Author: antimatter

The new concept of "Imposed Domestic Consumption" by the government [Copy link] 中文

Rank: 6Rank: 6

Post time 2008-12-31 13:53:49 |Display all floors
Originally posted by melon1008 at 2008-12-31 13:44
It is hard to control the "credit card consumption". Since it is still new in Chinese consumption, some policies are not complete. If we encourage too much or advocate on consumption by credit card, the bank will suffer a lot from the unreasonable consumption.

There is a conflict between consumption and energy-saving.

Now on one hand we call people to saving energy, and not wasting, on the other hand we call people to consume. It is hard to control. I think we have to control a proper balance between them. We have to encourage "reasonable consumption" not advocate on "wasting consumption".



I don't the bank would have too much risk because it give you credit base on your income level.
for example, let's say you are a poor person, the bank give you $10,000 yuan credit limit and you spent it all.   I don't think it's too much risk. I am sure you can pay it off that $10,000 yuan in 2 or3 yrs at worst.  you would not default on that loan, unlike the houses.  The bank would have aliitle risk.  even if you can't pay off the loan in 2 or 3 yrs, maybe 5 to 6 yrs. No problem.

The main goal is enough consumption to create circulation of economy. Even if some waste are involved.
It's a tradeoff

Use magic tools Report

Rank: 6Rank: 6

Post time 2008-12-31 14:03:57 |Display all floors
Originally posted by melon1008 at 2008-12-31 13:47

From your words, I find that you do really want the people live a better life. So the most important thing is to improve their earning, not the consumption. If people can afford the things and they are rich, of course they will consume. So in my opinion, we have to think out how to make people richer, and live a better life. We have to think out some ways to deal with the unemployment. After we improve the people's earning, they will consume accordingly


I consider from the standpoint of making China economy stronger. less of individual having a better life.
Your comment of "As for improve people's earning, they will consume accordingly "is really a chicken and egg question.

If people don't spend, then they have no jobs and can't improve their lifestyle. You have to spend first in order to get the national economy going. Sacrifice a bit individually for the good of the nation.
They have a saying in the west " Spend your way out of economic recession problem".  
the west 's style consumerism is what China needed without its excessive housing bubble.

Use magic tools Report

Rank: 6Rank: 6

Post time 2008-12-31 14:21:20 |Display all floors
Originally posted by idiot8 at 2008-12-31 13:48
What about the lowest level of society, you really want to put them into debt that they might never be able to repay?


Even if you were lowest level of society , you still would get a job at some pts  of your life. Once you have a job. Your social security number would be cross-referenced to check how much debts you have. Your monthly salary would be automatically deducted to pay the debts. Even if you have a very low salary. the deduction is a percentage.

Use magic tools Report

Rank: 4

Post time 2008-12-31 14:50:21 |Display all floors
Originally posted by antimatter at 2008-12-31 14:21


Even if you were lowest level of society , you still would get a job at some pts  of your life. Once you have a job. Your social security number would be cross-referenced to check how much debt ...


So assuming you are one of the 500 million people in China who make a less than average salary(China has a workforce of 800 million).  You make 10,000 yuan a year.  As of right now people you are not able to save very much and spend all your money on your housing, food, and medical bills.  Now the government comes up and gives you 10,000 yuan.  An extra years salary! But then forces you to spend it on things you do not need.  

Your stimulus helps some part of Chinese society but perhaps not you.  I would assume such a spending package would be very useful in raising peoples wages on average but in practice the people who make microwaves would do great but the people who work in restaurants would not.  

Those 400 million poor people who did not receive a direct boost would not be indebted a full years salary to the government and half will likely never get out of debt and will pass it on to their kids.  I am sure a new microwave will quell their tears.  

Interest is hell, but without it no one would pay off their debt at all and the banks would lose all their money.

[ Last edited by idiot8 at 2008-12-31 02:53 PM ]

Use magic tools Report

Rank: 8Rank: 8

Post time 2008-12-31 15:04:01 |Display all floors
Originally posted by interesting at 2008-12-31 13:33
Lost,

Such policies always just make life harder for the majority while enriching a minority of the people. Usually these things are argued for on national pride grounds and tend to be most actively followed in the least cosmopolitan circles.  



Hi.This is actual example that firmly proves my idea that I suspect Chinese government official performance.

I support the 4 tril policy but I am warried about the government implementation can not achieve the results that they want.

As for the giving rebates policy is beneficial to minority but the majority has to drink cool wind in this booming consumption.
Live in the movie!!!!

Use magic tools Report

Rank: 8Rank: 8

Post time 2008-12-31 15:21:18 |Display all floors
Originally posted by antimatter at 2008-12-31 14:03


I consider from the standpoint of making China economy stronger. less of individual having a better life.
Your comment of "As for improve people's earning, they will consume accordingly "is really a chicken and egg question.  


Younger man:

I have to intervene into your discussing with Melon.

Your starting point in this issue is correct,Ok,I agree with you.But you forget the importance.

What your said is the intention of this policy. That is "Make our economy stronger".In other words to say that is "Stimulate domestic consumption".Why our economy is weakening? Because of unemployment. Why there are more unemployment?Because of crisis so many foreign companies are buckrupt and exporting is shrunking.

Why we should establish this policy ?Because of high unemployment.This is root cause.

So,The method is " giving rebates "  which can increasing the consumption. that is not meaning it can increasing more jobs.

We should consider how to reduce the risk of this policy.
Live in the movie!!!!

Use magic tools Report

Rank: 8Rank: 8

Post time 2008-12-31 15:28:07 |Display all floors
Lost,

Using government to pump money into the economy is classic Keynesian economic policy; I don't have any major gripe with any of that. The problems start when you create preferential treatments with government money, trying to privilege certain consumers or producers over others.
"Justice prevails... evil justice."

Use magic tools Report

You can't reply post until you log in Log in | register

BACK TO THE TOP
Contact us:Tel: (86)010-84883548, Email: blog@chinadaily.com.cn
Blog announcement:| We reserve the right, and you authorize us, to use content, including words, photos and videos, which you provide to our blog
platform, for non-profit purposes on China Daily media, comprising newspaper, website, iPad and other social media accounts.