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China: All about jobs

Robert Peston | 07:49 UK time, Wednesday, 4 March 2009

It's just after 8 and I am standing in the middle of a jobs market in Dongguan in Southern China.

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It's mobbed. There are thousands of unemployed young people milling around in a car park in front of a commercially run jobs market.

The employment exchange - plays Chinese pop music at deafening volume, perhaps to give a lift to the idle young people.

Wearing (mostly) dark blue jackets and jeans, they pick up a flimsy newspaper which lists what's available today in the basic industries that characterise the vast local economy.

Its six pages contain just 300 vacancies, not remotely enough to meet the needs of those who are surging in from all sides.

And round the corner, there are hundreds more men - and they are mostly men - at similar recruitment markets (I am told that companies regard women as less bolshy so exercise gender discrimination by sacking fewer of them).

The men come in by bus, by bike, but mostly on foot. And their numbers keep swelling.

When I speak to them, they are grim about prospects: jobs are few; and vacancies so scarce that employers are ruthlessly cutting wages.

A salary of £4 ($5.60) a day is not untypical, even for a position requiring some skills. That's barely a subsistence wage, even here.

The crowd is a troubling manifestation of South China's jobs crisis. Thousands of factories have closed in the region, millions of workers - mostly migrants from impoverished rural China - have been made redundant.

And unlike last year, the global recession means that very few new job opportunities are being created.

South China is one of the great manufacturing areas in the world. And just as thousands of factories sprouted over the past few years, covering every inch of hundreds of miles along the southern coast, now they are being vacated and abandoned at alarming speed.

In manufacturing - from Germany, to Japan, to this vast coastal strip that sucked in millions of migrant workers from China's impoverished countryside - what's going on is a fully-fledged crisis.

In Japan, there's what increasingly looks like a manufacturing depression, a fall in annual output of a tenth or more.

Here in China the official statistics don't speak of quite such a severe output squeeze, but the armies of unemployed going home to their birthplaces - or thronging the job exchanges - suggest that the data understate what's been going on.

This matters to the whole of China, because exports - mostly of manufactured goods - represent almost 40% of China"s economic output.

Of the bigger nations only the German economy is more dependent on overseas sales.

That said, Japan and Germany are more vulnerable than China to the collapse in global demand for goods, because over the past few years their growth has been much more driven by a surge in exports than China's.

For China, this isn't just an economic problem: it may be a social disaster in the making.

Today, the mob was good-humoured. But those I spoke with were pessimistic that things would soon improve.

And they were doubtful that the government's £420bn stimulus package - focused on infrastructure spending rather than direct help for manufacturers - would do much for them (however, the premier, Wen Jiabao, is expected to double this package on Thursday).

For years now millions of Chinese migrants to cities have been working all hours, seven days a week, for the slimmest of wages. They've slept in basic dormitories attached to factories and have enjoyed little leisure and only the most meagre of luxuries.

However the work allowed them to dream of a better life.

If that dream has now been snatched from them, at some point they may manifest their displeasure - which, in a one-party state lacking the conventional western safety valve of protest via the ballot box, could turn this economic debacle into social and political tumult.

Comments

Page 1 of 2

  • Comment number 1.

    £28 a week: at the rate we're going, it won't be too long before british and chinese wages converge.

    I mean, the exchange rate value, the UK rate may be £2800 per week by then.

  • Comment number 2.

    "For years now millions of Chinese migrants to cities have been working all hours, seven days a week, for the slimmest of wages. They've slept in basic dormitories attached to factories and have enjoyed little leisure and only the most meagre of luxuries."

    The key is whether China can generate an internal market for its products. If the average wages were so low during the boom times, the odds are slim that an internal market taking the place of exports.
    However, necessity is the mother of invention.


  • Comment number 3.

    Anything is possible but i'm sure the Chinese authorities have plans to deal with trouble.

    Just becasue they make all the fluffy toys in the world does not make China a democracy.

  • Comment number 4.

    A 10 percent fall. What do you think has happened to the UK manufacturing sector in the past then.

  • Comment number 5.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 6.

    Is it possible to have any comparisons with what stage of the UK job market that the scenes you are witnessing have? Just to have some kind of context.

    Here in China the official statistics don't speak of quite such a severe output squeeze, but the armies of unemployed going home to their birthplaces - or thronging the job exchanges - suggest that the data understate what's been going on.

    Is this related to the fact that you are only in one area and China is vast, or a side swipe at government statistics per se?

    in a one-party state lacking the conventional western safety valve of protest via the ballot box, could turn this economic debacle into social and political tumult.

    I had always been lead to believe that the Chinese had a different social structure, but would happily accept examples that you can quote.

    Are you in fact casting comparisons with the UK?

    Are you suggesting that the only thing here that might stop the riots in the UK is an election?

    Is that why you are in China? Are there any NR investors out there?

    I suppose what is grating here the most is "why" you are out there. These kinds of reports could have been filed by any BBC employee out there and I don't really find a great deal of added value by having you doing them

    Do we have to wait for the greater depth reporting? Are you in fact doing some TV work?

    Are the reports actually also showing what effect the rest of the worlds' "protectionism" is already doing?

  • Comment number 7.

    If i were Japanese, Malaysian or Phillipino i would be worried.
    An industrialised, modern China will look to empire as a sop to internal tensions brought about by the economic crisis.
    After all it has "sold" globalisation to its populace as the panacea and cant be proved wrong, so must instead blame the current woes on foreign governments.

  • Comment number 8.

    I can not help thinking your article in some ways is designed to provoke a protectionist attitude in respect to working conditions. You paint a picture of those that least complain working round the clock for a loaf of bread while others starve. We have known about Chinese work forces in southern china being taken advantage of for some time, and did nothing to correct that. We know that certain sportswear firms have be reprimanded for how they run factories in china and we know of factory bosses that just start up new factories every few months rather than pay the workers. Chinese labour regulations seem on a par with western bank regulation in this respect.

    This is only a picture of a small part of China and rural china pretty much plods along with all its corruption much as it has always done, while the big cities are not very different to cities anywhere else in the world. The question we should ask is, what was the dream that lured all those workers and what happens when all the workers give up on that dream. Once the work force becomes disillusioned they may walk away, leaving dwindling queues for work and eventually labour shortage. Its something Chinese leaders may want to start thinking about ahead of the problems it will cause to the economy.

    There are well run subsidiaries of western countries (Panasonic ) in China which we know are being significantly throttled back, so it will be interesting to see the effects from a different prospective when you get round to that. What I will congratulate you on is gleaning the information that it is the men who are loosing their jobs and I wonder if the same is actually happening in the UK. Suggestions that their will be some unrest are I think unlikely not least because it will be ruthlessly clamped down on.

    The other things I would like to see explored as you travel around are
    What happens in the black market in china ?
    How much of a problem is corruption and does it sap the economy ?
    Why does the stimulus focus on markets where there is no demand (soft landing rather than recovery approach) ?
    How much of the economy depended on investment flows ?
    Is the real estate industry in the perilous state some are depicting ?
    What really goes on in the murky world of scrap metal ?
    Who will buy the jaguars and land rovers that china aims to sell ?
    What is the truth about the claim that the Chinese save rather than spend ?

  • Comment number 9.

    Passing the capitalist baton from Britain to the USA took two world wars.

    Those who expect an orderly adjustment of the economic imbalances towards China are sure to be disappointed.

    War and revolution are much more likely.

  • Comment number 10.

    #7

    quote/If i were Japanese, Malaysian or Phillipino i would be worried. /unquote

    Their problem is also our problem. That's the nature of Globalisation.


  • Comment number 11.

    I see elsewhere in the news that China is to increase spending on its military, is this preparation for:
    (a) stamping down on militant action within china i.e. another T'ianamen massacre
    (b) preparation for a bit of empire building. after all they have one of the largest standing armies in the world so who could stop them
    (c) preparation for both (a) and (b)

    We shall just have to wait and see.

  • Comment number 12.

    Yes R.P
    Chinas' possible "Social and political tumult".....may happen here?
    Probably, but in a "British" way.
    However, this country is in a desperate situation.
    We are a world banking centre, and along with the USA, that fact has given us some of the biggest losses on the planet.
    European countries may be about to catch up with us via crippling international debt defaults.
    There may not be enough taxpayers in the world to pay for all these banking losses, so states will have to get together for a programme of "re-capitalisation" at an agreed rate, with sensible fixed exchange rates.
    I see no other solution...."money" has gone wrong...everywhere.
    Our fixation with property was always likely to cause a "doomsday" collapse, and that appears to have happened.
    All states must recognise this fact....another "Breton Woods" is necessary.
    Cheerful eh?
    Whatever happens, China must be at the forefront of things.

  • Comment number 13.

    laid off yesterday unfortunately will have to survive on £60 per week.8.50 a day i think i might struggle. the future frightens me who knows what we are going to end up with.

  • Comment number 14.

    Robert - Your last three paragraphs remind me of descriptions of early 20th century Russia.

    Bearing that in mind, your "what might happen next" implication will have more substance if you can determine, in China:

    a) what is the food situation, and
    b) what is the situation in the army?

  • Comment number 15.

    Come on Robert - the big news is the new land reforms that will permit sale of land to private customers rather than through the Chinese state - this is designed to stimulate economic growth in the tier 2 cities in China which have relatively less dynamic in recent years. Allied to the infrastructure projects such as high speed rail links it seems that China has the ability to respond to the current situation rather than just blame it on global conditions that started in the US

  • Comment number 16.

    There is so much injustice in the global economy. Manual workers have few rights, whilst
    the rich get richer. Globally speaking, not too much has changed over the past 100 years in terms of a just economic systems. The same dynamic is played out around the world. There is more than enough capital, however it is often in the wrong hands and not properly taxed.
    Concerning tax havens and offshore banking you can read more at:
    http://globalinsights.wordpress.com/2009/03/04/offshore-banking-and-tax-havens/

  • Comment number 17.

    UK consumer confidence 'climbs'

    Only 16% think that it is is a bad moment to buy goods like fridges
    Confidence among UK consumers rose moderately in February despite the weakening economic conditions, according to the Nationwide.
    Its Consumer Confidence Index rose by 2 points to 43 in February, recording its first rise since last October.
    The survey of 1,000 consumers showed that they became more optimistic about the future economic conditions.
    At the same time, confidence in the present situation fell for the eighth consecutive month in February.
    "The spate of bad economic news and reported job losses in major industries may have dampened consumers' perceptions of where we are now," the report said.
    Nationwide's Present Situation Index declined to 22 points in February from 24 in January, while its Expectations Index rose to 57 from 52 and its Spending Index increased to 92 from 85 points.

    This is pure "double speak" propaganda from a UK bank via the organ of the British state (the BBC)
    Robert, you don't need to visit China to experience a totalitarian state, we are getting our own version here in the UK!

  • Comment number 18.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 19.

    #7 "If i were Japanese, Malaysian or Phillipino i would be worried. An industrialised, modern China will look to empire as a sop to internal tensions brought about by the economic crisis."

    (1) China is, was, and always will be an empire !! There are more different kinds/races of people in China than the whole of Europe (East and West both). It also has more distinct languages that Europe despite the unifying official language - Mandarin or Putonghua

    (2) Despite having the technology and capability to do so, the Chinese empire had NEVER expanded overseas and has no need to ever do so !! Projections of Western Imperialist aspirations onto the Chinese mindset just does not work !!

    (3) 20 million unemployed in China is a mere drop in the ocean when compared to a population of 1.3 billion !! Try 5 million unemployed in a British population of 65 million !!

  • Comment number 20.

    Thanks for this insite RP. It seems crazy factories are left empty in such conditions. Surely it would be better to keep poeple active.

    As i've hammered on before, this is a world wide problem requiring a concerted world wide effort to get us out of it.

    Protectionism, or for that matter reducing Employees rights is not the answer.



  • Comment number 21.

    #11 (d) none of the above. They have embarked on a decades long shrinking and modernisation program for their armed forces. They intend to reduce the numbers of their armed personnel by half but increase their offensive and defensive capacity by many fold !!

    Despite all that, they still spend less that 10% of what the US spends each year on armaments !!

    This says a lot about either their financial efficiency or the US lack thereof !!

  • Comment number 22.

    credit-crunchy wrote:
    #7

    quote/If i were Japanese, Malaysian or Phillipino i would be worried. /unquote

    Their problem is also our problem. That's the nature of Globalisation"



    hi credit crunchy, sorry i did not make myself clear enough. Britain will only become involved if Australia becomes worried, because the action i am referring to is military action.
    Chinese seizure of the oil rich spratly and paracel island groups and maybe a pre emptive strike to prevent japanese naval forces intervening (plus alittle payback for 1931-1945).

    The US wont defend SEATO as china always has the nuclear stick.

    As far as globalisation is concerned im afraid thats a dead duck.
    Free trade too, i shouldnt wonder.

  • Comment number 23.

    I don't know why people are saying China won't plummet into social unrest and that the authorities won't be ruthless in its suppression.

    For cyring out loud, this is why the Tiananmen Square protest was quashed so bloodily.

    And remember the People's Republic came about after a long civil war, one which hasn't officially ended.

    If the Chinese erupt, then they'll do so in violence, not in some polite, wish-washy British after-you-claude sort of way.

  • Comment number 24.

    Robert, I was in Dongguan at this time last year. It appeared to be vibrant and full of people purposefully pursuing their dreams. What I did notice was the large proportion of Mandarin speakers there rather than the native Cantonese speakers. I think here is the potential issue.

    If these migrants do not have jobs or prospects of jobs, they do not have the local family network to help them through. Some will not be able to travel back and will be a source of trouble for the authorities.

    Despite Chinese being normally law abiding, in such desperate times, these migrants may well despair so much that they will cause strife.

  • Comment number 25.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 26.

    Another headline on the BBC today: China announces a "modest" 14.9% increase in military spening.

  • Comment number 27.

    Your article shows only half of the whole picture. Most of those thousands of unemployed young people were farmers, with a place to live in their village and no mortgage.

    Surviving is not a problem as they can produce their own food. They come to cities purely to earn more money and get some excitment.

  • Comment number 28.

    Hmm Protest by the ballot box - where do I join the queue?

    Oops sorry forgot that politicians are turning a deaf un.

    So protests and ritos it is then and looks like that may be glbal too.

  • Comment number 29.

    While we are on an Asian theme, there is an article about the IMF in this news website and it tell of the difficulties of the IMF in obtaining more funds.

    It mentioned SDRs which is a form of printing money but that is skewed to the benefit of the developed nations. It ends with these words -

    "However, it would significantly increase developing countries' access to international resources.

    It would be cheap.

    And it wouldn't require the approval of the US Congress.

    The same cannot be said of many of the other proposals floating around the G20."

    What this article seemed to have missed is that the Asian nations are leery of ever having to deal with the IMF especially after they disastrous encounters during the Asian Currency Crisis. So they have set up a competing organisation that sets fair to become the Asian Monetary Fund and it is back by all the cash-rich countries of Asia !! Therefore, the member countries of this organisation is far less worried about the future that the "West" !!

    It might also explain why the IMF is having difficulty raising the funds it wants if the cash-rich countries are boycotting its US dominated arrogance and setting up in competition !! Therefore, the G20 meeting in London in April will be very interesting !!

    Clash of the Titans or David and Goliath ??

  • Comment number 30.

    The interesting times in China are indeed terribly interesting.

    It seems a chaotic, enigmatic world especially when an unemployed Chinese worker is contrasted with an unemployed Scottish Banker.

    Mentioning none of the above names in either case for fear of being moderated out. ( Yesterday, after having been intially published, many stern but harmless posts were subsequently removed.)

    The initials SD come to mind. Think pre-1945 Germany. Or should that be today's China ?

    Do you speak any Oriental Languages Mr Peston ? If so does that allow you to get under the skin of the country you're in ?

  • Comment number 31.

    Thank you Mr Peston for graphically conveying the depressing reality of globalisation that our temporary PM so warmly praises.

    The truth is that globalisation is the mass and exploitative production of cheap goods shipped half way round the world to be trashed in a year or two having consumed vast quantities of cheap but unsustainable energy and posing an increasing waste disposal crisis that can only be solved by shipping the crap back!

    Globalisation is the antithesis of socialism, destructive of the environment and a threat to humanity.

    Have a nice day!

  • Comment number 32.

    Actually, the UK's problems are "All about Jobs", as you put it.

    It's just that the Government aren't bright enough to have worked that out yet. They think it's all about money, as every Government has done for the last 30 years. Because our Governments are financed by rich people in the City, that's all they ever prioritise. Allowing their rich chums to make even more money so that they'll finance the political activities that keep the party in power...

    For the long-term health of the country, the focus should really be on jobs. If everybody of working age has got a suitable job, the UK economy will automatically come right. If we've got an income, we can spend it. If people are losing jobs or worried about losing their jobs or unable to find new work, we tighten belts and the economy rapidly gets worse. It's a fundamental rule of life that drives the booms and bust...

    It seems to me that the Government is trying to fix the engine when the clutch is broken...

    Focus on the fundamental principle of job-creation Gordon, for everybody, not just apprenticeships...

    And genuinely "British jobs for British workers" please. No point creating jobs in the UK if they're taken by foreigners. That's not protectionism, it's common-sense...

  • Comment number 33.


    7

    the gricrim
    wrote
    After all it has "sold" globalisation to its populace as the panacea and cant be proved wrong, so must instead blame the current woes on foreign governments.

    xxxxxxxxxxxxxxxxxxx

    Sound familiar?

    Gorgon, I turn everything to stone, Brown

  • Comment number 34.

    It is a fundamental of economics, that when money is tight, conflict will always follow.
    This is even true in personal circumstances, when marriages break down due to lack of funds. Business partnerships break up, and corporate entities go into administration due to lack of liquidity.
    Nationally, we can change government or engage in civil upheaval, if no alternative policy is available to inject liquidity into the public’s pocket.
    There is only one possible outcome for China, it is civil unrest, but they have the army to handle it!
    Unfortunately, the Eurozone is an amalgam of national interests, operating in a quasi partnership relationship that is failing. The strong partners in the North don’t want to keep supporting the wayward members in the South via the Euro.
    Civil unrest, with unknowable consequences will visit the EU, if the Euro straight jacket is not released. Italy is not Germany, Greece is not France and Spain is not Holland. Realism, and a positive economic direction, has to be re-established very soon.

  • Comment number 35.

    The title should have read: "China: All about paying the correct wages for jobs"

    How can any economy survive if the people that manufacture the goods cannot afford the goods that they produce?
    As soon as exports drop, production stops.
    The mess that China currently have is all their own doing and are very shortsighted.

    This a door that currently only swings one way.

    China have to start paying decent wages to it's workers. This means that prices will increase on all goods and make a much more level playing field for international trade.

    Who knows, they even might want to buy some of our manufactured goods?

  • Comment number 36.

    Manufacturing and falling sales can also be attributed to people simply buying less.

    People are fed up to the back teeth of reading the adverts and the tin and the product not doing what it says it will. New phone, ? why bother with the hassle of trying to get the thing to make a simple call, 3g, video, email and a million other things but you cannot sort out the address book without a degree in engineering science. New computer, ok if you have a year to spare to work out the "progress" changes ?
    Perhaps the Chinese should look at quality and substance and the products might then start to sell again.
    I for one am sick of the product hype and finding the products do not perform, I will stick with my old products until they give out their last breath. Not good for Chinese manufacturing but much better for my sanity.
    I wont even mention the "Aftersales" either, or lack of it. Is it any wonder manufacturing is now suffering a major downturn.

  • Comment number 37.

    The astronomical growth in the Chinese Economy was the direct result of the unlimited greed of our large Chain Stores in the UK.
    Whatever they dealt in they stopped buying from British manufacturers and imported cheaper
    goods from China in order to maximise profits.
    Quality counted for nothing - profitability was the only criteria.
    As a result our manufacturing industries were
    damaged almost beyond repair.' Almost' is the
    operative word. Forget the weazle words of
    Brown. Instead Buy British, whether it be clothing or hardware, or else go without. Repair,
    mend and make do. We must do all we can to revive our manufacturing industries before it is too late.

  • Comment number 38.

    I an sad to read views by TOPCAT just now.

    Yep 60.50 pounds is what you are expected to survive on. Don't expect any competent professional help at the jobcentre. Their starting point is that all jobseekers are scroungers.

    Your national insurance contributions have been ring fenced to provide earnings and pension benefits. Current combined NI is 21%

    We used to have an earnings related unemployment benefit which Mrs Thatcher removed in order to punish the miners way back. I voted Labour assuming they would reverse it. It seems that they didnt get round to it.


    Meantime, in France the assumption is that if people are made unemployed they will be upset and traumatised. They therefore offer to soften the blow by giving 57% of salary for 2 years.

    Not sure about China, I'm wondering if Robert will give us the inside track. Percentage wise I'll be surprised if its a lot less than our allowance.

    Ohh. Do not let your bank know you have been made redundant. They have an internal warning system that ensures that no credit will come your way from them or any other financial institution.

  • Comment number 39.

    Can we first agree that both China and India need double digit growth just to stand still due to the drain on their economy from all the infrastructure development being carried out? Infrastructure that is desperately needed if China is going to develop into a stable and sustainable country. You would see that China’s population range from abject poverty through to obscene riches. So to answer the question will China be strengthened by adversity the answer has to be no, not in the near term. All that is going to happen is that the much needed works are going to be delayed, postponed or even cancelled with the vast populous suffering.
    Much of what we take for granted as our key services are yet to be established and without continued investment at a scale we can’t envisage the basics such as drinking water just will not be available. I can not remember who said that water will become the new oil but I fear that this could well be the case in China.

  • Comment number 40.

    Well done Robert Peston for getting out to China and offering some sort of snapshot of what is going on. It is very important that we get some views of the world beyond N Rock or Fred Goodwin’s pension. The level of international economic interdependence means we should have more not less first hand reporting of economic issues beyond UK ,US and few bits of W. Europe. Many people have recommended reading Galbraith’s Great Crash, but many more should read Piers Brendon’s superb The Dark Valley to get a better sense of interdependence, but also of diversity of response and experience in a global crisis.

  • Comment number 41.

    The majority of Chinese can never hope to have the same lifestyle as us Europeans, or the Japanese and Americans. There aren't enough resources on the planet. Like it or not, the world economy is predicated on about 10% being wealthy(ish), and the rest either in dire poverty or living almost subsistence lives. It's like a lifeboat that can only fit 10% of the ship's passengers. If everyone clambers on board it will sink and nobody will survive. The West got their lifestyles by plundering other countries, using slavery and imperialism to keep them economically poor and dependant on us to consume their goods. This was fine when none of them realised this, but the media age is now showing them exactly what's happening. The fear is that China will realise this and push us out of the lifeboat, so to speak. As the song says, 'if I hadn't seen such riches I could live with being poor'.

  • Comment number 42.

    Robert,

    What's the difference between a one party state and our own ?

    Watch parliament live anyday and you will see not a democracy but a charade. Our politicians are playing the democracy game only for their own benefit. We've reached the point now where it is pointless deciding which party we are going to vote for.

    If we waste time arguing over that, then they win again and we all lose. Sure, you might be tempted to join in on the misguided belief that
    you'll be better off one way rather than the other but the truth is, if you look behind their superficial arguments, all their ways are based
    on corruption and greed. Their own corruption and their own greed.

    It's misleading to talk of the ballot box as a conventional western safety valve.

    Safety for who ?

    Not for us, not for our savings that we WORKED for and which will devalue to a pittance of the value they should represent. That is a crime.

    Of course, I want to live in a ballot box world as much as you do, but only on the condition that we have a media that is not controlled by
    an elite whose primary goal is to perpetuate their own wealth. I would rather see social and political unrest than people conned into
    believing we live in a democracy.

  • Comment number 43.

    I guess this is not much comfort to them but the situation sound much like the accounts of what happend in the UK in the early days of the industrial revolution - and it took well over 100 years before society found a way of mitigating some of the worst impacts of the economic cycle - and we still have a long way to go.

    Hopefully it will not take them that long.

  • Comment number 44.

    As China was essentially providing a large proportion of the goods that the world was feeding on in the good times it seems rather logical that China will follow the world into this recession. There are the so called economic guru's that tell us that China's large peasant population will maintain China's prosperity. Obviously the same group of skilled advisors that could not see the current economic storm on their radar. Or the administrators of the UK housing market that keep forecasting a slight improvement, or green shoots, when in reality UK property prices will probably settle at between 40 and 50% of their peak value.

  • Comment number 45.

    Robert Preston's report (all about jobs) about what is happening to the Chinese economy where he presently at in China is about as insightful as if a Chinese person happened to be stood at Canary Wharf, on the day that Lehmans and other UK banks were making thousands of people redundant and reporting back to China on the state of the economy over here.

    It is no more than a snapshot in time of one aspect of what is going on.

  • Comment number 46.

    38. At 10:43am on 04 Mar 2009, anewworld wrote:
    I an sad to read views by TOPCAT just now.


    Should TopCat being rechristened BottomRat ?

  • Comment number 47.

    Whether we are talking about War or Currency Devaluation the fact is that China holds all the cards, the best hand and they can also see how poor our hands are.

    Nevertheless we keep on throwing in the big bluffs hoping they won't call us.

    There is no need for them to call us ......yet.

    They have the best hand - until we have used all our chips they are just going to keep letting us play.

    Then they will call us and the game will be over for the West and we will bow to the new masters of the world table.

    The cards are already dealt - the only way we can stay in the game is by folding now and saving some chips for the next hand.

  • Comment number 48.

    I am saddened that Peston has decided to become a street reporter in China. This is a demotion from the analytical editorial role he was valued for.

    His writing so far showed he has been fed opinions from the usual BBC foreign reporting crowd, and I hope he doesn't fall into that run of the mill stereotypical reporting of China which has so many ridiculous distortions.

    At the very least, he should research the plans of China's government in order to make intelligent deductions of how things may turn out.

  • Comment number 49.

    17. At 09:37am on 04 Mar 2009, NotoBene wrote:
    UK consumer confidence 'climbs'

    Only 16% think that it is is a bad moment to buy goods like fridges

    --------------------------------------------------------

    I agree with your sentiments 100%

    Are people really being stopped on the street to be asked "is it a bad time to buy a fridge?"

    Are they asking the same people month on month about their willingness to buy things?

    This research is total pish

    complete bs

  • Comment number 50.

    as the moderators are keeping up today, I'm reposting from yesterday, as I think some of my points are still relevant to the question of unemployment, which is fast becoming the main driver of the slump

    China is obviously going to suffer in the short-term from the severe drop in global trade but they have some key advantages over the UK:

    > they are able to implement a big domestic stimulus package very quickly - so huge railway and construction projects proposed in November are already underway! imagine how long it would take here.....
    > there is huge potential for their domestic economy and consumption to grow; here in the UK and US the average consumer is 'tapped out' and already exceeding sensible levels of consumption
    > Chinese unemployment rates are probably lower than here, as Ishkandar has surmised; 20m unemployed in China is probably only 3% of the workforce, though they won't have reliable unemployment figures (and neither do we by the way)

    There is still no sign of a stimulus package or job creation programme being put into practice here in the UK. I suspect the Chinese will do more and the unemployed can always return to their subsistence farming villages, where life will be tough beyond what we can imagine here, but it's at least somewhere to retreat to. Where are 3m unemployed Brits going to go?

    ----------------------------------------
    my previous post

    144. At 01:07am on 04 Mar 2009, somali_pirate_SP500 wrote:
    I agree with several others here that this Fred the Shred bonus story is just tabloid journalism and possibly a smokescreen intended to divert our attention from the governments continuing failure to get a grip on the crisis at all.

    So enough already!

    There are dozens of City execs who have been similarly given golden parachutes; we all know about the old boys networks etc and how politicians are in it up to their necks (see Blair and his 5m a year from JP Morgan to advise them... about what exactly); the remuneration committees all scratch each others backs; starts at the top with the ludicrous Honours system; it all should be swept away; until then turkeys remain unlikely to vote for Christmas

    Some of today's real stories:

    (1) Brown looks very ill at ease at Washington meeting and Obama was decidedly lukewarm in his confirmation of love of Britain; Brown refused to apologise or admit any connection to what happened in the previous decade, but Obama made a pointed reference to 'the mistakes of the past'

    (2) the ongoing AIG disaster - now bailed for the 4th time and for a total of $150bn with lots more to come; bet Obama isn't pleased that the London office of AIG wrote a lot of the CDSs and did it here so that they would be out of the reach of US regulation!

    (3) GM sales down 53%; warn that GM Europe will run out of money in weeks and go into bankruptcy unless we cough up a few billion to GM HQ to help with a split

    (4) HSBC needs to raise money to cover predicted up to $34bn loss at its American sub-prime lender, which they are going to wind down

    (5) still no word about the Lloyds toxic assets insurance deal with the govt; how much will it cost; how can they fiddle it to keep govt ownership under 50%

    (6) US house market continues to decline

    (7) main drivers of decline now seem to be to do with job losses and fears of unemployment - figure for Feb in US might be 750,000, which would be most to lose jobs in a month since WWII

    And despite all that our govt still can't manage to organise giving me an incentive to scrap my old car or put more insulation in the loft.

    No, they would rather put their efforts into the cynical destruction of the Royal Mail. Because the private companies and the free market has all the answers...

    says it all really

  • Comment number 51.


    If there is going to be conflict as a result of this depression then it is unlikely to happen in Europe - this time the stresses are in the middle east (about access to oil) and asia.

    The EU should consider the consequences if, as a result of economic pressure, China becomes aggressive to Taiwan or Korea. Far too much of global chip manufacturing has located in Taiwan and Korea, which may be efficient but is dangerous from the viewpoint of security of supply. The possibility of China taking over or putting out of action a sizeable fraction of the worlds most advanced chip manufacturing needs to be considered.

    It would be sensible to preserve chip manufacturing capacity in Europe even if it is making losses.


  • Comment number 52.

    #45: 'It is no more than a snapshot in time of one aspect of what is going on.'

    Fair enough, but isn't that one meaning of the word 'journalism'?

    One common criticism of our financial and analytical elite is that they fell so in love with the numbers that they forgot to look at the real lives and experiences of ordinary people. Isn't that why we value, among other things, the chance to read the comments here?

    There's a sad posting, for example, by someone who has been made redundant today; from a statistical point of view you could argue that that means nothing - individuals lose their jobs during booms, too - but it fleshes out the statistics in an important way. Similarly, it's all very well to watch the unemployment figures (or the data on share prices) from China, but they become much more meaningful in both emotional and analytical terms if you have some picture of those affected.

    When shares fall, we might easily just think of wealth being stripped from besuited self-made men - but the victims are, it seems, just as likely to be living not far above subsistence level. We think we know what job losses look like and about what impact they will have - but being given a snapshot of a life in which it is worth travelling thousands of miles to earn a few pounds a day - and in which even that income can then be lost - surely gives us a better sense of why all this matters, and how things may play out in the future.

    In the same way, I've never forgotten reading Steinbeck's account of a squatter camp in Depression-era America. He met so many families whose children had died of hunger that he could, in the end, guess how many they had lost just by looking at them. Having read that, the idea of the Depression - and the role it had in shaping, for example, American attitudes to money - became much more real to me. It still shapes my political instincts today.

    So - more journalistic snapshots, please. If we've never looked at the detail, the big picture will mean nothing.

  • Comment number 53.

    To No 42 Pavlov2009

    Agree with you 100 per cent. Latest example of one party state is the determination of New Labour to push through the part privatisation of the Post Office against the wishes of its members but with the support of the Conservatives.
    Bit like what's happening in USA today with
    Obama's "Government by consensus". It's no longer a question of "Government of the People' by the People, for the People" It is nakedly Government by Big Business for Big Business"

  • Comment number 54.

    Isn't that what Marx said? Slumps are inevitable (take note Mr Brown) but the outcomes weren't. He didn't say they would lead to the collapse of capitalism. That depended on whether the poor allwed the rich to make them pay for it. It depended on whether the workers rose up - or rolled over. My guess is that apart from a bit of unrest, workers here will roll over. But in China it might be different.

  • Comment number 55.

    The upside for the UK is the by-product of exporting a very large piece our manufacturing industry to China. In its place we have created a large service economy which flexes very quickly with the changing fortunes of the economy as a whole. When we pass the worst of the credit crunch and liquidity returns to the economy we should expect to see our fortunes change. Not so China who, in boom times took rural peasants from the countryside into the factories, today they are living with the consequences of the unemployment that the UK has effectively exported to them.

    China has also saddled itself with two other strategic problems. First, what to do about their financing of the US deficit. Second, how to deal with a grossly undervalued currency.

    Given the enormous size of the Chinese economy, their $420bn stimulus is like a pin-pick. If Obama pumps £1.3 trillion into the US economy then relatively speaking what should China being doing to get things moving. A lot more I presume.

  • Comment number 56.

    #49 tommybrusher

    yes absolutely, the survey is nonsense

    if they had asked these mythical consumers 'Is it a bad time to buy a washing machine?' instead of a fridge, then would they also have said 'No that reminds me that I need a new washing machine' thus averting the closure of the Indesit factory in N. Wales yesterday??

    it's like all of these 'changes in confidence' surveys that come out every other day; we will soon see them all starting to say 'confidence up!' or 'loss of confidence slowing'; this mumbo-jumbo, coupled with the fact that few journalists can understand basic % or statistics, makes for a right dog's dinner of fake facts, even on the BBC

    strewth

    rant over

  • Comment number 57.

    There has been significant inward investment from overseas over the last ten years and not just the traditional west

    The most recent edition of the economist indicates that
    a) the 12 month trade balance was $314,000,000,000 (the end of Jan edition says $295,000,000,000)

    b) current account balance is $371,000,000,000

    c) 10 year bond rates are higher than for the US

    d) three month bond rates are higher than the US

    China holds about $1 trillion of US debt

    So it seems to me that at a macro level, China is better placed to weather the storm.

    In fact, if you look at the stats for Germany, Japan, Canada, Russia, Netherlands, Norway etc. they are much better placed.

    At a different level
    There is a population of about 1.3 billion.
    They all need food and shelter
    Many aspire to the better personal economic and social conditions
    Its a huge geographic area.

    How the Chinese manage these challenges will be interesting.

    The primary questions I think we should be asking are

    a) 'what will happen if the Chinese decide not to renew US debt'. If they don't, they have additional domestic resources but the consequences will be higher interest rates and inflation. If they do, domestic activity might be more limited; and

    b) 'how will they manage the challenges of domestic demand with few natural resources'; and

    c)'how can increases in domestic demand be reconciled with the environmental consequences'; and

    d)' has a focus on engineering skills at the heart of government contributed to China's recent successes.

    Finally, I think that it might be instructive to consider the range and depth of economic activity. Basic manufacturing is only one part of this huge economy. For example, I think big global companies are placing R&D facilities there. Manufacturing is high and low tech and not to get hung up on banks again but Citibank, ABN Ambro, BNP Paribas, Standard Chartered and HSBC just for a start, have big presences.

    Its unfortunate but I think true that the Netherlands own the part of ABN Ambro in China.

  • Comment number 58.

    Any chance of trying to find something, (anything) positive for a change? Every day its the same. Maybe we should just all sit in a dark room and throw the tv out the window.

  • Comment number 59.

    "Meantime, in France the assumption is that if people are made unemployed they will be upset and traumatised. They therefore offer to soften the blow by giving 57% of salary for 2 years. "

    REALLY?

    That surely can't be ustainable in times like these?

    It's a lovely sentiment tho... And his wife's a supermodel!

  • Comment number 60.

    TopCat1802 wrote:

    "I see elsewhere in the news that China is to increase spending on its military, is this preparation for:
    (a) stamping down on militant action within china i.e. another T'ianamen massacre
    (b) preparation for a bit of empire building. after all they have one of the largest standing armies in the world so who could stop them
    (c) preparation for both (a) and (b)

    We shall just have to wait and see."


    You don't understand the Chinese mentality.

    (a) will not happen this time around because of the economic progress that has benefit the Chinese.

    (b) This will only destroy their economic progress as their economy is export driven. They don't have that kind of imperialistic mentality that characterizes the US. It is the US that has been selling that idea because they see China as a threat which exists only in their mind.

  • Comment number 61.

    I saw this happening a while ago. If people in the West are spending less on things they don't need, then this means less revenue for those who make these things that people don't need. Businesses may also try to renegotiate prices with the suppliers to save on costs on already cheap items, which obviously means that the suppliers will lay off workers or cut salaries, again to save costs.

  • Comment number 62.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 63.

    47

    At the end of the day someone has to cash all of those chips. Ummm. You ship me loads of stuff. I give you loads of bits of paper that say I owe you money. Wouldn't you look silly if I decided not to honour those bits of paper ? So silly in fact that you might be forced to do something pretty dramatic about it.

    These imbalances have occurred as a consequence of mismanagement by the Chinese AND the West. Both parties need to get together to restore the balance. Otherwise there will be an even greater mess. And maybe the next mess will be sorted out with rockets and guns.

  • Comment number 64.

    At least you are beginning to see the global consequences of your recent journalistic effort. Mr Peston you are so far out of step with reality, we knew it was necessary to make adjustments in the way we approached our financial responsibilities, but I will not forgive you or the rest of the media for taking away the hopes and aspirations of the hard working majority for the foreseeable future. You unleashed this monster and you have done little to assist its recapture.

    My father's career and early life was destroyed by the combined impact of the Great Depression and World War II. The media has been responsible for delivering the prospect of further global social disruption on a far greater scale than previously encountered.

  • Comment number 65.

    #50. somali_pirate_SP500 wrote:
    "as the moderators are keeping up today, I'm reposting from yesterday..."

    Even though it has no relevance to the discussion topic?

    I wish fewer people would use this blog as a place to sound off about their own little bugbears. It would allow the rest of us to engage in proper discussion about the topic.

  • Comment number 66.

    For all the supposed wonders of a "Global economy, the benefits have really not been passed on to the masses anywhere. Here is the U. S. our manufacturing jobs were exported with the promise of new "jobs of the future" to replace them. No one has been able to discover what these future jobs were. As for the benefits to consumers, a pair of Levis has not gone down in price , while the cost of production in China is a small fraction of what iit was here. More money just stays in the hands of the capitalists. It is very ironic that in the worlds largest remaining "communist" country the masses are wage slaves to the capitalists. Mao would be overjoyed I'm sure. By the way what exactly makes China communist now?

  • Comment number 67.

    You can complicate things as much as you like, with financials, GDPs, global markets whatever.

    The fact of the matter is that there are too many people on this planet.
    Our population has been artificially stimulated and supported for hundreds of years with 'advances' in science/medicine/food production etc.

    Simply put, in any eco system, if there is not enough food/water for a particular species, then the population of that species must reduce.

    The continuing arrogance that we 'own' this planet is a fatal flaw, and one which we are currently reaping handsomely.

    The solution is equally simple - stop producing so many babies. This planet cannot afford it.

  • Comment number 68.

    #54

    Indeed, slumps are inevitable because capitalism by its very nature is unstable.

    This is what Marx's Capital shows.

    Who else has an econimic model that has boom and bust as integral?

    There is also the question raised by Rosa Luxemburg as to whether capitalism brings about its own end by incorporating/destroying the non-capitalist elements of this world, e.g. Chinese peasant labour, that it needs to realise its surplus value.

    For Rosa, capitalism has to loot to continue to accumulate.

    If she is right capitalism may be hitting the buffers.

  • Comment number 69.

    I’m inclined to go with post 17 and subsequently also 49,


    The rantings of these banks / government doolies ‘Mrs Green Shoots’ are nothing more than insulting to the average Joes intelligence. There is a direct correlation with Pestons blogs (Otherwise known as government press releases) and these utterly factious ‘surveys’. I mean, if you need a washing machine for examply, you are going to buy one regardless of the economy. On the other hand one might NOT buy a new car or house because of the economy.

    It just goes to show that the survey itself apart from being false, is also irrelevant!!!

  • Comment number 70.

    50. At 11:52am on 04 Mar 2009, somali_pirate_SP500 wrote:

    'And despite all that our govt still can't manage to organise giving me an incentive to scrap my old car or put more insulation in the loft. '

    Our Govt would tell you:

    1. Get on yer Chinese bike and stop yer whinging ! Green and healthy too ;

    2.You are lucky to already have insulation in the loft. Or indeed to have a loft at all.

    Roll on Summer.

  • Comment number 71.

    There appears to be a lot of senseless ranting on this blog- Reporters can only report on the facts and as long as accurate information is imparted nobody should complain.

  • Comment number 72.

    I am a Chinese just over there the blogger mentioned,Shenzhen city,just neighbouring next to "Dongguan".

    Yes,the writer says all true,but he is after all a foreigner,so it's impossible for him to know all the whole sad story.
    Why can't you tell since you are a Chinese??
    No,sir,it's dangerous for us to say deeper for political reason.

  • Comment number 73.

    I am sorry Robert, but I felt compelled to respond to this article. You paint a picture of exploitation, terrible conditions and the dawn of civil war.

    I work with the factories in Dongguan, the pace of work here is exciting and motivating, yet you suggest this is done just to fulfil a dream? Wage of $5.60 is can provide a comfortable when accomodation/meals are free, when I work in the factory developing products, I sleep in the spare dorms and eat in the canteen - food is fine. To put things into perspective, a can of cocacola costs 10p where as UK it is 60p.

    A factories most important asset is the people who operate it.

  • Comment number 74.

    #38 annewworld

    I too am sad to see the writings of TOPCAT, but according to our Government he (or she) simply doesn't exist!

    Apparently the jobcentre is full of vacancies and professional staff 'willing to assist' and there's even 'help with paying your mortgage'.

    This is yet another example of politicians being so out of touch it's like being on a different planet. I ask any politician "When exactly was the last time you visited a job centre to LOOK FOR A JOB - not simply in a pre-prepared cheesy visit you do oh so badly"

    The answer is MOST politicians have never had to sign on, partly due to the fact that most of them are over-privileged spoilers who have 'chose' politics because they could never actually work in a factory, or on a production line because they would be found out as the 'useless members of society'.


    I haven't been unemployed for many years now, and it sounds like things haven't changed and in fact are getting worse.

    I can't wait until all those tax-payers who are now redundant realise that their contributions over the last 10 years were not spent on insurance for if they loose their job but instead were lavished on a war nobody wanted and to purchase MP's second homes for them amongst the usual wastage that goes on with tax payer money.

    They will understandably be very cross.

  • Comment number 75.

    The bad situation is Guandong province is much worse than elsewhere in China, bad though that may be.

    The reason is that there were more factories making the cheapie s..t which suddenly stopped selling.

    At least its warmer down south in China so I guess that's why Robert went to regurgitate what is well documented.

    Thing is though that China has the CASH to sort out problems. Contrast that with a well known island race off the French coast......

    Interesting that Brown's visit to the USA is ignored out here but much coverage of HSBC and also USA/China relations.

    Even the cricket probs in Pakistan gets more coverage even on CNN.

    Anyway at least RP can get a cheap watch or t-shirt in Shenzhen.

  • Comment number 76.

    #59 - its true - its covered by an Insurance tax that all employers have to pay - rather than here where the Employee pays the majority of the taxes in France the Employer taxes are much higher and include things such as redundancy cover.

    Kind of takes the worry out of being employed doesn't it!

  • Comment number 77.

    Robert all this Chinese stuff has got me thinking. Are you a spy for that magnificent entity that is UK plc? Only James Bond gets to travel like this. I've long suspected that your contacts are deeper and more mysterious than you make out. Do you have a white cat? Are you planning something 'big'. If so tell the blog first, we don't want to read about it in the Sun.

  • Comment number 78.

    Re: 52

    My comment about a snapshot in time was not intended to be a flippant remark about the sad and hopeless situation that many honest people now find themselves in, through no fault of their own.

    Let me also say that whilst I agree that any journalist's snapshots are worth lreading it is important to remember that it is just like having one piece of a jigsaw. And without knowing the composition of the jigsaw or how many pieces there are, one shouldn't jump to too many conclusions too soon.

    Finaly for what it is worth I experienced what some people are now experiencing in the 1980's.

  • Comment number 79.

    as much as i consider this trip to be worthless and a waste of licence fee payers money.

    i do feel sorry for the chinese and the state of their economy where the rich get richer and the poorer get poorer and stay poorer

    controlled by a communist regime where freedom of speech doesnt exist.

    communisim is as much to blame as capitalism for the state of the world economy.

    chinas economy is a big a economy ,but it doesnt benefit the majority and never has done.

  • Comment number 80.

    If you go to those eastern and southern coastal areas in China, you can see mobs of people looking for jobs every year. Chinese population is too large and economic gap between areas is big too, so as Chinese won't be so surprised at the scene, many Chinese have such experience --- graduated students, job losers, better job seekers....

    This year, the job market must be more serious but it's fine. Chinese are diligent and tough and most of them have savings, so they can take care of themselves. Besides, the government has issued many ways to increase the job opportunities, encourage personal business, and foster working skills, etc. Everything's gonna fine. We should be confident.

  • Comment number 81.

    37#
    "the weazle words of Brown"

    I've forgotten, what were they?

    Chinese exports are/were a problem on a Global scale, everywhere you travelled you encountered 'Made in China', to name but a few countries that I have knowledge of ,USA (China's biggest customer) Canada,Thailand,Indonesia, Australia and the EU countries and I am sure many many more besides.

    Having said that, protectionism is not the way to go and especially not for the UK.

  • Comment number 82.

    Robert you're missing the biggest financial story of the year, on BBC Radio 4 right now

    Matt Crawford has been arrested by the Borsetshire CID on suspicion of running a Ponzi scheme and defrauding a bank of 5m whilst insolvent!!!

    arrested at dawn and his house searched

    Tom will never get the investment for his sausage business now

    And more to the point why couldn't we get the Borsetshire police and Archer's writers to replace the FSA and investigate RBS et al

  • Comment number 83.

    I am so glad my grandparents had the foresight to emigrate; else I would be one of those million of men without a job (and a wife, for that matter).

  • Comment number 84.

    #64 bobfrombev

    are you one of those Northern Rock shareholders whose 'human rights' have been infringed?

    perhaps you should be off to Darfur - I hear the cost of living is quite low there; very affordable in fact

    the media is also responsible for the West Antarctic ice sheet starting to melt; it reads the broadsheet papers you know

  • Comment number 85.

    Rosa Luxemburg:

    "The more ruthlessly capital sets about the destruction of non-capitalist strata at home and in the outside world, the more it lowers the standard of living for the workers as a whole, the greater also is the change in the day-to-day history of capital. It becomes a string of political and social disasters and convulsions, and under these conditions, punctuated by periodic economic catastrophes or crises, accumulation can go on no longer"

  • Comment number 86.

    #49 Tommybrusher



    ...but the really frightening thing is that the Government pick up these failed statistics and the produce POLICY BASED ON THEM!

    That means the 5 people the surveyors asked (of which 1 said it was a good time to buy a fridge) are effectively running the country.

    I've seen these 'on the street surveyors' only people who have 'time to waste' actually bother to stop and complete them.

    Is this representative of society?

    If the Government wanted to one good thing in it's time then it would devise a way of accurately gathering total public opinion before it even starts thinking about making policy.
    It couldn't realistically do this before but now it has technology to help it should be easy.
    Instead of road building and bank bailouts the public money would be much better spent on achieving this goal.

    However of course it would never do that as the first thing Government might discover from it's first 'real survey' is that the public don't actually want or need the Government and it's surplus to requirements!

    The manipulation of statistics is a current news story as the ONS is currently arguing with Government over immigration figures (1 in 9 people being a foreign national).

    This is a clear indication of the manipulation of the information provided to us for reasons that are not neccessarily in the public interest.

    ....which is exactly what Hitler, Stalin, Pol Pot, Mussolini and just about every other dictator did to control the populations minds.

    - and you all thought this was a Democracy!

  • Comment number 87.

    That's right Robert. Go to China and spread even more of your doom and gloom.

    Dontcha just luv it!

  • Comment number 88.

    @67

    You are correct - there are too many people. Just look at the UK - part of our "problem" is over crowding - high cost of living (and part of the property boom) is a lack of space, our roads are crowded and our infrastructure is packing up, not just due to lack of investment or innovation but to pure volume of people. We criticise the Chinese for their 1 child per family policy but maybe something like that would benefit the UK

  • Comment number 89.

    #70 amused2death

    you are right of course that we all need to get on our bikes and not whinge

    I do have a bike and hardly ever use my old car, which I'm thinking about scrapping and not replacing anyway

    my point was that govt incentives to replace old cars and insulate houses would be generally good for UK employment and help the environment (although I know there are complex arguments about the cost of making a new car vs the higer emissions of an old one)

  • Comment number 90.

    from the BBC News website:

    'Harriet Harman has admitted wrongly telling MPs that the ex-banking boss Sir Fred Goodwin had received his knighthood for charity work. Labour's deputy leader made the blunder as she stood in for Gordon Brown at prime minister's questions. The official record shows the former Royal Bank of Scotland chief was knighted "for services to banking".

    --------------

    Dear Harriet

    In light of the above would you consider awarding me a Knighthood for 'Services to Piracy'. I have worked hard at pillaging and stealing for many years and have given some of my loot and much of my time freely to charities such as the Dead Man's Trust and Bottle of Rum Hospice.

  • Comment number 91.

    To No. 64 Bobfrombev
    "Forewarned is forearmed" is a maxim that has proved its worth throughout recorded history. On the other hand the Ostrich syndrome has been proved useful to no-one , not even to the ostriches who started it. Chances of survival are best when you know what the enemy is up to. Least good if you adopt the "bottoms up" posture. Robert Peston does
    an excellent job of giving us the low down.




  • Comment number 92.

    The comments of quite a lot of people here are reflecting their understanding of China is still staying in 1989. Typically 2 problems I found :

    A. Naive
    There is amusing comments like 'China have to start paying decent wages', 'Chinese should be able to buy their manufactured goods', 'Most of those thousands of unemployed young people were farmers, with a place to live in their village and no mortgage.'
    People here must understand some very basic harsh facts in China :
    - Medical bill in China is so expensive that simple operation like removal of kidney stones is equal to 3 years' salary of an ordinary worker. There is more people in China died on the surgery table because they cannot pay the medical bill upfront to the hospital, than people died because of hospital's facilities problem.
    - There is 200 million migrant workers in China. Almost everyone's dream is to build a new house in their hometown which typically cost ~4000 pounds, or pay their medical debt, do you think an iPod factory worker will really buy an apple Ipod, when he has the choice of a domestic cheap MP3 that only cost $12 but with 4GB flash ?

    B. Ignorant
    Some people here feel that China will have severe turnmoil, similar to the 1989 Tianmen Square. This is wrong. The situation is unlikely to make Tianmen square tragedy repeating because :
    1. Chinese government is vigilant now that they know their propaganda machine need to keep telling people they are clamping down corruption, despite it is still a lip service
    2. price of the commodity is not rising so fast that the middle class cannot make their ends meet.
    3. the privatization of state enterprises has slowed down that workers know the Government has no imminent need to make more state enterprises bankrupt.
    3. there is no big difference of opinions amongst the leaders in China
    It does not mean people are not angry towards the corruption in the Chinese government. But compared to 20 years ago, bolshy educated people can more easily go to other countries to find job, rather than fighting in the street, and uneducated people can more easily have their ends meet given the society now has more different kinds of jobs compared to 20 years ago.

    What the comments to China now, is similar to the comments made 20 years ago to Japan : can't understand why the Japanese can be living in rabbit hutch ?
    Similar to Japanese asking foreigners to have an experience in their "rabbit hutch" (which is where I am living now) we need to ask people why not have an experience to live in the dormitory of an university in rural places of China. I have this experience. It is really an eye opening exercise

  • Comment number 93.

    This is a learning curve for every country even China.

    Globalisation in theory is sensible but so is every country's efforts to have a balanced economy.

    The whole problem stems from the lack of balanced economies across the world and the exploitation and greed of those who have been running things.

    As your article suggests it is this lack of balance in western countries and the meteoric rise of cheap exports from China that is responsible for this world crisis.

    Until the balance is redressed there will never be proper and beneficial to all global trading.

    Sorting out the financial regulation for the future can then be addressed.

  • Comment number 94.

    Peston.

    What happened to the tie ?

    I don't care if its 90 degrees F and none of the locals are wearing one, you're British man, British.

    Boost the local economy by buying one immediately.

  • Comment number 95.

    So you've discovered that the manufacturing base of the world is slowing down? And this is news?

    What no one seems to of developed is any sense of policy and direction as to solutions to the world's woes. I keep hearing 'this is a world problem and we need a world solution' being repeated over and over by parrot posters on multiple forums with no mention as to what the actual solutions are. Perhaps it's a secret and just before the next election they get rolled out. Although I suspect that after 10+ years of doing nothing except watch their economies grow completely unaided (code for prudence) politicians have ne real idea on how to manage and affect change any more.

  • Comment number 96.

    " .... which, in a one-party state lacking the conventional western safety valve of protest via the ballot box, could turn this economic debacle into social and political tumult".

    The problem here in the UK is that Gordon Brown is failing to hear the mood music himself. Let's hope our 'western safety valve' is allowed to blow soon. Meantime, watch out for street protests around the G20 summit, I guess.

  • Comment number 97.

    71. At 1:15pm on 04 Mar 2009, DEARLEADER wrote:
    There appears to be a lot of senseless ranting on this blog- Reporters can only report on the facts and as long as accurate information is imparted nobody should complain.

    Sorry DEARLEADER, We the poor oppressed proletariat can only voice our grievences through RP's blog as the BBC's "Have your say" only has bland topics. BTW How's the global recession affecting your country?

  • Comment number 98.

    I've closed and cleared quite a few factories in the UK and USA in my time ( '60s through to 2000), mostly because the technology had moved and, on for various reasons, the new products were being made by new companies in different buildings, but mostly still in the UK or USA.

    The difference between then and now for the UK is that we are seeing the last vestiges of UK manufacturing closing and there will be no replacement of any kind in the UK. The same situation also applies to the USA.

    The world economy will get back into supply and demand balance for manufactured goods in a couple of years and by them there will be very little manufacturing left in the UK. The Government will need to find out how we can all earn a living opening doors for each other , or perhaps taking in each others washing as did the inhabitants of Sans Serif.

  • Comment number 99.

    #78. Sorry - I was probably being pompous!

    The truth is that I've more or less given up on thinking I really understand the big picture, so am quite possibly over-impressed by local colour.

    I do get wound up by all the moaning in these posts about the cost of sending journalists out to China, though. If the BBC can subsidise Jonathan Ross's career as a phone pest and send out scores of tongue-tied ex-sportsmen to cover the opening ceremony at the Olympics, I don't see why they shouldn't fork out for someone to actually do a bit of research.

  • Comment number 100.

    I do not think things will be very different all over China, but rural China will be plodding on as usual until those that left to seek fame and fortune return. It will be interesting to see how so many millions of people will adapt. I am relatively certain that enough wealth has been created to self generate in terms of demand and production within some Chinese cities. What remains to be seen is how communism will compare to the new found capitalist promise when equality will be in question. Simplistic I know. Another problem might arise once the Chinese regime has a little social unrest to cope with if they do not have a welfare net. If they placate by stimulating building and manufacturing will they pull out of investing in the West to a significant degree? If part of the sovereign wealth fund dries up and loans are called in even more, is the West about to develop a full blown migraine instead of a bad financial headache? Is this why the Americans are making friends with China( I have not forgotten Gordon)....god help the tiger, it cannot cure everything.

 

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