The Chinese Slowdown

Today Via Meadia had a post talking about the Chinese slowdown. It links to a Washington Post article. The city being discussed in Dongguan. I spent half a year living in Dongguan.

For various reasons I don't agree with the article. Dongguan has always had its empty parts. After all, Dongguan is home to the biggest mall in the world. I think less than 10% of the stores in that mall have ever been occupied. In short, Dongguan is a town full of white elephants. I'm not surprised a hotel was empty.

So I guess take issue with the "atmospherics" the Washington Post piece sets up. The economic slowdown isn't hollowing out Dongguan. Dongguan's emptiness isn't a new phenomena requiring explanation.

Crappy centralized planning in Dongguan created parts of the city never extensively occupied. That's the real problem: planning.

Second, there are plenty of factory jobs, at least as of a few months ago, for people that want them. Factories doing intricate work, say watch making, for instance, have started having problems finding trainees to replace their aging work force. I think this is partially an education/cultural problem. University graduates consider this type of work demeaning. High school graduates don't have enough training. High school graduates get pissed off at quality control regimes because often they're not good at intricate work; and most factories have pay deductions for sloppy work. This is Foxcomm's woe.

Why is this happening? Planning. Chinese schools are failing their students. China has crappy demographics. I'm optimistic though.

Shale oil is transforming America. China has even larger shale reserves. They need the energy. Developing their reserves is going to create a lot of jobs.