This may be the million dollar question that everyone what to know the answer. Many friends and readers asked me about how will China perform in the next few years when the global financial crisis is spreading. It seems for sure that US will suffer from the recession in the next few years, and so do many other countires. What about China?
To be honest, I don’t know. I am confused myself.
The last time I have the feeling of confusing was during the SARS period: everyone is asking how serious SARS is, but even I am not sure whether I should believe in what is reported in TV (I was very sure that I should not believe, but if you don’t believe it, that is your source of reliable information?) However, just as the SARS period, although I cannot confirm the over situation, I am 100% sure of what I see from my own eyes. In this time, I hoep I continue to act as eyes and hears for people who are not able to be here by him/herself.
It seems to me the consuming in Shanghai is not impacted. Restaurants still have enough customers, and you have to wait in long line at almost everywhere at dinner time, especially on Fridays.
The shopping malls are still full of people, with long lines at check out area.
Real estate price seems to drop a little bit, but only on the newly built house side. For second house side, the price is there, but there is no volume. The price for second hand house are stuck in the middle. Recently, there are a bunch of aggressive controller method from the central government regarding real estate market, like lower down the tax, and lower the down payment requirements… It seems to me that the Chinese government has learnt from US experience, that if house market crashes, the whole economy suffers. If the previous 1-2 years, the government is busy pressing house price down, now they are working hard to keep the house price stable (not up, but definitely not down).
When my friends about whether people in China are optimistic about the future of economy or not, my answe was: “People are still very optimistic, since the media propogada is all good news”.
When you browse the headlines of major newspapers (if not all the newspaper), it all stated that “China is confident to keep high growth during the hard time for the world”, or “Impact to China will be small…”.
The other interesting news I got from one of my friends was, key financial magazines have been banned to reprint news from Financial Times, or Wall Street Journals.
When I talk with normal people around me, they are very optimistic, just as newspaper headlines can be. However, when I talk with industry expert, from economist, to fund managers, to government officials, they are not that optimistic. Some of them are “scared”. One of them said, I have been working in this field for so long time, but I have never been so scared.
My 2 Cents?
Me? Just as one blind man around the elephant, I have no idea about what it is going to be. Let’s wait and see…