Today I read a magazine in the library to introduce whether China's economy will become a Latin American country. After following Brazil and Indonesia, I said it very well. Just when Brazil's economy grew rapidly similar to China for decades, just when it was about to become a developed country, its economy suddenly collapsed and became a developing country that has not yet developed.

Just when Suharto relies on power to build a country, he is about to become a developed country, and when he is self-reliant and has made contributions to the people, the financial crisis, people lose money overnight! He has become a vicious thug.

These are all painful lessons. Why do we lack domestic demand? Will China's future become the next Latin America?

Why do we lack domestic demand? Why don’t we have a strong middle class to drive domestic demand? Where did our wealth go? After reading the two examples below, you will understand why.

If you look at the gap between Latin America and the United States, you will understand how our lack of domestic demand is formed today. Latin America's poverty lies in the fact that it has not formed a good wealth regeneration system. To put it in a more mainstream sentence, it lacks a sustainable development ability in wealth accumulation.

Let me give you a simple example to illustrate such a difference.

The first case:

Suppose a gold mine was found in a place, and a person came to invest in a mine, hired 100 workers to make gold for him, making a profit of 10 million yuan per year. The mine owner paid 50% of it as the wages of the workers. Each worker earned 50,000 yuan per year. They used 10,000 yuan to rent a house. The remaining 40,000 yuan can get married, have children, start a family, and start a business. The mine owner still has five million yuan in his hands, which can be used to invest. Because the workers have money and have to settle down, there is demand for the house. So the mine owner uses the money in his hands to build a house, rent it to the workers, or sell it to the workers. The workers have to eat and drink, so,

Opening a restaurant makes money back. Opening a restaurant requires hiring other workers, so the worker's wife has employment opportunities and income. The consumption demand for a family is even greater. In this way, a few years later, 100 families appeared in this place. Children have to study and have education, so some people come to run schools, workers have to date, consume, and do other things. So there are cinemas and shops. In this way, 50 years have passed, when the mines in this place are almost dug up, this place has become a prosperous city with about 100,000 people.

And the second case is this:

Suppose that gold mines were also discovered, and someone came to invest in mining, and they also hired 100 workers, and made a profit of 10 million yuan per year. However, the mine owner paid 10% of them as wages, and each worker was 10,000 yuan a year. This money was only enough for them to fill their stomachs, they had no money to rent a house, and they had no money to ask for their wives, so they could only live in shacks. The mine owner made 9 million yuan a year, but when he looked at it, he saw that there was no need for any investment locally. So he transferred the money abroad because

The local area is not safe at all. He built a few luxury villas and hired a few workers as bodyguards. The workers had no future and had no other needs except working hard to make a living. The only thing that could be a chance was to find a way to trick a wife into a wife, give birth to a beautiful daughter, and maybe marry the mine owner as a wife. After 50 years, this place still has no other industry except the luxury villa. When the mine was dug, the mine owner left with a huge sum of money. The workers either went in exile, the man was a thief or the woman was a prostitute.

These two simple examples are actually the different development trajectories of Latin America and the United States. Perhaps today Americans should say that thanks to Washington, he created the most modern and scientific political system for the United States, and Henry Ford, he created the middle class in the United States. Latin American countries are not so lucky. Their great dictators created a predatory economic system, and they frantically divided social wealth in a powerful manner, which made the entire economy run out and no longer able to develop.

Here we need to mention Henry Ford. Among all the commercial figures in ancient and modern times, no one can match the influence of Henry Ford on the social economy. It was he who used his Model T to create the original middle class and introduced American society into modern society (Europe is decades later than the United States in this regard). Henry Ford said that I want my workers to afford my Model T, so he paid high wages to workers, and he also created flow of water.

The production method of the line greatly reduced the automobile industry, so Ford became the largest automobile company, so rich workers could buy cars, houses, and other consumption, so the middle class was born. So, while completing the western expansion and no room for maneuver in the territory, the United States discovered another gold mine. The rapidly growing middle class drove huge demand, supported the huge domestic market, and continued to drive rapid economic growth.

The United States has always been a country that relies on domestic demand to achieve economic growth. China has only a population of 1.2 billion, but it is actually insufficient domestic demand? It has to rely on foreign trade to drive economic growth. You say this is not a strange thing? Where do you think you are a small country? You can be fat with an extroverted economy? Who can support China with a population of 1.2 billion? Except for yourself. No wonder the whole world is pointing at you and saying you are dumping people.

Speaking of this, it’s time to talk about the problem in China. Why do we lack domestic demand? Why don’t we have a strong middle class to drive domestic demand? Where has our wealth gone? How much capacity does we have to continue to grow?

A reality of our reform. Where is China's future? Should we move towards the United States or become the next Latin America?

China has completed its original capital accumulation in a gradual way. Let’s not talk about power-for-money transactions, institutional loopholes, and gained without effort. No country’s original capital accumulation is clean. But the key is, after the accumulation is completed, what should we do? Should we continue to allow the gap between the rich and the poor? Or create our own modern society and create a spindle-shaped social structure.

What are we doing? Housing reform, medical reform, enterprise reform, education reform, stock reform, where is our reform going? Why continue to exchange for inflated development by crazily plundering not much social wealth of the general public? Compared with the top ten gaps between China and Singapore, let alone the specific ones, because small countries are much easier to manage than a great country like China. However, what I have thought about for a long time is the equality thought invested in Singapore's system and the kind of care for the general public. And what can we see?

China has never been equal. There was no in the past, but not now, and it is hard to say whether there will be any in the future. We only have the so-called elites and common people. When all young people who have received a good education spend their whole life buying a place to settle down, when a family and a child have to emptie all their savings at home when they go to school, when you invest money in the stock market, it is equivalent to donating money, and get the MBO used by those state-owned enterprise bosses to make legitimate personal pockets, when a farmer's income for a year is not as good as a large sum of money for a meal, do you expect everyone not to save money and save money wildly? Do you expect trillions of deposits in the bank to be converted into huge demand? Do you expect the consumer goods market to continue to be hot? Do you expect people with some spare money to make more useful investments instead of speculating on housing as hot money? Do you expect that the social wealth, which is not much, can flow faster and more reasonably?

We are very poor because we don’t have much money, but we are packed into the pockets of very few people. We are not rich, but we are stuffing a piece in the bank, a piece in the house, and a piece in the stock market. My money seems to be quite good, but I can’t move, and it’s all dead money. So a few rich people can only buy LV, Cartier, and Swarovski, because there is nothing to buy except this. Some people also jump out to whitewash the peace and say luxury China. Which big country’s economy is driven by several luxury brands? Besides, what does luxury have to do with you? Why are you excited? If you have several top luxury brands in China, it’s okay to follow it up. That’s just to make France and Italy make more money. This is our China.

Before our farmers became rich, they had already vomited blood for their children's education problems. Before our middle class was born, the huge number of "large and large non-gross and small" created by the stock reform were robbed. Where are we looking for domestic demand now? What are we going to do besides exporting and letting the whole world support us? So, the whole world says you dump. Yes, 1.2 billion people, who can support you?

Why is this happening? Why has our reform entered such a situation? Education fees, high housing prices, stocks are making money, God, what is this decision? Which country in the world that is already rich is so eager to make money from its own people at the beginning?

Where has our elite class gone? Why can't they figure out this problem that can be understood with their toes? The Lang Gu battle has already disappointed everyone with the mainland economists. Why are the entire mainland economists defeated by a Hong Kong man named Lang Xianping? There is only one problem - conscience, not that mainland economists are too stupid, but that they have been bought and their conscience has been destroyed. There is no other function except to scream for the master. So our *, capital, and intellectuals formed an alliance and formulated plans to further divide wealth. So our general public lost their voice, and even if they screamed a few times, they would not be heard.
Chapter completed!