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Comment by jorgecurio | Hacker News Reader

Well when you compare the average income of an American vs Chinese which haven't reached even Japan's level, I would say Japan would be a better market for SaaS considering they have the money to pay (or should according to income levels).

Also consider the non existant IP laws or any type of bad actor reducing enforcement mechanisms that exist in North America and Europe, means you are in a much more crowded and competitive market.

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The median income in China is between 1/15th and 1/20th that of Japan. I don't think it makes much sense to compare any first world nation to the median income (or average either) in China.

This is an important point. Marginal income increases for the already wealthy does little to support domestic consumption. In economic parlance, the rich have a low marginal propensity to consume. In China's case specifically, the rich are more likely to see any additional income as capital they need to get out of the country (hence China's progressive tightening of capital controls).

On the upside, it means the Chinese government have an obvious demographic to target with a stimulus package: the poor. They have a very high MPC because they need to spend every additional dollar on things like... food.

EDIT: Just to give you a sense of how crafty the rich and corrupt are when it comes to capital flight from China, again from HSBC:

Meanwhile, imports from Hong Kong surged by 88% in February, but we think this was because of base effects again rather than increased over-invoicing activities compared with previous months – the level of imports from Hong Kong is actually down in Jan-Feb compared with in Nov-Dec 2015.

Now read this: http://www.bloomberg.com/news/articles/2016-03-08/phantom-go...

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