“Frugal is the new cool for young Chinese as economy falters”
“Instead, the 39-year old Shanghai marketing consultant is one of many Chinese in their 20s and 30s cutting spending and saving cash where they can, rattled by China’s coronavirus lockdowns, high youth unemployment and a faltering property market.”
“I no longer have manicures, I don’t get my hair done anymore. I have gone to China-made for all my cosmetics,” Fu told Reuters.
While individual frugality is laudable, mass frugality is bad for the Macro economy. China’s strategy is to develop an internal market for its manufactured goods so it becomes less dependent on exports.
If the youth becomes frugal at the same time as the general population is aging this strategy will not come to pass.
Mass frugality will slow economic growth. That, in turn, will reduce job prospects for the young. Lower income will lead to depressed spending. A vicious cycle.
That, in turn, will reduce job prospects for the young. Lower income will lead to depressed spending. A vicious cycle.
So if, buoyed by calls of higher wages for what used to be entry level work… if jobs like fast food go away… will those young people enter that vicious cycle too? And if so - - -somewhere along the line did some make a mistake on this one?
China has always had a high savings rate, hence the need to run a trade surplus so the capital can be invested outside China. Within China, too much savings has caused the real estate bubble, now imploding we hear.
The last thing they need is more savings. Yet the Chinese ethos is to get rich … and saving and investing seen as the route …
For the world though, maybe it’s good … less fossil fuel burning …
Think of the irony, capitalist states take better care of their people than communist states! Maybe greedy capitalists are better than benevolent communists
Yes, all day long.
But to me - it shows that Capitalism - combined with some targeted socialism - is better and if not targeted socialism - then certain government installed safeguards - such as Social Security - something that many including this writer feel that returns could be better on in the private sector - yet - the government maintains this law as a safeguard and it’s a good thing.
My hope is it will be preserved…but that requires a non tribalistic environment.
Think of the irony, capitalist states take better care of their people than communist states! Maybe greedy capitalists are better than benevolent communists.
More importantly.....socialists are capitalists and not communists.
But when a dictator controls the central bank and uses demagoguery that flavor of socialism is crap.
It is not Germany, Sweden, the UK, Ireland, Japan, Australia, NZ, or Canada. Socialism can work even better than in the US. Not that we are not socialist already.
It is VZ!!