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To: DiViT who wrote (39174)	3/8/1999 5:37:00 PM
From: John Rieman	Respond to of 50808

Chinese consumers aren't spending, due to job uncertainty.......... scmp.com Published on: Monday March 8 1999 Uncertainty puts a brake on spending AGENCE FRANCE-PRESSE The growing army of consumers, plagued by uncertainty over work and pensions, are spending less despite government hopes for a boom this year. "I haven't bought any new clothes for the past year," said 43-year-old Beijing factory worker Mr Qin, typical of many mainlanders entering an uncharted economic world. Reforms initiated last year by Premier Zhu have ended the "iron rice bowl" system of cradle-to-grave social welfare for workers under which jobs and housing were guaranteed. The reforms have also led to millions of lay-offs as state-owned enterprises are thrown to the wall or forced to compete with the growing private sector. Mr Qin fears he could be laid off as his plastic-ware factory now prefers younger and better-trained workers. Mr Qin's concerns are common among Beijing residents who suddenly find themselves having to cope with what they term the "three mountains" - reforms in housing, education and medical care. In fashionable Wangfujing district, shops offering rock-bottom prices are failing to attract buyers. "They come in to browse and not to buy," said a salesman. Taxi drivers in the capital are also suffering, with their plight compounded by a cut in fares from 1.60 yuan (HK$1.48) to 1.20 yuan per kilometre. "Fares have been cut but there are fewer passengers," said Tang Guorong, who will need three more years to pay for loans on a car that cost him 200,000 yuan. Three interest-rate cuts made last year to stimulate domestic demand have had the opposite effect of attracting more savings, according to analysts. Economist Li Yining attributes the phenomenon to "uncertainty in expected incomes".