Saturday, June 11, 2016

Why China Growth is Slowing


Lots of speculation about why China's economy is slowing.  My personal theory is as follows:

  1. China's economy relies on a lot of exports of manufactured goods: clothes, electronics, household goods, etc.
  2. China's main markets are the USA and Europe
  3. Most people in the USA already have everything they need and don't need to buy any more plastic containers, T Shirts, jeans, pots, pans, furniture, smartphones, plastic flower arrangements, computers, cameras...
    1. How can I be so sure?  Try to sell or give away anything in the USA nowadays.  No one wants it.  The Salvation Army is turning away stuff and the landfills are filling up.  We don't need another 45 GB hard drive, floating chaise lounge chair, package of athletic socks, or a 100,000 BTU BBQ with fuzzy logic rotisserie.
    2. As my wife and I downsize, we find stuff we bought and hardly used, all made in China.  I remember when it was expensive to buy this stuff and you could sell it used.  Now I can barely give it away - even students, cleaning ladies, and the charities don't want it.
  4. Some of the fastest growing businesses are self storage warehouses and "POD" style storage.  We have so much stuff, mostly from China, that you need more space than your 6000 square foot house to store it all.
So China has made so much stuff that the world is stuffed for now and can't take any more.  Anyway, that's what I think.

Photo credit: Flickr

1 comment:

  1. The North American lifestyle has been adopted by China, but they have implemented it in a 20 year period, how could they have too much stuff?!? Easily, I just look in my basement, and see how much stuff I have in my basement, maybe we should be impressed by how China got it done so quickly?

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