LilBob

Can China Convert Itself into a Consumer-Based Economy?

Stimulating growth in consumer based economies is the great white whale of those who promote Globalization. One of the side effects of globalization is an averaging out of incomes for working class peoples in all participating economies. Consumption growth in the developing world will never over-balance declines in sales in the developed nations due to the fact that the wages paid to developing world workers will never reach the level that developed world workers were receiving prior to the advent of globalization. The pool of existing capital is insufficient to maintain current sales expectations. Hopes of infinite sales growth in the developing world are just like hopes of ever-increasing real estate values ca 2006-based on false-promises and irrational exuberance.