Saturday, January 30, 2010

Made In China



Components of wind turbines at a factory in Tianjin, China. Link.

 TIANJIN, China — China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world’s largest maker of wind turbines, and is poised to expand even further this year.
China has also leapfrogged the West in the last two years to emerge as the world’s largest manufacturer of solar panels. And the country is pushing equally hard to build nuclear reactors and the most efficient types of coal power plants.
These efforts to dominate the global manufacture of renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.

Isn't that a nice howdy-doo. I weep for this country. We've got bigger problems than the current depression. When what used to be the largest penal colony on earth kicks our butt up one street and down the other, something is really wrong. I could list half a dozen things wrong here in the U.S., but China has them all, and more. I'm perplexed. One possibility is the savings rate per person. In China it's 40%. Here it's almost zero. When you have serious savings you can go out on a limb and try something new. It seems like Americans need to borrow money for their next meal. Sad.

2 comments:

  1. The savings rate is actually China's biggest economic problem. What it means is that Chinese don't consume enough to keep China at near-full-employment, and thus they're basically *forced* to export or else have social disorder as unemployed people start starving (since China has no such thing as unemployment insurance, Medicaid, food stamps, etc.).

    A high savings rate means there is a lot of money available for investment, that's the only good thing it does for an economy. If the U.S. had a shortage of investment capital I'd be concerned. But the facts do not support the notion that the U.S. has a shortage of investment money -- indeed, our investor class has been enriched so much by Reaganomics that we appear to have *too much* investment money going around, it keeps causing asset bubbles. The U.S. savings rate is now up to 6% so we're not at the "near zero" level anymore (actually we were at a *negative* savings rate for a while there), but I haven't seen that it's helped the U.S. economy any -- have you?!

    - Badtux the Economics Penguin

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  2. Hi BadTux,
    I guess the savings rate must be up here because of "pink slip worry". No, I sure haven't noticed anything good come from that increase, yet.

    Thanks,
    Dave

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All comments are welcome.