Comment from Consciencechina on the deflation issue. What’s particularly interesting here is that regardless of official figures (dodgy of course at best), it’s people’s perception of how high prices ar and what they can afford to buy that are critical to their spending behavior. If many Chinese consumers think like consciencechina, we can forget about the domestic market riding to the rescue:
It’s early to talk about the “deflation”, Simon. The beef in the market near my home is still costing more than 50yuan/kg to buy, imagine it was just 16yuan five years ago! Real estate prices are still two-three times more than few years ago, and so on.
Five or six years ago when you were calling it “deflation”, the house prices in the center of the city I am living in were around 2000-3000yuan/square meter, much cheaper in the circumjacent regions. Many common citizens, even the producing workers were able to afford their home. Last year the house prices in downtown city had rocketed to 8000-10000 yuan/sm! Now they are still 6000+ yuan to buy! How can we survive in such place where the average monthly income of the citizen is about 1000-2000 yuan?!
As a matter of fact, China is falling into a chaos: So many factories have been closed down, so many workers have been laid off, while the inflation is still furious. A most dangerous time to be Chinese……