Trouble in Toyland: U.S. recession jolts China

Source: MSNBC

For American parents, bargain prices for toys this holiday season qualify as good news: A Barbie fan who rose before dawn for Wal-Mart’s Black Friday sale could secure the coquettish “Barbie Diamond Castle Princess Liana Doll” for $5 — royally marked down from its regular retail price. At Target, a 10-pack of die-cast Hot Wheels cars also went for just $5, while a radio-controlled helicopter cost a mere $15. The price wars were enough to draw consumers out of their bunkers for their first shopping spree in months.

But wrapped up with those cheap toys are ominous economic omens for both sides of the Pacific. The rock-bottom prices show how desperate U.S. retailers are to plump up weak consumer demand — a symptom of the ailing U.S. economy and a serious problem for China, which makes nine of every 10 toys sold in American stores.

Declining U.S. orders already have contributed to the closure of at least 3,600 toy factories since the beginning of 2008, according to the Chinese government, leaving hundreds of thousands of Chinese workers suddenly out of work in this sector alone. Some of the shutdowns have triggered violent protests, a situation that could worsen if the Western recession drags on through 2009, as many economists are predicting.

“Unemployment in China could deprive a lot of people of their lifeline,” says Hu Xindou, an economics professor at the Beijing Institute of Technology. “So it could trigger social instability or even shake the rule of the Communist party.”



Read more: http://www.msnbc.msn.com/id/28037960/

companies want low wages and high sales prices

they ship jobs overseas to get low wages, while not changing the sale price to reflect that

the people who's jobs the shipped to China have little money to buy the over-priced crap they USED to make and somehow that is a surprise to the companies...

yeah those exec's sure deserve a bonus...

The scale of it doesn't make it anything different.

Each country should be making its own products within its own borders, and selling to its own people. Only trading excess. That's how it's always worked and always will. Anything else only benefits...

the profiteers. And all they do is add cost between the manufacturer and the buyer. NOBODY NEEDS THEM. ...oh, except for the speculators on Wall Street (I include the banks in that, and their legions of lawyers to keep it going).

There is a real economy, and there is a parasitic phoney economy. Globalization creates the latter, along with slave labor and fascists. Pretty simple to understand, really. The rest is smoke and mirrors, which any scam needs. We supply ours via "experts", who are overpaid to tell us (with "authority") that reality isn't reality.

As Nancy Reagan said, we should "just say 'no'" to that. Until we do, it'll never end, because these perps are so brazen they won't be stopped by common sense or even their own best interest, but only by force of law.

Who do they think they are, Communists?

They cause trouble? They get killed. And the Republicans clearly want that kind of power over American workers.

Quit buying the shit they make. Put Americans back to work.

...why China, with almost 4x the US population, doesn't have the internal demand for
the thing they produce. Or the demand for things their factories COULD produce.

A worker's revolt over there is their own problem.

buying a child's doll for $5 is a big deal.

The question is what is the cost of those dolls to the Chinese toy company? If a significant portion of the cost is now in the raw components, then there is nothing to be done. There isn't any way to develop an internal demand for those toys.

Welcome to the "bottom" in our "race to the bottom". Global Depression. Food riots.

They can shift production to anything they want.

I'm just saying that the vaunted Chinese economy is not all it's cracked up to be without robust aggregate demand.

Do you mean China breaks if we don't buy toys?

despite the fact that they can use their factories for things Chinese people can use.

Their ability to feed their children rests a little too heavily on our ability to buy
Barbies.

showed conditions that would be unbearable.

Sucks all over.

I wonder who is going to buy their dollar holdings for next to nothing?

Hmmmm...Never play poker with Americans...Over the next 2 years, I am of the opinion that we are going to see a US geo-political move that will make Nixon`s dollar hegemony play look like tiddly winks.