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I totally agree with Tom Holland's Monitor column ("Logic of China's economic growth policies Orwellian", July 19).
The problem of a consumption-driven economy is finding the answer to the question: "Who is buying what, from whom?"
Who thinks that the Chinese, the best savers in the world, will rush out to buy "stuff" when their overall economy is declining.
I returned to Britain in 1990 after some years overseas, and was confronted with the service economy.
There were a lot of people selling services to each other. I worked for a US manufacturer. We had no British competitors apart from one company in one small segment of the market, and another in a market segment that we did not serve.
My old company now owns both of those and production has moved outside of the UK.
Service industries made up 80 per cent of the economy and manufacturing was dismissed by such as Eddie George, at that time the governor of the Bank of England, at a meeting in Manchester, as unimportant.
My thoughts then (and still today) were that you cannot sustain an economy selling hamburgers to each other.
Of course the pride and joy of the UK service industry was the financial sector. I think no further comment is required.
The reason why Europe and the United States to a lesser extent are struggling to come out of recession is that they make very little to sell to people outside their own country.
Who wants to buy the services of a Spanish bank or anything from Greece apart from some olive oil, which they can also get from Italy, Spain and Portugal?
Governments spent and borrowed money that they could never pay back and created an entitlement society.
Now they are just recycling the same money.
Federal Reserve chairman Ben Bernanke prints money, lends it to the banks at zero interest rate and then borrows it back at 2 per cent per annum.
Five years on and the American economy has hardly moved, despite President Barack Obama's belief that governments can create jobs.
To quote former British prime minister Margaret Thatcher: "The problem with socialism is that sooner or later you run out of other people's money."
It now seems that the Chinese politicians want to go down the same path, which is complete madness.
Michael Jenkins, Central


Pitfalls of consumption-driven economies

Consumption-driven economies may not be the best solution. Photo: AFP

Logic of China's economic growth policies Orwellian

Opinion

Letters

The problem of a consumption-driven economy is finding the answer to the question: "Who is buying what, from whom?"


Pitfalls of consumption-driven economies

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The problem of a consumption-driven economy is finding the answer to the question: "Who is buying what, from whom?"

The problem of a consumption-driven economy is finding the answer to the question: "Who is buying what, from whom?"