Theyre not going to work for a nickel an hour So labor rates have risen which

Theyre not going to work for a nickel an hour so

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They're not going to work for a nickel an hour. So labor rates have risen which means it's not as cheap to make stuff in China anymore and some jobs have migrated out to other countries that have cheaper labor, but the Chinese government has worked this in intentionally as a long-term economic program where they said, "Yeah, we know that's going to happen, but we now want to culminate local entrepreneurs for last couple decades to make Chinese made stuff like watches and cars and mopeds and refrigerators and wine and luxury goods" We keep coming back to wine because the Chinese know that wine is a very what we call a conspicuous consumption deal meaning you want you to have your Rolex showing or your mink coat or really rich refined people they drink wine. So China doesn't want Chinese people all buying European wine or American wine. They're making their own wine and China will be the world's largest wine producer in the next ten to twenty years and they will be the world's largest wine consumer in the next ten to twenty years, probably less than ten. So conspicuous consumption, uber materialism, these are all things that China had done in the past, but they've looked to the West and said, "Yeah, that's what the west does too and we are as fully developed as them and we want to behave like them and we want to have that certain lifestyle like they have." and it is happening. So you couple all of this, this surging domestic economy is what we call it now
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when you're producing Chinese goods for Chinese people not just for export. China still makes serious bank exporting manufactured goods and now it's making serious bank producing domestic goods for a domestic audience. You couple all this stuff together with the national pride and that China's becoming more powerful regionally. So all the countries around Asia including even the Pacific Rim countries like Chile or Australia, New Zealand, everybody knows that hey to do biz in the Modern world you have to deal with China. Nobody was doing that fifty years ago didn't exist. Even 30 years ago you wouldn't care that much of your country trading with China. Now it's an absolute must. If you don't have a trade relationship with China, you ain't going nowhere. Your economy is gonna be hobbled. So everybody's I'm not gonna say having you kiss China's ass, but things have been reconfigured here in the 21st century to understand that China is as big and as important as the united States is economically and financially so you're gonna have to do business with them and you want to do business with them because they've got to market of a billion and a half people who might want your stuff. Now, that financial economic power eventually always translates to political power, too. So other things that are going in China's favor right now are is as they exert their power a little bit outwards financially, you know what, the Taiwan issue is going away a little bit as I suggested to you a couple lectures ago.
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The Chinese also are the greatest holder of US debt.
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  • Fall '08
  • JDBOYER

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