Amid all these financial crisis, I will fly to Shanghai tomorrow: not to rescue the economy but I will get first hand glimpse on China economy. Shanghai is the economy center of China, just like New York is the financial center of the US.
The mood in the US is not good. The Big 3 car makers are still waiting for the emergency fund from the White House and Treasury. The governor of Illinois is allegedly involved in “selling the president elect’s senate seat”, things we usually heard from developing democracy. This incident also put some clouds on the president elect’s leadership. Leadership? Did we ever see any leadership in this country lately, except bailout the Wall Street guys (Bear, Fannie/Freddie, AIG, TARP, Citi,…).
Interestingly, today when I was doing some shopping, I found it’s diffcult to find a parking spot. Recession? What recession? People are still buying stuff. But people are much more cautious and withholding the cash (if any). Last month (Nov08) was the first month for a long time the American paid down some debt.
Back to China, I know the goverment is putting up a giant stimulus program, let me label it “Caterpillar + Cummins” program (for fun). But I was skeptical of its effectiveness in terms of develop real economy: it will put more people to work, but it does not the fundamental problem in China: lack of middle class or middle income pople. One problem in US in last 8 years is the real income growth for middle class is Null. China’s leaders are aware of the problem, but they have limited options. Employment and social stability are No. 1 priority, effectiveness, fairness, everything else comes to the second. But I think Chinese people, like American people, are optimistic people, they believe the next generation will do better than them. They work hard.
That’s the reason I am hopeful things will eventually turn around. I just need to be patient.