Friday, February 20, 2009

Tough Times In China

When your economy is based upon exports, this is the result:
"Tang Hui and his family prospered as migrant workers during China's economic boom, earning $10,000 a year: enough to build a house, send a cousin to school and pay for his grandmother's medical bills.
Tang Hui lost his manufacturing job in October just days after getting married.

Tang Hui lost his manufacturing job in October just days after getting married.

But those good days are over. The family's cash earnings have evaporated, snatched away by a manufacturing crash cascading across China caused by falling global demand for its goods."
I would say it is more than 20 million people out of work as I don't believe the official government statistics. China is going to have a big problem with all people who moved to the cities to work for factories producing goods for the export market. That mixed with the one child policy that fostered the killing of girl babies over males will result in a lot of out of work young men. They are difficult to control. Another macro trend to watch.

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