The Economist in China’s Wonderland

As Brexit and Trump elections discredit the lame Western Capitalism and Imperialism, Western media doubles its effort to discredit the rising Chinese Socialist power.

They have a special way to report about China where everything is negative.

On November 12th 2016 The Economist published a short report from Shenzhen about what seems as a totally boring subject: Chinese courier firms. It comes, as usual, under a patronizing title “China’s express-delivery sector needs consolidation and modernization”. But it contains such a glaring and laughable combination of contradictions that I found it worth bringing here to you.the-economist-on-courier-firms-in-china

We learn from the article that:

  1. The country’s express-delivery sector, accordingly, is doing well. In spite of a cooling economy, revenues rose by 43% year on year in the first eight months of 2016, to 234bn Yuan ($36bn).

Everybody knows that China’s economy is cooling. It is only the actual economic activity that is still red hot.

In fact the delivery sector is not just another branch of the economy. It is an indicator of other economic activities. It also signifies the rise of a more integrated and consumer based economy – just the direction that the Chinese government promised.

  1. Although the state’s grip on China’s economy is tightening, the private sector’s share of this market is actually growing.

Everybody knows that state control is tightening… only that the facts are different.

  1. The breakneck growth of courier companies masks structural problems. For now, the industry is highly fragmented, with some 8,000 domestic competitors, and it is inefficient.

We once thought that the capitalist economists would recommend competition as a driver for better services… But in China even competition between private companies is bad.

  1. Firms therefore find it hard to build up national networks with scale and pricing power. All the competition has led to prices falling by over a third since 2011. The average freight rate for two-day ground delivery between distant cities in America is roughly $15 per kg, whereas in China it is a measly 60 cents

Amazing how inefficient those Chinese are, so much so that delivery prices may be just 4% of what you pay in the most efficient US economy. Or is The Economist really shedding tears for the poor Chinese capitalists lacking the “pricing power” of monopoly?

And, no, wages in China are nothing like 4% of those in the US (unless you speak about wages of the top CEOS). In fact the minimum wage in the US is 7.25 US$, while in China it is between 1.6 and 2.7 US$.

And the troubles don’t stop here:

  1. More ominously, labour costs are rising. There are fewer migrant labourers today who are willing to work for a pittance delivering parcels. This week China Daily, a state-owned newspaper, reported that ahead of Singles’ Day, courier firms were offering salaries on the level of university graduates.

What an awful place China is becoming!

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