【新闻周刊】Hey, Small Spender——Chinese Consumers Can’t Save Us

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Hey, Small Spender
http://www.newsweek.com/id/202862

By Rana Foroohar Published Jun 20, 2009
From the magazine issue dated Jun 29, 2009


At a Wal-Mart in Beijing  Elizabeth Dalziel / AP

Are Chinese consumers ready to save the world by finally taking their place alongside profligate American shoppers? A glance at the sales numbers seems to indicate they are. While U.S. consumers stayed home fretting over their depressed home values and depressing brokerage statements, their Chinese counterparts hit the stores. Retail sales jumped 15.2 percent in China in May, as home and car sales soared. Even with exports collapsing—down 26.4 percent in the past year—China's economy may grow by as much as 8 percent this year. To some experts, that is evidence that the country's booming middle class is driving a recovery.

It's a scenario that should warm the hearts of Chinese manufacturers and McDonald's executives alike. But it's misleading. The big spender driving the Chinese boom is not the individual—it's the government. And no government can spend as freely right now as China's Communist Party, with its nearly $2 trillion in reserves and unchecked budget authority. Beijing's stimulus plan amounts to 4 percent of GDP, double America's 2 percent, and China didn't have to resort to foreign borrowing. Government investment is up over 30 percent since the beginning of the year—spending on rail lines and roads has more than doubled in the past year. Subsidies are multiplying, as central and local governments pump money into idle factories and retraining workers. Government lending—and the party's strong suggestions that banks should lend more—is helping apartment sales surge, as are new real-estate tax cuts. The state is even handing out vouchers directly to consumers for cars, refrigerators and other products.

China's overall recovery is real, and that's good news for most other economies in the world. But the government's largesse is obscuring the degree to which China still depends on subsidized exports to America. The global downturn is hitting hard in places like Guangdong province, a southern factory hub that produces about a quarter of China's exports. There, five-star hotels stand empty, while job centers for laid-off migrant workers are full. On a recent evening, the Pearl River itself seemed dimmer—many of the garish light displays that usually blaze from waterfront inns and restaurants had been turned off "to save electricity," says Su Caifang, deputy director general of the Guangdong Foreign Affairs Office. "We're still very export-dependent, especially on America," says Su.

It's an honest admission, one that undercuts all the talk about a middle-class Chinese consumer poised to take the place of Wal-Mart moms. Local officials from around the Pearl River Delta like to talk about how they are now traveling inland to Hunan or Sichuan province to sell their own countrymen the consumer electronics, jewelry, cheap clothing and shoes that they once sent abroad. Yet sales are a drop in the bucket compared with the enormous market outside China. There's a sense that the U.S. market will take years to rebound—and may never reach its former spendthrift glory—while the Chinese market will also take a long time to reach critical mass. "Even before the financial crisis, we knew we needed to move beyond the U.S. market," says Allan S.K. Lam, vice general manager of Hua Jian Group, a shoe manufacturer that makes much of what you see in stores like Nine West, Kenneth Cole and Coach. "But it's going to take at least five years, perhaps even eight years, to develop the Chinese domestic market in an important way."

It will take much longer than that for the Chinese to rival Americans as consumers: Chinese incomes are about one tenth those in America, and total consumer spending in dollar terms was about $1.7 trillion in 2007, compared with $12 trillion in the U.S. Meanwhile, the individual savings rate in China is 30 percent, compared with less than 5 percent in the U.S. The reason: most Chinese get no pensions and have to pay cash in advance for health care. In China, saving for a rainy day is serious business.

Locals in Guangdong know the situation is more precarious than government figures make it seem. "I've talked to a number of factory owners in the area and they tell me that if they can't get more orders in six weeks, they may go out of business," says Ding Li, director of the Center for Regional and Corporate Competitiveness Research at the Guangdong Academy of Social Sciences.

Of course, the government can always spend more. Just look what it's done in Shenzhen, a Pearl River Delta city, 60 miles away. Thirty years ago, it was a paddy field. Then, Deng Xiaoping decided to turn it into a manufacturing center, which today has an economy nearly half the size of Hong Kong's. Most recently, the government announced that China's version of the NASDAQ will be based there, spurring more new development. Many of the hyper-air-conditioned shopping malls, mock-Disney weekend resorts and nonsmoking coffee bars there were built by OCT (Overseas China Town), one of the earliest government-owned real-estate operations. Since 1985, the company has developed $8.7 billion worth of real estate. Still, on a recent evening, both Western and Chinese chain restaurants were nearly empty.

China has successfully executed this sort of stimulus strategy before—during the Asian financial crisis of 1997–98, and also after the dotcom bust in 2001. But in both those cases, government money was a Band-Aid, meant to buy time while the global economy (and exports) recovered. It worked well then, but this time around, things are different.

There are signs of economic recovery in the U.S. and, to a lesser extent, Europe, yet Chinese exports to those markets are still dropping. That means that jobs for the 20 million Chinese workers who have been laid off may not come back, either. UBS bank estimates that the ranks of the unemployed may grow by another 15 million this year.

Optimists point to Beijing's power of the purse. "The Chinese Communist Party is now the world's most liquid financial institution; there are no fiscal constraints," says Andy Rothman, a respected China bull at CLSA in Shanghai who predicts 7 to 9 percent growth next year. Most economists agree that autocracy has its advantages in the midst of a credit crunch, since there are no political or legal obstacles to spending. As an executive at one of China's largest state-owned banks puts it, "The government told us to lend—so we did!"

China is beginning to create a social safety net, which would give people more confidence to spend instead of save. A few months back, Beijing passed a $124 billion national health-insurance plan, to be delivered over three years. Yet as Morgan Stanley Asia chairman Stephen Roach points out, that's less than 50 bucks a head in China: "just puny." Meanwhile, China's social-security fund has only $82 billion under management, less than $100 per worker.

Economists believe the number should be doubled, and that China could afford to do it. Yet Beijing has been talk-ing about bolstering the social safety net since 2006, with little action. Even the Chinese are skeptical about Premier Wen Jiabao's boast to deliver universal health care by 2011.

Of course, increasing affluence would also help encourage consumer spending—the per capita GDP in China is still only $2,000. But that would necessitate moving away from low-end manufacturing toward producing global Chinese brands. Right now most exports are merely assembled in China rather than designed there, which means most of the profit—and the big salaries that would support shopping sprees—still go abroad. Throughout Guangdong, officials and factory bosses alike are working toward designing and producing more sophisticated finished goods, but the statistics tell a different story. Some 60 percent of production in the region is still low-end component assembly. So until China becomes an advanced export power, most of the economic green shoots will be pushed up by the state.

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深深的红

我来翻译这篇吧。希望这个周末能搞定它。

深深的红

翻译完毕，链接在此：
http://bbs.m4.cn/thread-178997-1-1.html