for the enlightenment. It won't get through to the paid rah, rah people, but the rest of us read and learn. Makes a lot of sense and I am not one to fall for the hype of such a dumb article.

[Bettafish]

Originally Posted by BrianTH

Nah. We're just doing higher-productivity work instead.

China has many many well educated, smart people, too....

Nowadays, there is still a "western fever" in Asia. e.g. Chinese are willing to spend thousands of dollars to buy French handbags and so on. (Luxury products are about three times more expensive in China than in the US, because of the ridiculous taxes.)

After that is gone.... They will probably think a $50 domestic cell phone is not so bad compared to a $699 iPhone... but maybe by then Chinese products will be expensive too..

[BrianTH]

Right, increasing Chinese wages will lead to higher prices for Chinese-produced goods and services on the supply side, and those wages will also lead to higher Chinese demand for goods and services and thus higher prices on the demand side as well. And in fact the Chinese will start "out-sourcing" less productive labor tasks to a combination of automation and countries further back on the development track, just like the countries ahead of it on the development track have done.

So assuming it does eventually converge on developed-country standards (and it has a long way to go yet), it will just add to, not replace, developed-country economics.

[Clint.]

Similar dynamic has been taking place in India. People are people, and this could have been Pittsburgh circa 1890: The Associated Press: India's Maruti Suzuki shuts riot-hit car plant

These countries are so populous the scale is sort of unprecedented and will play out over generations, but many aspects of the world today are unprecedented.

[Bettafish]

Sometimes I think climate has an impact on people's "work attitude".

An Indian professor once said there is no way for Indians to work as efficiently as Chinese; because most of the time, India is simply too hot. On the other hand China is located in the temperate zone. Nowadays AC can solve the problem to some extent, of course.

When I was in Cairo, Egypt I noticed many people are still on the streets at 3 am. The guide said it is too hot during the day and people go shopping etc. at midnight. Anyway I feel such a schedule does not make people work hard. In those countries people are not used to working 8-10 hours a day, because it could be fatal.

[Gnutella]

Originally Posted by Bettafish

Nowadays, there is still a "western fever" in Asia. e.g. Chinese are willing to spend thousands of dollars to buy French handbags and so on.

Sounds a lot like people here in the United States who will gladly pay a premium for an item simply because it's imported, and wouldn't consider a similar domestic item even if the quality is roughly equal.

[Garvdog]

Originally Posted by BrianTH

Right, increasing Chinese wages will lead to higher prices for Chinese-produced goods and services on the supply side, and those wages will also lead to higher Chinese demand for goods and services and thus higher prices on the demand side as well. And in fact the Chinese will start "out-sourcing" less productive labor tasks to a combination of automation and countries further back on the development track, just like the countries ahead of it on the development track have done.

So assuming it does eventually converge on developed-country standards (and it has a long way to go yet), it will just add to, not replace, developed-country economics.

You can't apply the same rules to China as you do for free market countries like the U.S. China is still a Communist country- the government can place artifical controls on the market to make sure that China continues to be price-competitive and does not become dependent on anyone else. It won't necessarily evolve freely like Western democracies. However, China is an interesting case becuase I don't think any non-democratic nation has ever become so economically powerful before (but I'm not a history expert, so I could be wrong).

[Bettafish]

Originally Posted by Garvdog

You can't apply the same rules to China as you do for free market countries like the U.S. China is still a Communist country- the government can place artifical controls on the market to make sure that China continues to be price-competitive and does not become dependent on anyone else. It won't necessarily evolve freely like Western democracies. However, China is an interesting case becuase I don't think any non-democratic nation has ever become so economically powerful before (but I'm not a history expert, so I could be wrong).

No matter it is communist or not, most companies in China are privately owned, especially in manufacturing. The "artificial control" is not easy. For example, the central government wanted to keep the real estate prices lower, but it basically failed.

In my hometown in a western (i.e. "underdeveloped") province of China, an ordinary apartment costs 70k US$. Don't even think about buying a house.

[BrianTH]

Originally Posted by Garvdog

the government can place artifical controls on the market to make sure that China continues to be price-competitive and does not become dependent on anyone else.

Many countries have tried price controls, including the United States (most recently under Nixon). It doesn't really work, for economic reasons (it induces artificial shortages, leading to long lines and such, followed by black markets and so forth).

becuase I don't think any non-democratic nation has ever become so economically powerful before (but I'm not a history expert, so I could be wrong).

Speaking of which . . . during the 1950s and 1960s the Soviet Union was (likely) experiencing economic growth and "catching up" with the developed West. Its growth rate then slowed in the 1970s and into the 1980s, finally collapsed in the late 1980s, leading to the overthrow of Communism.

China may follow a somewhat different path, but they actually learned the lesson during that period that a completely centrally planned economy could not keep up with the mixed economies of the West. How far they can really get even with the current degree of centralized state control is very much an open question.