Brand

Once I think of CIC, I come to realize that China remains the hope of the world economy.

(Yes, I'm a bit thick, if not only stubborn.)

The usual suggestion on how our country could get out of the financial tsunami is to boost up the internal demand - so that the living standard of Chinese people could continue to improve, and our economy could be less dependent on export. (Unfortunately, the same suggestion on internal demand is often put up for Hong Kong - without recognizing the difference in the scale of economy. Alas, parrots are everywhere.)

On the first glance, it seems very plausible. Take the States as an example: it could produce almost everything for her people; if the daily need of everyone increases, the whole of her economy would prosper. Although the Chinese land may be less fertile, it seems sufficient to feed 1200-million population. Moreover, a substantial proportion of Chinese people have much in their living standard to be improved. If the original plan of Deng Xiaoping (鄧小平) does work out, the affluent people in coastal cities would create demand, and therefore employment opportunities, for the in-land residents - so that the latter could improve their own living.

That sounds great - the only flaw in this link is those rich Chinese people do not impose a higher need of their local products. Be it milk, food, cosmetics, automobile, or any other consumable that you could think of, products from some foreign country are always preferred. They are safe and you would less likely be poisoned by melamine, mercury, Sudan red, or some other funny chemicals that no one knows how to pronounce.

And therefore an increase in internal demand could only be translated to a proportional rise in the trade deficit.

Oh, don't look down upon Chinese people. We are not alone - look at Uncle Sam.