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Durudarshan - Investment Analysis

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China Consumer Price Index very encouraging

Posted on February 18, 2016 at 10:40 AM Comments comments (4)
News of China today, showing their Consumer Price Index increasing from December, is very encouraging.  It indicates that after the 'slowdown', things are moving in the right direction.
The 'slowdown' is a deceleration of the economy, from the full blown industrialisation and production that filled China over the last 70 years or so, leading on from the spur from Chairman Mao to continued growth in the last few decades....that is now slowing down as the economy transits to the phase of a major, developed economy.  In this regard, I would hope that they will roll out medical and healthcare facilities for all, as well as affordable housing for the bulk of the population, provided by the state.  The happy news for China is that they have the capital reserves to do all that, distributing the accumulated national wealth to her people. 

After industrialisation and reduction in the territories which Great Britain had domain over in the 1950s, what they did here is what I would suggest China could do for their nation.  Here we had the setting up of the National Health Service and the Welfare State, those are two ideas they could develop in China.

I note that all their young people are not doing any conscription, so there is huge scope for those people to be put into higher education and perhaps vocational training for the new industries, for example putting the solar panels on the roofs, etc.  Here in England people are impressed at the Beijing method of maths, and obviously China will produce world leaders in crunching numbers. 

There will be huge scope for cultural activities as well, taking a hint from President Xi's wife, who is an opera singer. 

Looking at the huge shutdown of factories in steel production and electronics, all I would say is that perhaps their wages have outpaced everything, taking away their competitive margin.  The alternative would be to try and open these industries again at lower wages, when demand increases in the world.  In the meantime, it would be appropriate for the government to provide social welfare that is a little more meaningful.  It is shocking to hear that workers who earned $100 a month ten years ago were recently earning $1000 a month, before they lost their jobs.  It is equally shocking to hear of an old woman getting about $16.17 per month from which to feed herself, buy some medical supplies, and look after her children who have recently become unemployed.  Here the government must revise their figures, perhaps offering them something like twenty percent of their income to try and subsist. The case for doubling or even quadrupling such amount(as $16.17 a month) is overwhelming.  And knowing the Chinese custom of prudence, it would serve their people well, to be able to sustain themselves through these very difficult times of unemployment and no income to at least survive with some dignity.  God has granted so much to the Chinese nation and her people, they should not hesitate to share it.

Let us hope that the very dark days for some will be as short as possible, so that the economic jaggernaut may pick up once again, creating jobs and livelihoods for the huge number of people. 
Retraining and finds jobs in other trades may be right, and the government can of course do something to help guide the people. 

In the meantime, the CPI numbers have been favourably received, and I hope the people can venture to spend a bit more of their savings, and set a consumer boom in motion.  That would be good for this year of the Monkey, which sounds both auspicious, friendly and mischievous.  Wish you happy times.

Kind regards,
Durudarshan

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