the Designated Consumer

When the recent real estate bubble burst and the U.S. and the rest of the world fell into the "Great Recession," many people believed the U.S. would again be the "engine" to lead the world out of the recession. China's economy, for example, would be nothing without us, because the U.S. serves as the world's consumer. Without the U.S. to buy Chinese goods, the Chinese economy would go nowhere.

Well, it always seemed to me that just about anyone could be a consumer, but no, many pundits, including some economists, seemed to think that the large U.S. consuming public was the only body that could fill that role. Can't China simply consume its own goods? No, that's an over-simplistic view of the world. China is a producing nation; it can't suddenly become a consuming nation overnight.

Recently, I saw in the news that China is now giving its workers large wage increases. With those increases, the Chinese can start buying some of the consumer goods that they could never afford before. Some of those consumer goods will likely be the products that the recession-bound Americans aren't buying. Meanwhile, the Chinese ecnomy is still growing and still producing goods, and, with their wage increases, the Chinese citizens will be consuming a lot of them. And this may be just the start of the wage increases: Chinese wages are still much lower that those in the western world.

Have we lost our job as the world's designated consumer? What will our new job be?