Defense

A Booming Economy

22 Mar , 2010  

I’ve been in Hong Kong the past few days and the local economy appears to be booming.

The South China Morning Post has reported the following pieces of news since I’ve been here:

  • Minimum wages are going up by 18%
  • Benefits are going up by almost 6%
  • Unemployment is below 5%
  • There is a growing labor shortage

In the U.S. and Europe, of course, the economy is limping along at best. The difference is striking.

In a global economy, it seems odd to have one part of the world booming and another part struggling. I wonder if this is sustainable. I suspect not. I predict we will either see the U.S. and Europe start growing again very soon, or see growth in Hong Kong and China slow dramatically. For global stability, I certainly hope it is the former.


3 Responses

  1. Devang says:

    If economy of a country always continue to grow then is it not considered healthy. Continues and forever growth is not sustainable. So why would global economy always continue to grow ? Wouldn’t it makes sense to see slowing of HK/China before US/Europe starts speeding in a healthy global economy?

  2. David Silverman says:

    When you see car carrier after car carrier full of Land Rovers in the middle of nowhere in Mainland china you know a bubble is bound to burst sometime soon. Also you see Chinese buying REAL luxury items instead of the perfect duplicates available for a fraciton of the price. Seems strange/unsustainable. Check out India – feels even more energetic than China to me but not terribly overheated yet.

    Dave (KSM ’07)

    • Tim Calkins says:

      Dave–I agree it all feels unsustainable.

      My next post will be on the strange dynamic you mention: people buying luxury goods when the knock-off products are readily available.

      Tim

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