International Economy: Similar Development In The World

The world is getting more and more similar. The price of ECCO shoes in Denmark shop is almost the same as that in the Beijing store. ECCO

In my recent trip to Europe, I found that, in addition to some service - related prices, almost all famous brand clothing, leather shoes, and cosmetics prices are converging.

The speed of economic globalization is a bit too fast for people to adjust to.

But this world is obviously not so similar. Economists are more willing to use "different stages of development" to express.

In Denmark, it is not the increase in gross domestic product (GDP), but the decrease in energy consumption.

I also read in Swedish newspapers that the first issue of the first happiness conference held in Goteborg not long ago was "why GDP growth does not necessarily bring happiness".

For the countries that are in the process of modernization, the growth of GDP is still the initiative to create happiness.

An interesting contrast is that in the 60s and 70s of last century, when the GDP of Sweden and Denmark grew rapidly, the happiness of people there was the fastest growing.

While some countries are still feeling the happiness of GDP growth, other countries have entered the period when GDP growth and happiness are out of line, and the world is actually in two levels.

In a more professional term, the contradiction between the post-modern countries and the modernization process, the Chinese and the pre modern countries.

Almost all the difficulties encountered in the development of the world economy can be found in these two levels of contradictions.

For example, one of the problems we often talk about now is whether to use more corn to make fuel, or to use more corn to save the poor who are still hungry.

Using corn as fuel will undoubtedly contribute to the improvement of the climate. It will be a great thing for the post-modern countries that already have enough food and clothing. But because of the rise in grain prices, it will obviously be unfavourable to the countries that are still in another stage of development.

This is really a "dilemma".

Another example may be more revealing.

Over the years, Danish ECCO shoes have developed greatly through internationalization.

In 1974, ECCO shoes began importing shoes from Brazil, and then set up factories in Indonesia, Thailand and other countries.

The result is not only the development of developing countries, but also the market competitiveness of the brand.

The development of ECCO shoes fully shows the integration aspect of economic globalization. Especially for those countries that produce ECCO shoes, the growth of GDP will bring about the growth of happiness.

However, things are not that simple.

The production capacity of ECCO shoes has increased, and the problem of global manufacturing and consumption splitting has not been completely solved. Part of the country's economic growth depends on manufacturing and exports, while others rely on borrowing and consumption.

When ECCO shoes lower the price space more and more hours, there are only two ways out: to make those who can afford it continue or buy more ECCO shoes, or to create more affordable consumers.

Otherwise, the development of ECCO shoes may stagnate or even retrogress.

To enlarge this phenomenon to the global economic level, whether stagnation or retrogression will occur will ultimately depend on whether there are more and more capable consumers. To be precise, it is the American consumers, because there is no other economic fitness in the world to replace the American consumption power.

We have been talking about this imbalance for a long time, but now the problem may be that the wolf is really coming.

It is estimated that the subprime crisis is making American consumers increasingly unable to borrow money, which may reduce the growth of US domestic demand this year to 1.9%, far below last year's 2.9%.

This is certainly not a good thing for a country that still relies on GDP growth to create happiness.