James Surowiecki: Why the Chinese Don’t Spend
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December 1st, 2009 by AdvisorAnalyst
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James Surowiecki, New Yorker columnist answers the question about China’s under-consumption.
“China makes, the world takes.” For decades, that has been the motto of the Chinese economy, which is built on providing an endless supply of goods for the rest of the world to buy. But these days there’s a palpable sense that this needs to change. Barack Obama, on his recent trip to Asia, called for a “rebalancing” of the world economy, meaning that China should save less and spend more, while the Chinese President, Hu Jintao, stressed his country’s “vigorous” efforts to promote consumer spending. Everyone wants Chinese consumers to spend more. So why don’t they?
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