The Rising Influence of Rising Affluence

[mrholty]

My personal belief is China is Japan in the 1920s or maybe 1950s. Just coming out of decades on insulation and growing their economy by being the cheapest producer of commodity goods. Individual factory owners are trying to get volume and market share in the short term with the plan that margins come later. However I expect that to fail as producers will simply move. The same thing happened in Japan in the 1920s, along with a property bubble that deflated. The 50s apply as Japan was originally known for cheap knock-offs which rapidly shifted due to their reverse engineering into consumer electronics (Sony, Sanyo, Panasonic) and then automotive.

I lean toward 1920s Japan but the 1950s Japan works. I don't think there is a good comparison with the US on a historical basis.