Population Statistic: Read. React. Repeat.
Tuesday, December 30, 2020

This still-forming Great Recession is, of course, a global slump. Perhaps nowhere is it being felt worse than in China, where an estimated 10 million workers are now migrating out of former boom cities and back to their homeland countrysides.

That could be bad:

The government, always concerned about social instability, is now on high alert, fearful of the consequences of a huge mass of jobless, disappointed, rootless young men.

Beijing has urged firms to avoid cutting jobs despite falling profits, and many bosses have obliged by retaining workers but giving them unpaid leave…

But China is heading into uncharted territory and the picture could deteriorate quickly. Many economists forecast growth next year of less than 7.5 percent, the country’s lowest since 1990 and a level that would swell the ranks of the jobless.

“The redistribution of wealth through theft and robbery could dramatically increase and menaces to social stability will grow,” Zhou Tianyong, a leading Communist Party scholar, wrote this month in a newspaper issued by a state think-tank.

Then again, all this reverse migration takes newly educated and experienced Chinese workers back to the traditionally talent-starved interior. So that could be a good thing, longer-term:

Coastal provinces have long been the wealthiest in China and the main destination for migrants. But they have borne the brunt of falling exports, while the country’s poorer hinterland is more closely tied to domestic fortunes that could rise on the back of a hefty government stimulus spending.

“We are seeing quite a few good, talented people come our way from Guangdong, people with business experience and skills,” said Wei Chengyi, manager at Chengdu Doulton Trading Co., which sells ceramic filters. “It’s a big help for us.”

The silver lining, in the form of a redistribution of human infrastructure that would shake up China’s centuries-old socio-economic pattern. When all this is done, the People’s Republic just might leap out of Third World status, finally.

by Costa Tsiokos, Tue 12/30/2008 12:09pm
Category: Business, Political, Society
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I’m not sure if it qualifies as an actual finance-style bubble, but the sudden difficulty in attaining a clean-break divorce in the midst of a declining housing market sure feels like the bursting of something:

With nearly one in six homes worth less than the mortgage owed on it, according to Moody’s Economy.com, divorce lawyers and financial advisers around the country say the logistics of divorce have been turned around. “We used to fight about who gets to keep the house,” said Gary Nickelson, president of the American Academy of Matrimonial Lawyers. “Now we fight about who gets stuck with the dead cow.”

As a result, divorce has become more complicated and often more expensive, with lower prospects for money on the other side. Some divorce lawyers say that business has slowed or that clients are deciding to stay together because there are no assets left to help them start over.

So a broken marriage stays broken, but still intact. Which leads to awkward living arrangements:

Some clients have split up bedrooms and continue to live in the same house, [divorce lawyer Bonnie Booden] said. Some split child-care duties so they don’t have to deal with each other and live that way until they can figure out what to do. “And I’ve had people who just throw in the towel and get divorces anyway, creating financial ruin for themselves,” she said.

I’d guess that the more religious elements of society would look on this decline in divorce as the ends (somewhat) justifying the means. And I’d be right.

by Costa Tsiokos, Tue 12/30/2008 11:17am
Category: Business, Society
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