Seven Reasons Why We Should Not Depend on Imported Goods from China

It seems to me that the situation in China is far different from what most people think it is. Even if we would like to depend on China, we really cannot.

Reason 1. When we depend on goods from China, an amazingly large share of the world’s industrial activity gets concentrated in China.

The five largest users of energy in the world are China, the United States, India, Russia, and Japan. The International Energy Agency shows total energy consumption as follows for the year 2016:

Figure 1. IEA’s estimate of energy consumption (total fuel consumed, or TFC) by sector in 2016 for the top five energy consuming nations. Mtoe is million tons oil equivalent. Source: IEA. Non-energy use is the use of fossil fuels as a material to create end products that are not burned. Examples include medicines, plastics, fertilizers, asphalt, and fabrics.

When these countries are compared, restricting our analysis to the portion of energy used by industry, we find the rather disconcerting result shown in Figure 2:

Figure 2. Chart by the International Energy Agency showing total fuel consumed (TFC) by industry, for the top five fuel consuming nations of the world.

China consumes more fuel for industrial production than the next four countries listed (United States, India, Russia, and Japan) combined. Of course, we don’t know exactly the corresponding amounts for other countries of the world, but we can observe that if a country is concerned about its CO2 emissions, the easiest way to reduce these emissions is to send heavy industry elsewhere, such as to China or India. There are likely many countries that are primarily service economies, thanks to the option of outsourcing most industry to other countries.

Much of the discussion I have read regarding sending industry elsewhere has been in the direction of, “As advanced as our economy is, we don’t need heavy industry; service jobs will substitute. Industry can be developed at lower cost elsewhere. Everyone will be better off with this arrangement. The invisible hand will provide jobs and goods and services for everyone.” In addition, corporations saw the possibility of adding customers from around the world. Not too many thought about the real-world problems that might result.

Clearly there is a problem with the jobs being lost to China and other Emerging Markets. When new service jobs are added, they often do not pay as well the industrial jobs they replaced. In fact, there might not be enough jobs in total, if automation plays an important role as well.

Another issue is that the level of industrial concentration can be a problem. We are now depending on China and perhaps a few other countries to provide for a large share of the “stuff” we use. Even if China is not the only provider, it is often an important part of the supply chain. If something should go wrong (for example, widespread riots in China), we don’t have a Plan B.

Reason 2. China needs energy products to make the goods it uses for itself and for the goods it exports. China’s own energy supply is faltering. Because of China’s huge size, it is becoming increasingly difficult to keep China’s energy consumption rising sufficiently rapidly using imported energy.

China’s own energy production is shown in Figure 3. (Note: Hot off the press! New BP report released this week.)

Figure 3. China energy production by fuel, based on 2019 BP Statistical Review of World Energy data. “Other Ren” stands for “Renewables other than hydroelectric.” This category includes wind, solar, and other miscellaneous types, such as sawdust burned for electricity.

It is easy to see that China’s coal production hit its highest point in 2013 and has stayed at a lower level since that date. Also, China’s highest oil production occurred in 2015, with lower production since that date. China’s total energy production has been rising recently, but only with great effort. Total energy production is only 8.9% higher in 2018 than it was in 2012, implying an increase of less than 1.5% per year, relative to 2012 amounts.

A standard workaround for inadequate energy production growth is imported energy products. Even with these imports, it has been impossible to keep total energy consumption rising as rapidly as it rose in the 2002 to 2007 period. The cost with imports is greater, also.

Figure 4. China energy production by fuel, plus line showing its total energy consumption (including imports), based on BP 2019 Statistical Review of World Energy data.

In 2018, China imported 71% of its petroleum (either as crude or as products), and 43% of its natural gas. It was the largest importer in the world with respect to both of these fuels.

In 2018, China’s coal imports shrank as its own coal production surged. This was almost certainly a change planned by China. China would much prefer producing its own coal (and keeping the jobs within the country) to importing coal from elsewhere. China imported 4% of its coal from elsewhere in 2018.

Reason 3. The commodity demand from China is so huge that, to a significant extent, it determines world commodity price levels. Where regional energy prices exist, China’s choice regarding whether or not to import from a country can influence local price levels.

Chile is the largest copper producer in the world. A recent article regarding problems associated with lower copper prices notes that the demand for Chilean copper has been driven “almost entirely by the expanding Chinese economy over the last three decades.” For many commodities, China consumes over half of the world’s commodity supply. If China’s industrial demand is growing, prices will tend to rise, allowing more of the mineral to be extracted. Higher commodity prices tend to be needed over time because the ores of highest concentration (and otherwise easiest to extract ores) tend to be extracted first. Ores extracted later tend to be more expensive to extract, so higher prices are required for extraction to be profitable.

This situation of China playing an extremely large role in commodity prices holds for a very large number of commodities. If China is building widgets or any other product, using a particular commodity, China’s need to buy this commodity in the world market will tend to hold up world prices for the commodity. This situation holds even for fossil fuel prices.

Reason 4. Over the next few years, China’s coal supply is likely to fall significantly because of depletion. This lower fuel supply is likely to lead to a shrinkage of China’s industrial capability, and, indirectly, falling world commodity prices of all kinds.

The problem that China is encountering in Figure 3 is “peak coal.” This is a similar problem to that encountered by the United Kingdom immediately before World War I, and to that Germany encountered just before World War II.

Figure 5. The timing of the peaks is peculiar, relative to wars.

Coal tends to be the industrial fuel of choice because it is cheap. Goods made with coal tend to be inexpensive, especially if wages paid to workers are low and if the company making the goods does not spend much money on pollution prevention. Hydroelectric can be an adequate substitute for coal, if the water flow can be depended upon. Wind and solar are too intermittent and not sufficiently inexpensive to be adequate substitutes for coal. Wind and solar (included in “Other Ren” on Figure 3) are also far smaller in quantity than coal.

Outsourcing a large share of the world’s manufacturing to China seemed like a great idea back when it was started, often in the early 2000s. If, at some point, China cannot really handle the responsibility it has taken on, outsourcing gets to be a huge problem.

The reason why coal prices cannot rise very high is because if they do, the prices of finished goods will need to rise as well. Wages of workers around the world will not rise at the same time because the higher cost of production takes place due to something that is equivalent to “growing inefficiency.” The coal mined is of lower quality, or in thinner seams, or needs to be transported further. This means that more workers and more fuel is needed for each ton of coal extracted. This leaves fewer workers and less fuel for other industrial tasks, so that, in total, the economy can manufacture fewer goods and services. Because of these issues, countries experiencing peak coal are pushed toward contraction of their economies.

Unfortunately, rather than leading to high prices (to compensate for the higher extraction costs), running short of inexpensive-to-extract fuel tends to lead to war, or to tariff fights. Countries whose coal is depleting will try to maintain their own supply as long as possible. They will invent excuses to stop importing coal. Back in September 2018, the Financial Review reported, “China has introduced unofficial restrictions on coal imports in a bid to prop up domestic prices by slowing down customs approvals at key ports.” China needed higher internal prices to make it profitable to extract coal from its depleting coal mines.

Figure 6. Chart showing prices of Brent Oil, China Qinhuangdao Spot Coal price, and Asian Marker Coal, all in US$ of the day. Amounts from BP 2019 Statistical Review of World Energy. Note also that the units of coal (ton) are much larger than the units of oil (barrel) used on this chart. Thus, the same number of dollars of buys a much larger quantity of coal than of oil; coal is cheaper.

If higher coal prices really were possible over the long term, it would make it possible to open new mines in more distant locations. The location of coal mines is important because transport costs by rail or truck tend to be high. China built the large ghost city of Ordos, Inner Mongolia, on the expectation that coal prices would rise, making development of coal in the area profitable. Unfortunately, coal prices fell, making the project not economic. I visited the area in 2015, after teaching a short course on Energy Economics in Beijing. There was a large almost empty airport, and few vehicles were using nearby multi-lane roads.

Reason 5. All of the concern about future tariffs artificially raised China’s 2018 industrial production and commodity prices. Because production was brought forward into 2018, China’s production and world commodity prices can be expected to be lower in 2019 and in future years.

Manufacturers wanted to front-run tariffs, so they tended to ramp up production in advance of the tariff implementation date. This higher production in turn tended to raise commodity production and prices around the world. Note on Figure 6, above, that coal and oil prices are both higher in 2018 than in 2017. Prices in 2019, not shown, are tending to trend downward again.

China badly needed higher coal prices in order to help its coal extraction. Thus, part of the reason that China was able to continue to function as well as it did in 2018 was because of all of the discussion about future tariffs. If this discussion had not taken place, employment in China would likely have been lower. With this lower employment, sales of automobiles and smartphones would have been lower as well.

Note, too, that even with the demand brought forward into 2018, China’s economy was not functioning very well in 2018. Private passenger automobile sales for the year fell by 4%. Smartphone sales fell by a worrisome 15.5%. Clearly, workers were having difficulty buying the kinds of goods a person would expect a growing economy to be selling. I would attribute these problems to the peak coal problem mentioned earlier, making it increasingly difficult to increase the amount of industrial operations provided by China’s economy.

Reason 6. The Chinese economy has been gradually changing and adapting to hide its energy problems. Even more changes will be needed in the future, potentially affecting the world economy, with or without tariffs.

The Chinese economy reports carefully massaged GDP numbers, which many analysts consider to be inflated in recent years. Its debt level keeps rising to try to keep all of its operations going.

We know that China discontinued one major industry at the beginning of 2018: recycling plastic and other types of low-valued recycling. With low oil and natural gas prices, this type of recycling cannot be profitable. Of course, discontinuing a major industry can be expected to lead to a loss of jobs within China. But, on the positive side, it frees up coal and other energy resources in China for other industries that can (perhaps) make more profitable use of them.

On a world basis, the loss of the plastic recycling industry becomes a problem. If rich countries are willing to subsidize the cost of sending plastic recycling to China, this subsidy allows containers that bring goods to rich countries to be sent back to China with a paid load inside. Thus, operating the plastic recycling industry helps keep the cost of shipment of goods from China to the US or Europe down because the shipping costs only need to cover the one-way cost of transit, rather than also covering the cost of shipping the empty container back. Without the subsidy to pay the freight of the plastic recycling, costs for the shipping industry rise, making international trade more expensive. Eliminating the subsidy that rich countries are paying to ship otherwise-empty containers back full of mixed trash is part of what pushes the world economy to contraction.

Other countries are not taking over very much of China’s role in recycling plastic, either. The net effect is that the loss of recycling is one of the things pushing the world toward contraction.

China has no doubt been cutting back in other ways as well. It is likely that it is not building as many uninhabited cities and roads that are really not needed. Ugo Bardi recently posted this chart showing global cement production.

Figure 7. World Cement Production by Ugo Bardi from a blog post on January 19, 2019.

China produces over half of the world’s cement; part of the reduction we are seeing relates to China’s falling use of concrete in new buildings and roads.

In some cases, China is moving in the direction of being a service economy. A recent video states that of the $237.45 cost of producing an iPhone in China, Chinese workers only provide assembly services, worth $8.46. The US contributes $68.69 of the cost, mostly in the design and distribution phases. The parts are generally outsourced from other parts of the world.

One way of looking at what is happening in China’s economy is to analyze the country’s oil consumption in terms of the relative amounts of diesel (used primarily by industry) and gasoline (often used by private passenger vehicles).

Figure 8. Gasoline and diesel consumption for China, based on data from 2019 BP Statistical Review of World Energy.

Based on Figure 8, it appears that China’s industrial growth suddenly leveled off about 2012. This, not by coincidence, is about the time that China’s coal problems were becoming apparent in China. China’s gasoline consumption has continued to rise, however. It appears that once it became apparent that its coal supplies were starting to seriously deplete, China began to “grow” China’s economy more as a service economy. After 2012, most growth seems to have come in the non-industrial sectors of China.

Reason 7. A major concern should be a financial collapse, far worse than 2008, both in China and for the world as a whole.

The world needs growing energy supply to support the world economy. China is increasingly having difficulty with its energy supply. When China has trouble with its energy supplies, the world as a whole has a problem with its growth in energy supplies.

A few months ago, I showed the role China has played in the world economy is this chart:

Figure 9. Ten year growth in world energy consumption, divided between the blue portion associated with rising population, and the red portion associated with higher energy consumption per capita, which I have called “Living Std.”, meaning “Higher Living Standards.”

China added a little bump in GDP growth at the end of the nearly 200-year time period shown, after it joined the World Trade Association in December 2001. The energy added by China (mostly in the form of coal) allowed the world economy to continue to grow, when it otherwise would have been up against limits.

Now we are reaching a situation where China’s energy production is likely to flatten or fall because of the depleted state of its coal mines, and the fact that coal prices can’t rise high enough, for long enough, to open new mines. The world economy, over the period shown, has always had rising energy consumption. In most cases, energy consumption rose faster than population growth, allowing some growth in the standard of living over time.

Changing to a situation of shrinking energy consumption per capita would likely be extraordinarily traumatic. Population would likely fall. Commodity prices would drop to low levels. Debt would tend to default; prices of shares of stock would fall. Many governments would fail. If shrinking energy consumption per capita starts in one country (whether China or elsewhere), it could easily spread to other countries around the world.

We don’t know what is ahead, but we know that the low points on Figure 9 were very bad times, even though energy consumption in total was not contracting. The decade of 1860 to 1870 was the decade of the US Civil War. The decade of the 1930s was the decade of the Great Depression. The decade of the 1990s was the decade of the collapse of the central government of the Soviet Union.

We also know that world energy consumption and GDP growth tend to be highly correlated.

Figure 10. World GDP Growth versus Energy Consumption Growth, based on data of 2018 BP Statistical Review of World Energy and GDP data in 2010$ amounts, from the World Bank.

This is as we would expect, because energy consumption is required for the many aspects of GDP growth. Transportation, heating and/or cooling, and electricity all require energy consumption, for example.

The recent divergence between GDP and energy consumption on Figure 10 may be the result of overstated GDP amounts by China, India, and other countries. If a country wants to appear inviting for new investment, there is a temptation to overstate GDP since other countries seem to be doing so, without penalty.

Back during the Great Recession of 2008-2009, our problem was with homeowners who took out loans that were far higher than they could really afford. Today, we have whole economies taking on more debt than properly stated GDP reports would suggest they are able to handle. We go from one version of optimism regarding debt levels to another.

Conclusion. If a person doesn’t understand how badly the energy situation is working out for China, or how important energy consumption is, it is easy to think that the problems China is facing are primarily tariff-related. In fact, China’s situation is a very worrisome one, with or without tariffs being added.

To fix the situation, China would need a very cheap, non-intermittent, locally produced, non-polluting additional energy source. This energy source would also need to be rapidly scalable. Such an energy resource doesn’t appear to be available.

 

 

 

 

 

 

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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890 Responses to Seven Reasons Why We Should Not Depend on Imported Goods from China

  1. Re-election campaign scam, unicorn promises or not, POTUS has just announced the mass deportations of illegal aliens are about to commence NOW for real. In total the number is like ~10M people affected, which is obviously a big aggregate demand for the US economy, also jobs etc.., so not sure how serious and how many individuals will be actually deported before the next elections..

    This will also possibly corroborate the OFW story about plausibility of sanctions/tariff war as illegals (repatriating money to Latin America and depressing wage levels in the US) is integral part of circling the wagons around insular national economy (theory).

  2. Yoshua says:

    ECB is ready for more stimulus to fight low inflation. The time has come to end old rules and buy moooooore debt.

    https://www.euronews.com/2019/06/18/ecb-will-provide-more-stimulus-if-inflation-doesnt-pick-up-draghi

    • Xabier says:

      I’d dearly love to be stimulated by Signor Draghi, but the last 10 years really haven’t done much for me, or most there people. not like that terrific ride pre-2008.

      He’s a washout.

      All talk and no trousers: so Italian……

      • ssincoski says:

        I’d like to see him give every family 1000Euro per month with the only stipulation being that it has to be spent. Maybe some kind of time limited debit card. Spend it or lose it. If their real goal was to stimulate growth this would be much more effective than giving money to his banker friends. Of course not good for the environment but what can you do?

        • Tsubion says:

          No need for more plastic.

          Just an app on your smartphone.

          Still… that’s a lotta lotta fantasy money every month just to keep people fed and drugged.

      • Yoshua says:

        Mario printed and pumped in 4 Trillion euros into the euro zone. It is the best money making machine ever created by an Italian.

        Well…the Italian mafia is also printing euros…but not on the same scale…

        I have never heard him talk…but I’m sure he is wearing trousers when he does.

        • Xabier says:

          But he left me feeling flat and unsatisfied, after such big promises. What went wrong? 🙂

          • Harry McGibbs says:

            That’s what happens when you substitute monetary via*gra for true passion, Xavier. Mario left us feeling cheap. 😦

          • Yoshua says:

            Mario:” I will do whatever it takes…and trust me…it will be enough”.

            So the Italian lied. But let’s give him another shot. We all know that it’s never enough…and the euro zone is after all a black hole.

        • ssincoski says:

          Just more proof that the ‘trickle-down’ effect doesn’t work as advertised. It might work as planned (no trickle-down allowed or expected). Ask the Greeks how much better they have it after all that money-printing.

  3. You say: “China’s total energy production has been rising recently, but only with great effort”

    Is it something you already explained before, may I ask further clarification ?

    • I am looking at the chart if total energy production for China. Up until 2012, it as rising fairly rapidly. Then growth in coal production slowed remarkably in 2013, and began to decline in 2014. Oil production has also begun to decline. China has recently been able to raise coal production (but not to the level of 2013 coal production) by forcing imports down, so coal prices will rise in China. This involves great effort. It is not really sustainable in my opinion. China is facing a peak energy problem, brought on by coal and oil prices that are both too low.

  4. Harry McGibbs says:

    “Investors haven’t been this pessimistic since the global financial crisis of 2008.

    “That’s according to a Bank of America Merrill Lynch survey of money managers with $528 billion between them. Equity allocations saw the second-biggest drop on record, while cash holdings jumped by the most since the 2011 debt-ceiling crisis, the June poll showed.

    “Concerns about the trade war, a recession and “monetary policy impotence” all contributed to the bearish sentiment, Bank of America said.”

    https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/451CF29E-91C7-11E9-A542-311463F57109

  5. Baby Doomer says:

    New study shows how environmental disruptions affected ancient societies

    A new study shows that over the past 10,000 years, humanity has experienced a number of foundational transitions, or ‘bottlenecks.’ During these periods of transition, the advance or decline of societies was related to energy availability in the form of a benign climate and other factors.

    With the human population having exceeded the capacity of Earth’s resources, this analysis suggests that a transition toward sustainability for the current energy-dense, globalized industrial society will be very difficult if not impossible without dramatic changes.

    They found that when energy was abundant, societies expanded and prospered. Conversely, when energy sources declined, there was societal contraction and collapse.

    https://www.sciencedaily.com/releases/2019/06/190618123526.htm

    Here is the study;

  6. Harry McGibbs says:

    “An obscure product made by oil refineries has a grim story to tell investors right now about the fortunes of the global economy.

    “That product is naphtha, something used to make a vast array of goods while also being integral to churning out gasoline. Oil refiners’ margins from making it are the weakest in years in Europe and Asia. Unusually, some petrochemical plants in Asia have even been losing money when processing it.”

    https://www.rigzone.com/news/wire/naphtha_has_bad_news_for_global_economy-18-jun-2019-159097-article/

  7. Harry McGibbs says:

    “Donald Trump has accused the European Central Bank of unfairly manipulating the euro, further raising the stakes for Washington in its trade and diplomatic disputes around the world. The US president suggested in a tweet that comments by Mario Draghi, the head of the ECB, had triggered an immediate slide in the value of the euro versus the dollar, “making it unfairly easier for them to compete against the USA”.”

    https://www.theguardian.com/business/2019/jun/18/donald-trump-attacks-ecb-for-currency-manipulation

  8. Harry McGibbs says:

    “Experts say ensuring antibiotics are only used when absolutely necessary is a vital way to stop the spread of antimicrobial resistance (AMR). A United Nations report published in April warned that unless urgent action is taken AMR will cause 10 million deaths a year by 2050 and damage to the global economy similar to the 2008-09 financial crisis.”

    https://www.telegraph.co.uk/news/0/countries-risking-spread-superbugs-failing-monitor-antibiotic/

    • Harry McGibbs says:

      “Britain will face a cyberattack from a hostile state soon that could bring down the financial system, a Bank of England policymaker has warned. Anil Kashyap, an external member of the financial policy committee, told MPs that it was only “a matter of time before one of these things happens on a big scale”. He said that the Bank was vulnerable despite preparing its defences.”

      https://www.thetimes.co.uk/edition/business/huge-cyberattack-just-a-matter-of-time-rqtz5k9sz

      • HDUK says:

        And this would be just the cover the financial elites will crave as their financial manipulations hit the rocks big time. I wondered why they were poking Iran/Russia with very large sticks. OR may be they will instigate it and blame the former.

      • John Doyle says:

        Antibiotic resistence was on TV last night. Colistin, a last resort antibiotic, was sent to China for swine sickness. Within a year bacteria had developed resistence. This sort of failure is unaffordable. BIg Pharma is not much interested in finding new antibiotics. Reason being that they will be last resort applications and so not profitable to produce.
        This sort of profit distortion should be stomped on.The fed should pay the drug corps to develop the drug as profit is no excuse to not do so. The Fed pays ‘free’ money to settle it.

  9. Harry McGibbs says:

    “China’s total public and private debt has reached new highs compared with the size of its economy, raising fears that Beijing’s stimulus push will expand it even further.”

    https://asia.nikkei.com/Economy/China-s-debt-mountain-scales-new-heights-on-trade-war-stimulus

    • Harry McGibbs says:

      “Facing a record amount of debt that’s about to mature, India’s non-bank financing companies are finding their troubles worsening as a crisis of credibility starts to bite.

      “The shadow lenders, which have been under increased strain after the collapse of IL&FS Group last year, have a record 1.1 trillion rupees ($15.8 billion) of local-currency bonds due next quarter, according to data compiled by Bloomberg.”

      https://www.bloomberg.com/news/articles/2019-06-18/huge-wall-of-maturing-debt-looms-for-india-s-shadow-lenders

      • India should be higher up in our list of countries with debt problems.

        • Harry McGibbs says:

          “China’s central bank has acknowledged its monetary tools are insufficient. The most powerful ones are proving too blunt to drill through a hardening financial system.

          “The country’s money markets have been shuddering since regulators took over Baoshang Bank Co. last month, despite initial assurances from the central bank and other authorities that they would maintain ample liquidity…

          “Funding costs for companies have shot up as large banks flinch from lending to some counterparties in the interbank market. For the first time in more than two decades, lenders face the prospect of defaults and haircuts on loans to other financial institutions…”

          https://www.bloomberg.com/opinion/articles/2019-06-19/china-s-lehman-moment-is-drawing-closer

        • Harry McGibbs says:

          “Car dealerships in Delhi wear a deserted look as there’s no end to India’s auto blues…

          Nitin Kumar, a young automobile salesman in South Delhi’s Lajpat Nagar, isn’t having the best of days at work. “The situation has worsened in the past six months,” Kumar said. “Earlier, 60-70% of customers who made enquiries through phone calls and other channels, used to visit the showroom. This has now gone down to 10-20%.””

          https://qz.com/india/1644063/indias-auto-slowdown-chokes-delhis-maruti-hyundai-dealers/

          • We keep hearing about problems in India. If people there aren’t buying cars, it will not be long before car dealerships have financial problems. Also Indian companies manufacturing vehicles.

  10. SuperTramp says:

    Ha, ha ,ha….what do you MEAN…my Education didn’t guarantee the Good Life? How DARE they!

    College students have “seriously unrealistic expectations” for their starting and mid-career salaries, according to a new report commissioned by Clever Real Estate and conducted by online polling software Pollfish.
    “In particular, we labeled business students as the most ‘delusional majors’ because they overestimate how much they’ll be making out of college by $14,585 and how much they’ll make 10 years into their career by $47,070,” Tommy O’Shaughnessy, head of research at Clever Real Estate Analyst and the author of the report, told Yahoo Finance.
    The report, which asked 1,000 college undergraduates about their salary expectations, stated: “It seems the next generation of college graduates might be in for a rude awakening … the average college student has seriously unrealistic expectations for both their early and mid-career salaries.”
    https://finance.yahoo.com/news/college-graduate-starting-salary-164225919.html?bcmt=1
    The average Gen Z college student pursuing their bachelor’s degree expects $57,964 just one year out of college.
    Too funny, The disconnect between expectation and reality was “definitely due to a lack of information,” O’Shaughnessy explained.
    As Gail as often stated….
    Many borrowers are increasingly missing payments, with delinquencies and defaults rising, causing them to fall behind on major life milestones like buying a house or getting married.

    • Xabier says:

      Incredible as I find it, my little sister is in just this phase: two useless degrees under her belt, and blaming everyone for the lack of decent job prospects – only qualified to work in retail or in a bar. No debt, fortunately, as she received grants in Spain, but unless she now wakes up and trains afresh as a school teacher – and I’m not sure how that might be funded or even if possible – she is rather screwed.

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