Thursday, February 24, 2011

Why are prices so high in China

    Some gold digging, digging gold earned a 100, he had two options, the first choice: he hired ten miners, everyone gave a dollar,mac makeup, ten dollars is ten, so he left under 90, so he looks very rich, but you know what this means is you 1 dollar, that is, a dollar can maintain adequate food and clothing.

    second option, to 5 dollars per worker. Ten is fifty dollars, he appears to be more poor. However, this second option is called the wealth with the people.

    the workers can only spend a dollar to maintain adequate food and clothing, so he will eat out after another hundred dollars to buy luxury goods,mac brushes, for example, buy a bag, buy Nike sports shoes,north face denali, etc. and so on. Ten people have to buy it, this man suddenly found out his investment opportunities, he can build a shopping mall, selling bags, selling Nike shoes and so on. He can make money, and in order to open hypermarkets, he can hire ten saleswoman.

    then ten of these ten miners and get married saleswoman, marriage gave birth to a child, then they will come up with money to buy other baby supplies. So this man also found out investment opportunities, he can sell baby products. But not only that, the miners left 2 dollars, you can buy a new house,nhl hockey, so the people also found that he not only can open hypermarkets, but also for real estate developers. Then he could build a house sold 2 dollars ten miners. One person one, finally, gold digging is done.

    When you do the second selection, ten miners and ten children grew up and married salesman, more children would buy bags, buy other items. So more investment opportunities to come out, so you can separate development, the formation of a new municipal. The new city will appear.

    If we choose the first option, only enough to maintain the wages of ten miners food and clothing. He neither the capacity nor ability to buy a bag to buy Nike sneakers, and he found that he did not investment opportunities. Finally, gold digging is done, and dozens of miners have lost their jobs. But you can not let them to unemployment, then there are social problems, there is no way this person, he only took out 40 again, building highways, building foundation construction. Because in the process of preparation and can allow them to employment, but you know, a construction worker, a person or take a dollar, or barely enough food and clothing. So, how do highway construction completed? You find that ten people and unemployed. Although you find this whole area is very beautiful highway rail, everything. However, the above without a car in the race, as dozens of workers do not have money.

    but for this man, he spent the first ten dollars to pay wages, and spent 40 highway construction, built to run after that no one, no one running is the excess capacity of the highway. And no chance to open hypermarkets, no chance to production of baby supplies. So he has no investment opportunities. This is the plight of Chinese entrepreneurs, the first dilemma: excess capacity, the second dilemma: the overall deterioration of the investment environment.

    then he saw the situation, the highway of excess capacity, no chance to open hypermarkets, no opportunity to invest in real estate, no chance to production of baby supplies. He can do? He is only 50, he can build a luxury villa, a person living in it, but we note that when you spend 50 dollars to build a luxury villa, when you suddenly find that this is your first choice for inevitable result. Your price is 50. If you do it the choice of wealth with the people, your house is two. This is why China's housing prices are so high why. Because we have done the first choice!