Most in China Living In Poverty by U.S. Standards: Analyst

with holiday shopping wrapping up for the years reports are showing that holiday sales grew this season according to MasterCard us retail sales grew about 3% from November to Christmas Eve but spending is down compared to last year's 7 and a half% Shoppers this season were faced with higher interest rates and inflation as well as less appealing discounts analysts say discounts weren't as deep as last year when stores were stuck with extra stock from the pandemic MasterCard did see an increase in sales for clothes and restaurant and a drop in electronic sales Apple scored a victory on Wednesday as a US appeals court paused the government commission's import ban on some of its popular Apple smart watches and this is following a patent dispute with the medical technology firm the tech giant had filed an emergency request for the US court of appeals for the federal circuit to Halt the order after appealing the US International Trade commission's decision that it had infringed on the patents US President Joe Biden's at Administration declined to veto the B on December 26th allowing it to take effect and apple asked for a pause of that ban a day later an Amazon Prime customers can Mark January 29th on their calendar that's when they will begin to see ads when watching their favorite shows and movies the company initially announced the plans to bring commercials to Prime video earlier this fall Amazon said at the time that the ads will allow them to quote continue investing in compelling content and keep increasing that investment over a long period of time customers do have the option of paying an additional $29 99 per month if they want to continue to watch Prime video without seeing the commercials other streaming platforms such as Netflix Hulu and Disney Plus have already introduced a tier to subscription model big oil companies fueled 2023 with massive mergers instead of burning cash on renewable energy projects last year the oil and gas industry went on a whopping $250 billion buying spree this includes Acquisitions made by Exxon Mobile Chevron and ocidental petroleum with strong share prices most of most of the deals were actually stock swaps and not big cash buys oil companies found this more valuable since Rising interest rates made funding renewable energy projects much more costly and the mergers are also a response to the us moving away from fossil fuels and toward electric cars as producers try to reduce their production costs if improving your credit is on your New Year's resolution you're not alone a majority of Americans told the nerd wallet they want Better Credit in 2024 to protect your credit stay on on top of payments and if you did overdo it on holiday gifts carrying debt and making minimum payments will keep your payment history intact and shield your score but if your credit card account becomes delinquent pay the bill as soon as possible to prevent more damage from being done and as for student loans Mis payments won't be considered delinquent until next September but interest will keep adding to the balance if you want to turn to more credit experts suggest only borrowing more if necessary and to compare annual fee and interest rates when you do a lot of California pizza delivery drivers may be looking for a new job in the delivery industry or new lines of work in fact many California Pizza Huts are getting rid of drivers altogether and this is due to a raise in minimum wage andd sh Marshall has more a minimum wage hike to $20 an hour is too much for some California Pizza Hut franchises to pay delivery drivers according to federal employment notices reviewed by Business Insider in ail 2024 multiple Pizza Hut chains are bracing for the worker adjustment and retraining notification act the ACT requires employers to give notice of plant closures or mass layoffs eliminating Pizza Hut in-house delivery driver services at hundreds of stores resulting in more than 12200 driver layoffs a driver who wished to stay Anonymous for fear of retaliation told Business Insider that he was offered $400 severance pay if he stuck around through his February 5th layoff date the the money they are giving us as severance pay is a slap on the face he said it comes to $3 a month for 9 plus years of service another operator Southern California Pizza Company also announced layoffs of around 841 drivers across the state Pizza Hut locations in Riverside Los Angeles orange Sacramento San Bernardino and ventur counties will be affected the job will be left up to delivery apps like Uber Eats GrubHub and door Dash Sean Marshall ND news according to a new report somewhere around 900 million people in China are only earning around 2,000 yon per month and now if you convert that to US Dollars that's somewhere around $300 per month imagine that here's more and now joining us is Antonio grao China economic analyst so Antonio around 900 million Chinese people uh living around less than $300 a month let me just get your first reaction to that uh from this report that we got uh today yeah no that's that sounds absolutely right um you know I've been working in China for many years been a China Economist for many years and I lived in China and yeah I mean the income disparity in China is just absolutely staggering the average income in China officially is let's say it's about $122,000 a year but the vast majority of people do not earn $122,000 a year you know the vast majority people earn about $300 a month that's uh what about $3,600 a year which puts them on par with with India but even the $112,000 figure puts them on close to uh Mexico and just a little bit above Malaysia so you know China is the second richest country by GDP but it is the 72nd richest country by per capita GDP so they're only number 72 in terms of the wealth of the average citizen but that is only an average that average has no meaning at all because there's such a huge disparity between rich and poor in China I mean is that enough for everyday life for the average Chinese citizen uh less than $300 a month it's enough in the sense that they can they can pay rent and they can eat uh so if you're you know a poor Chinese person you're earning $300 a month you have some kind of an absolutely unenviable apartment that you're living in just some sort of terrible concrete block construction you may not have indoor heating you know once you leave the cities once you get outside of the Cities uh a lot of people don't have uh indoor heating they have um these little uh burner canister things that they'll put like next to their desk or something to keep them warm uh there's no air conditioning of course and a lot of people don't have indoor plumbing you know you you have ouses in a lot of lot of places you know I was in Jung Joo like I was in a whole town a whole town in Jung Joo that did not have a single flush toilet in the whole town I was I was a guest of the richest man in the province or something and like he had this this big luxurious house that did not have flush toilets so I mean yeah it's it's people live very poor lives in most of China and if you look at big cities like Beijing and uh Shanghai the ratio of housing prices so to purchase an apartment in Shanghai it the purchase price equal to 90 times the average salary and to put that in perspective in New York which is one of the most unaffordable uh cities in America in New York it's 10.5 times annual salary so the average apartment costs 10.5 times the average salary in Shanghai it's 90 times so we are talking about people that are living in some sort of world where they can afford that apartment and in that same world you got people with no no plumbing and $300 a month of income are are most people in China living below the poverty poverty line so that that's a very good question so the poverty line is set based on the income band of a country so in other words for the United States because we have a particularly High GDP per capita we our GDP per capita is $70,000 a year that puts us about number seven or eight in the world so there's countries like Singapore uh Dubai by uh where the average citizen is richer than the average American but but you know we're number seven or eight uh that's quite respectable uh $70,000 a year so our poverty line is about $112,000 so by our standards the average person in China is living in poverty because they're earning you know about $122,000 now the way poverty lines work however is based on the income band of the country so given China's income band most economists feel that the poverty line should be5 to $10 a day but China insists on trying to use the $2 figure well with the $2 figure they have very uh a small percentage of population living in poverty but if we were to raise the uh poverty line to $10 a day you'd have something like 60% of the population living in poverty so uh can you elaborate further uh why exactly China prefers this $2 figure because xiin ping is very fond of saying I raised 800,000 or 800 million people out of out of poverty and um you know if we find out that 60% of them are still living in poverty he can't say that anymore I see okay uh so where does the state get its wealth from because uh it comes in the US it comes from taxes right so if people are making so little money uh where does China get its wealth from so yeah you're absolutely correct in the United States the largest source of Revenue to the government is the tax base and the US tax base is actually the largest source of Revenue I believe in the world for any government uh in terms of taxes because we have such a large population with such a high income and extremely high percentage of enforcement of the tax rules so when you go to China now you do have income tax the income tax rate is lower the incomes are lower so the government has to make money on on on other uh businesses and other uh sources so uh governments collect money from um tariffs from uh from fees from fines right when you get a traffic ticket that's uh revenue for the government local governments in China make their money from land sales uh and remember that we have state-owned Enterprises that also make money for the government and you know if you're outside of China you might know that there are state-owned Enterprises that are doing mining in South Africa or whatever in Africa or someplace you have mining companies and and dams and hydroelectric and and oil that are state-owned Enterprises but when you're inside of China what you find out is there's hairdressers and restaurants and things like that that are owned by the government and then this is then providing Revenue to the government so you you mentioned income dispar disparity earlier what what are the impacts on the economy when there's such an extreme imp uh income disparity well the uh income disparity so the Genny Genny coefficient is the measure of income disparity and the higher the number uh the more disparate the income is and so in the US I think we're around four and um the EU the uh World Bank the IMF they've always warned that if it goes well above five that you'll start to have social unrest you know instability you know because the poor people will start revolting um because there's you know they're so poor so we have countries in Africa for example where you know the Gen coefficient is 6.5 six you know very very high disparity and it just creates instability now in China I personally believe that the Genny coefficient is much higher than the official government number because the number we're using is the government number and um right now I think it's about 4.6 may even be a little lower I think it was 4.6 during 2022 it's a little bit lower now now that's higher than Western Europe it's higher than Japan but you know it's on par with the United States so but we don't really see instability won't we don't see riots we don't see you know bread riots or something like that going on in China so the so the question is I don't know how high the number has to go for China to to have instability um I mean there's other problems that people just don't have disposable income and shanping wants to shift the economy to a consumption economy and that won't work if the people don't have money to spend all right another question is seeing all the problems that China's economy is facing uh is the monthly income from around $300 right now is that going down uh that's a good question I my I would say my gut feeling is that it is going down because a lot of these people were achieving even uh that level of income by working in a factory where they were getting um you know overtime and they working weekends and 10 hour shifts and things like that and that's going away now that's steadily reducing the factory output uh Factory employment uh exports those are all going down now so I would have to believe that it is trending downward I know that during covid the wealth disparity increased tremendously in China and I think that probably was a function of people at the top have sources of income for example I don't know if that that Investments overseas or related to some some service that they were able to provide during covid but then the people that were working in factories and construction they couldn't work so their income went down that disparity increased um I think that moving forward I think that's what we will see as well is that as construction is winding down infrastructure investment is winding down foreign direct investment is winding down I think we're probably going to see the uh disparity increase more because it's probably disproportionately going to hurt the people at the bottom of the uh the financial ladder and and you're saying you don't really know where the limit is uh when people will start to uh Rebel yeah I mean you know the the the old wisdom is that people will Rebel when they can't eat you know when things get so bad that that you know they don't have enough food that's when they're they're going to Rebel um in China though food is relatively cheap you know so I I just just wrote an article about this and I was saying you know you can get a haircut in Shanghai for $5 in the countryside I'm sure you can get one for a dollar still um and you can still get a meal for a handful of coins so there is food I me these people are not starving but in China you know the the public education system is inadequate and the students have to pass and do well on the galow in order to go to a good University the only way that that happens is If the parents pay for supplemental education so most families uh are spending about a third of their income on supplemental education for their children so that's one of the first things that gets cut when the economy goes down now they can't put their kids in school if you can't put your kids in school or if they can't get into University that's going to increase the uh income disparity in the Next Generation and it's also going to add to the possibility that people would protest that they would go on the street and say you know it's not fair that my kid can't go to university and um you know even if they have enough food to eat you know they're always thinking about the future as well all right let me let me follow up on a earlier point that you mentioned uh and that's on how the state gets its income so the Beijing is trying to compete compete with the United States in terms of military and that takes money right so is China getting its money the way that you mentioned before uh when it comes to uh military expansion yes it is and and actually that's why you know I'm so much in favor of um trade restrictions on China and investment restrictions on China because every dollar that we give to China whether it's through buying their products or allowing them access to our Capital markets every dollar is being funneled back into uh mil Ary development and achieving China's 2049 goal 2037 goal of uh surpassing the United States militarily and that cost a lot of money and Beijing needs money to do that um Beijing unlike uh say a western democracy in in Europe or something would probably be willing to allow the standard of living of the people to suffer in order to continue to fund the military so in other words if the economy continues in a Down Trend at some point she will have to make a choice between whatever it is school lunches and more bullets and uh there's a good chance that she will choose more bullets does that mean uh she would rather have uh a more military uh focused economy rather than for the people I think absolutely so and and also they have very high youth unemployment right now and if they could discourage young people from going to college there would be uh greater probability that those kids would be willing to take low-level jobs and then there would be be uh you know lower youth unemployment so right now there are some jobs available but the kids don't want them and I don't blame them because they pay $300 a month you know and they went to college and they want to have good jobs in the city or something so if you could discourage kids from going to college well then you going have fewer graduates you're not going to have so much problem finding a placement for them you're going to have more workers available for the factory and you'll have more volunteers for the military and uh yeah I could easily see uh she shifting his priorities which he has been he's been shifting them towards power and towards um achieving his his uh policy goals as 249 goals of surpassing the United States rather than uh really improving the quality of life for the people all right maybe one more question uh do you think the state of the Chinese economy will improve uh in the coming months into next year the year after because the US Federal Reserve has hinted that they're going to cut interest rates and that could lead to a easier Financial environment uh in the United States and that could have an impact on China as well so do you think China's situation is going to improve you know that that that can be the case if if the US were to cut interest rates it might encourage some investment to return to China um it may cause some Capital to flow back into China so there could could be some alleviation of the current um Trend but I do believe that the current trend is the the the the permanent Trend which is a general slowing of the Chinese economy moving forward and eventually normalizing at whatever the number is going to be three and a half% growth or something like that but uh but yeah so so you know you always have these these situations like you had Christmas orders Christmas orders helped a little bit um you know you have the uh you know the s day purchases the all these things help a little bit us cutting interest rates it's it's going to help a little bit but I mean us is not going to cut interest rates back to 1% right they're going to reduce them from where where they are now so I think it'll give a little bit of relief to to Beijing but there's so many other problems uh that will remain and persist so that's including the housing market uh Unemployment uh do so are you saying there's a bottom to to the Chinese economy you're saying around 3% uh well yeah I'm just picking that number because the US is a mature economy but but we tend to grow at about 2% China is not yet a mature economy so I think that it's going to normalize somewhere around 3% and also if we look at countries like um Vietnam and some of the others that had very rapid growth just like China did and then you know then the economy start you know Malaysia would be a good example too and the economy begins to level off and it will still grow probably faster than the United States in terms of percentage points but maybe not in dollars um so yeah I'm not actually predicting a bottom I'm just saying that that that is what will happen we you know China will reach a bottom whatever that bottom is going to be but I do believe that bottom will be higher than than what ours is is negative growth likely in your view that's a good question I think that shortterm anything short-term medium-term anything is possible I don't know that long-term negative growth is really uh possible but yeah I mean we have these precis consistent problems these um uh these embedded problems that are not being addressed the youth unemployment being one of them you know you said the the real estate situation you know you have tons and tons of unoccupied unsold overpriced real estate what are you going to do with that uh the prices are going to have to come down tremendously for people to be able to afford them you can't have you just it's unsustainable to have a market where the average apartment is 90 times the average salary and the irony of that number of 90 is that in China you can't actually own the property anyway you just have a 70-year lease so theoretically the the property if you put your whole salary towards the the mortgage every year when you died there would still be 20 years left on the note it still wouldn't be paid off so obviously these are unsustainable uh you know economic conditions that need to be resolved and until China resolves them any any guess on what GDP growth you know is going to to be really is just a guess well all right thank you so much for your Insight today Antonio thank you Don humanoid robots like NASA developed Valkyrie are poised to play a greater role on Earth and Beyond in the coming years Engineers believe that the right software humanoid robots can function similarly to humans by using the same tools equipment and methods of maneuvering itself here's the story meet Valkyrie NASA's humanoid robot standing over 6 ft tall and weighing 300 lb she cuts an imposing figure she is designed to Opera in challenging environments such as areas hit by natural disasters but she could also one day operate in space so we're not trying to replace humid Crews we're we're really just trying to take the uh dull dirty and dangerous work off their plates Shan azimi is the dextrous robotics team leader at Nasa he said humanoid robots which resemble humans could potentially handle risky task in space so astronauts can prioritize exploration and Discovery with the right software it says a humanoid robot could use the same tools and equipment as humans for instance robots could be tasked with cleaning solar panels or inspecting malfunctioning equipment outside the spacecraft in particular with a humanoid robot it's very intuitive to be able to directly dve the arms and move the head um and that's what we're going to see with uh with Valkyrie today um but when we're thinking ahead to um operations from Earth we will be operating with a much higher degree of autonomy where the human operator on Earth will be um more strategically giving the robot tasks and the robot would be responsible for completing those tasks autonomously back on Earth NASA has partnered with robotic company atronic which is based in Texas it wants to learn how ectronic Earthly robots could benefit future robots destined for space they want to see a viable system on Earth before we take these systems into space into Mars into onto the the moon Nick Payne is the chief technology officer of the firm which has been developing Apollo a humanoid robot whose Earthly task will include working in warehouses and manufacturing plants it is being developed to move packages and stack pallets the company plans to start providing the humanoid robots to companies in early 2025 pay says Apollo possesses clear advantages over its human counterparts particularly endurance we're targeting having this system online 22 hours a day and so um there's multiple ways to do that you can have a kind of trickle charge if you want to have a tether on the robot alternatively um this does have a swappable battery so you can work for 4 hours swap the battery and then keep going in a very quick uh duration so we're looking at kind of keeping the system online for uh the most amount of time that we can robots like Apollo are designed with modularity in mind to be able to adapt to many applications and uh you know that's where NASA is really trying to get that insight to see um what are the key gaps where we would need to invest in the future to bring a terrestrial system into the space environment and certifi uh for operating in space