From The Telegraph:
And of course when people lose everything, they have nothing to lose.
In the heyday of China’s economic miracle, buyers from all over the world flocked to Yiwu, an unremarkable city in the southern province of Zhejiang.
Inside the halls of Futian Market, which sprawl over the equivalent of 800 football pitches, they haggled over hundreds of thousands of low-cost goods – everything from candles and fake flowers to eyeglasses and DVD players. Their orders would then be shipped across the globe to high street shops and supermarkets, fuelling China’s incredible growth.
Li Xuhang, the city’s deputy mayor, said: “If you spent only three minutes with each Chinese manufacturer and spent eight hours here each day, you would need over a year to make your way around the whole market.”
During the decade-long boom, Yiwu attracted buyers not only from American and European companies, but also increasing numbers of Arabs, Russians, and Africans. Scores of Pakistani, Korean and Middle-Eastern restaurants line the streets and there is even an Iraq Hotel.
But now, as the Chinese economic miracle unravels, the labyrinthine halls of Yiwu have emptied of foreign buyers. The latest figures from China’s customs office show exports plunged by 17.5 per cent in January, the biggest fall in more than a decade.Read On
People, both in the West and now in China, often value their life based on their earning power and material possessions. Now that their riches are slipping, the economic tough times becomes psychological tough times.
HONG KONG (Reuters) - Public security will be "grim" this year given the financial downturn, with rising crime rates expected and possible instability from laid-off migrant workers, a top Guangdong police official said on Tuesday.
Guangdong, which manufactures around a third of China's exports, has in recent weeks seen the return of migrant workers, many of whom have struggled to find work given a slew of factory closures and an estimated 20 million lost jobs.
"Faced with the complicated changes in public security in society, especially given the impact of the international financial crisis, we expect the public security situation to be grim," said He Guangping, the deputy head of the Guangdong Provincial Public Security Department.
Economic crimes have risen -- including mobile phone scams, currency counterfeiters, and "black bosses" refusing to pay workers -- leading to the arrests of 5,200 people, and the recovery of more than 3 billion yuan (307.8 million pound) in ill-gotten gains last year, He said.
"All kinds of illegal and criminal activities will continue to increase ... The task of safeguarding social stability, law and order overall is still arduous," He told reporters on the sidelines of Guangdong's annual National People's Congress session in the provincial capital Guangzhou.Read On
In my mind, the only way to get through the economic crisis will be to get away from the ideas of keeping up with the Joneses and viewing material wealth as the grandest achievement in life.
Will making these adjustments be easy? No. But I believe it will be an inevitable outcome in an economy which no longer allows its citizens to consume the way it has been for decades.
I'll finish today's post with a video of economist Peter Schiff. Schiff began espousing the move away from runaway consumption years ago. Here are a few of his appearances on a number of different American financial TV shows.
If you despise the talking heads on Fox News and CNBC and the faux financial booms they cheered on over the past decade, you'll really enjoy this video:
As much as I like this video for the way Schiff handles himself and the predictions he makes, I like the video even more for the reactions of the other panelists to Schiff and the mocking tone they take with him. It'd be fun to watch this video in the same room with Art Laffer, Ben Stein, or Charles Payne today.
If only there'd been more people speaking like Schiff earlier.