Four Important Trends In China Promise Big Changes
1) There will be a rise in the labor
movement as workers seek higher wages and better working conditions,
thus gaining a greater respect for labor laws.
2) As the nation continues to embrace
Western-style fast foods and greater meat-heavy fare, the growth of
obesity and diabetes will continue to expand. Already 30% of the
population is overweight and 92 million Chinese have Type 2
diabetes. (The International Diabetes Federation estimates 500
million Chinese might develop the disease by 2030 — which will place
a huge strain on China’s economy and productivity.
3) Since China’s intellectual property
rights continue to lag the developing world, Chinese innovators
can’t profit from their own advances. Because of piracy and
ineffective intellectual property protection their incentives to
invent will be undercut, placing a heavy drag on domestic
innovation.
4) Despite having a savings rate of 38%
(10 times that of the U.S.) Chinese savers have few choices on where
to invest their money, namely real estate or domestic stocks.
Already a worrisome asset bubble in housing exists (12.4% increase
in prices year-over-year). Any widespread losses in real estate
would cause long-term financial pain for Chinese households, many of
whom have relied on the savings of three generations to buy a home.
