This is a blog dedicated to a personal interpretation of political news of the day. I attempt to be as knowledgeable as possible before commenting and committing my thoughts to a day's communication.

Sunday, December 21, 2008

Riots And Closures

Actually, it's the other way around. Factory closures are causing increasing riots. People like to be employed. They require the opportunity to earn a living wage. Without which they cannot feed themselves or their families. And while the world at large is experiencing huge difficulties in the aftermath of the initial warnings of a financial collapse which has veered them unerringly into recession and depression status, the largest, most populous country in the world finds itself in troubling times.

Amazing, how speedily events turn. From a scant six months earlier when China presented as the fastest-growing economy in the world, with a vast factory output and an immense trade world wide, suddenly everything has come to a shuddering halt. Just like that; from a plethora of export opportunities with more, far more to come, to penurious collapse. Gone the fervently-anxious importation into countries all over the world of inexpensive Chinese products and foodstuffs.

As countries' economies have contracted, imported products have suddenly become redundant to their more immediate functioning needs. More compelling needs elementary to surmounting the growing crisis of their faltering financial situation. A world that so recently clamoured for Chinese-produced merchandise suddenly finds itself quite able to get along without them, thank you very much.

Now China, that vast emporium of clever entrepreneurs and migrant workers whose industry was successful in closing down countless factories and producers in countries throughout Europe and North America, struggles with the evaporation of its nascent economic kingdom. Half of the country's exporters of toys have collapsed. Fully 670,000 small companies have now closed, and with those closures roughly 6.7 million jobs have vanished, for starters.

Consumer confidence has tumbled within the country as people face the doubly-disturbing spectres of tight times and lost jobs. Construction projects are in hibernation, car sales stalled, and property prices have collapsed. The country's stock markets have lost over half their value. Mass layoffs as increasing numbers of factories close, have sent the economy into a further tailspin.

The World Bank is predicting that China's growth is on track to slow below the 8% required to ensure that jobs are produced for the 24-million people annually entering its work force. What is emerging now from this gloomy snapshot of a halted economy is the increasing number of violent strikes and protests. A country the size of China's cannot contend with social instability on such a vast scale.

In northwestern China, a government plan to redevelop a city centre and in the process throw thousands out of their homes, creating further job losses, has incurred the violent wrath of those involved, with rampaging citizens burning cars, attacking government buildings and battling police with rocks and iron bars.

For its part, a worried Beijing has brought forward a $586-billion stimulous plan of infrastructure renewal and spending for housing. The country's central bank has slashed interest rates, and the government has introduced subsidies to entice people to begin spending their way out of a recession. However, since 38% of the country's economy is dependent on exports, it promises to a long journey.

China's dependence on the financial health of the rest of the world, so latterly desirous of obtaining cheap Chinese merchandise, ensures that it will be incapable of controlling its own financial destiny until such time as its world-wide customers find themselves once again in good health. Given the curious inability of financial experts to postulate a reason for the ongoing crisis, let alone a prognosis for recovery, that may be some time to come.

Meanwhile, China will find itself increasingly facing an internal revolt as its people become more militant and provoke the government to act decisively in the interests of putting down violent protests and impotent strikes. The result of which will not be pretty, encouraging the government to discard its present velvet-gloved responses, resorting to the more familiar totalitarian-style control the world so abhors.

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