Posted on 07/27/2002 11:17:00 AM PDT by maui_hawaii
Trade. That’s it. Trade. That’s the recipe. How can we trade though? Everyone else’s economy slumped along with ours?
The answer lies in our Asia policy. In specific, China, or rather, getting out of China.
During our current economic slump China boldly proclaims ‘our economy is still chugging along’, their export economy that is. That is the #1 driver.
China’s rise comes at the expense of the rest of Asia. China over the past decade has constantly taken market share from its Asian competition. The primary way they have done this is through the “cheaper, cheaper” method. It led to a severe hollowing out of the Asian competition.
But I ask you this: what does their current economic boom have to do with us? A lot, or very little, depending on how you look at it. A lot in that we are their primary market for many of their goods, very little in that we don’t sell crap to China.
Investing in China ‘because its cheaper’ is leading to a mass leakage in the world economy. China gets all the money, but we get none of the benefit from their rise. Remember that 80 billion-dollar deficit? And that is only ONE year. Compound that over a few years, and that ain’t no chump change. Recently the USCC said that only 20% of exports to China go to China. The rest are export bound. That makes China only a net consumer of $3.2 billion a year of US goods.
Here is the formula. Despite the fact that “China is cheaper” so what. Price is not everything. That ‘cost cutting’ procedure is BS. Too many corporations are opting to cut costs instead of add names to the roles of purchasers. It’s a weak man’s out. All that money poured into China is opportunity lost… Only because our stupid political corporations prefer $1 an hour labor...they don't want to pay anyone, but they want everyone to buy their stuff.
Put all $100 billion a year, or as much as possible worth of purchases back into ASEAN and Japan.
Would $100 billion per year perk up the Asian economies? You bet. And on top of that, we would have a grand opportunity to export to, and sell in their boom. It would be the gleaming area of the world economy. Asia would lead us out of the downturn. It would be contagious.
Asia represents 34% of our world exports. China represents .7% (yes point seven percent). Asia (including ASEAN) represents 47% of our total imports (including China). China by itself represents over 8% and growing.
In other words, there is a 39% to 34% trade ratio with Asia (not including China). What that means is, if we import an extra $100 billion from Asia (excluding China) then we will have an extra never seen before $87 billion dollar export opportunity.
Last I checked so-called Communist China had a fiscal burden of government 2X lower than the United States.
The average man in the street is a hardworking, hardcore capitalist who would make the average Republican look like a Socialist.
Once they get rid of their government, stand back. I seriously doubt that a Socialist Democracy is going to be able to compete with what's coming in China.
I expect a massive deflationary shock to our semi-skilled labor markets. High tech should be safe for a generation or so.
Uh, I just got back. Spent much time there yourself?
You may be too optimistic. Have you compared the level of effort put forth by their graduate students versus our own?
Level 3 translator.
Studied going on a decade.
You?
The nature of the regime, and "China" as a whole whatever "China" means is something else.
The CCP is the economy. They have their fingers in every aspect of the economy. Those corporations that are deemed 'private' are not really private.
The CCP actually has a savings plan going on, or so it seems. I call it more like the golden parachute for CCP elites.
The current system in China is my main complaint. No need fighting on the other details.
You may be too optimistic. Have you compared the level of effort put forth by their graduate students versus our own?
Well, I attended grad. school with some Chinese and they were pretty serious. Some of them had more extensive English vocabularys than I did. Do you know what esemplasticity means? They did. But it was all memorization, very little practical knowledge. Believe it or not, street smarts are very important in research and the lab. . Its the folks who can weld AND solve higher order differential equations who make our technology the best..
I expect after the 1st and 2nd generation of wealth accumulates they will slow down a bit?
Keep in mind, they still can't make a car that gets more than 20,000 miles. It takes a good deal of brains and experience to do that.
OTOH, you can pull over in an alley, and some enterprising young fellow will tear down the engine on the sidewalk and have it running by sunset. Dirt cheap, no taxes, licenses, etc, naturally.
Hell, I've seen the Chinese forcibly remove tax collectors from their markets. Communist, my foot. Can you imagine a modern American castrati, conditioned in government schools, ever laying hands on an IRS lord? I can't.
When they ditch the government, the gloves are off. They ain't going have no stinking Social Security or capital gains or Enviro-nazis, etc. I imagine the 2 tier wage system in this country will become even more pronounced.
Now we are talking the same language.
In many ways the CCP is fighting their own people. And I don't like it.
"China" meaning 'all of China' as a whole cannot be viewed as such a big monolith. Development, no matter what, will be done in regions, or pockets, as it is now. If Shanghai, or Guangdong, were to keep the money they actually generate, then those two places would be something else...
Smaller pockets of regional economies is one thing... 'all of China' is something else entirely...
The CCP doesn't tax the company, they own the company. Why tax yourself?
It will be a land of capitalism without the burden of Democracy.
Revealed yourself there...
I agree (though there is many a slip between the cup and the lip).
Easier said than done.
In the interim you should probably stop spewing inanities that only prop up the regime.
This is friendly FYI, because you are new. You sound like a ChiCom propagandist a bit. You make the same invalid arguments they make.
Always when anyone criticizes the ChiCom regime they say, "what do you know about China?" -- which is exactly what you said.
Always they try to present China as more capitalist and freer than the US. That was also your first line of argument.
Weikel, a fellow who always presents the same ChiCom talking points, chimes in.
Generally two types present these taling points. Those who are pro ChiCom (there are always a number here and at any and every public site). And those who are not necessarily but actually don't know that much about it, but are friendly with some Chinese people, have had some interaction and have become familiar with the talking points and believe them out of naivete.
I read that in order for a company to manufacture a product in China, the Chinese government requires that the R&D be done in China also. So High Tech jobs are moving over there big time. Why do you think so many Americans high tech workers are getting laid off? Corporations are shutting down American development centers and opening up development centers in China.
Not as much experience as you. Entered via Mongolian border, roamed around for a month or so.(Noticed the border was porous, pointed it out to some of the more radical folks I met). I play the Chinese markets a bit. Number of Chinese friends in grad/undergrad.
The CCP is the economy. They have their fingers in every aspect of the economy. Those corporations that are deemed 'private' are not really private.
I know. I was under the impression that the 1/3 that is "private" produces 70% of the GDP?
The CCP actually has a savings plan going on, or so it seems. I call it more like the golden parachute for CCP elites.
Expected as much. They seemed to have some foreknowledge when the B shares became available.
The current system in China is my main complaint. No need fighting on the other details.
I agree. The CCP must go. It would be nice if they could leave peacefully, you should always give even an evil person a non-violent out. Its not worth the blood of the good folks. If they won't go peacefully, I say smoke em. I had a number of 2nd Amendment conversations while in China. Some of them *really* thought it was good idea. I imagine we will see how firm the CCP's grip is during the next economic crisis.
What's your take on them?
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