1/5
SME owners complain that they are being squeezed by rising wages, and social security and health insurance costs. The irony is that their biggest problem is weak consumer demand, which is itself caused by low wage growth and a weak social safety net.
ft.com
SME owners complain that they are being squeezed by rising wages, and social security and health insurance costs. The irony is that their biggest problem is weak consumer demand, which is itself caused by low wage growth and a weak social safety net.
ft.com
2/5
In the medium and long term it is only faster wage increases and stronger social safety net contributions that can power rapid growth in China's extremely low consumption level.
In the medium and long term it is only faster wage increases and stronger social safety net contributions that can power rapid growth in China's extremely low consumption level.
3/5
This is why, I would argue, that it has always been so hard to transition from a low-wage, export-oriented economy to one in which domestic demand drives growth. Greater domestic demand requires a redistribution of income to households to make up for the very low...
This is why, I would argue, that it has always been so hard to transition from a low-wage, export-oriented economy to one in which domestic demand drives growth. Greater domestic demand requires a redistribution of income to households to make up for the very low...
4/5
...share they retain, but in the near term this redistribution is painful to manufacturers and exporters, especially because their export competitiveness depends precisely on the low share of GDP households retain.
...share they retain, but in the near term this redistribution is painful to manufacturers and exporters, especially because their export competitiveness depends precisely on the low share of GDP households retain.
5/5
If Beijing really wants to boost SMEs in the near term, it must have local governments pay the redistribution costs, but this has proven politically very difficult in the past.
If Beijing really wants to boost SMEs in the near term, it must have local governments pay the redistribution costs, but this has proven politically very difficult in the past.
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