Be wary of China

Pittsburgh Tribune-Revuew ^ | 11/23/03 | Dateline D.C.

[Jean S]

WASHINGTON: Too many of us forget that the Chinese have an educational system that rivals that found in many American cities. They are incredibly inventive and work for what we would consider criminally low wages. As for safety standards, environmental conditions and, particularly, pollution controls, these are honored more at international conferences than in any real world efforts.

[taiwansemi]

Wars are fought over competeing economic interests

As far as shipping lanes go, both America's and China's economic interests are the same because American consumers like to buy cheap Chinese goods while China likes to supply them. In both cases, both America and China are interested in keeping the shipping lanes open. In addition, Wal-Mart is now not only #1 in the Fortune 500 but also America's biggest employer. It's in the interest of Wal-Mart's employees that America not block any shipping lanes or else they'll be out of a job.

[taiwansemi]

Warren Buffett recently wrote in Fortune Magazine that America has $500 bil. a year deficits for as far as the eye can see.

[taiwansemi]

Also, America's major corporations increasingly derive more of their profits from abroad than they do from America itself. Intel, McDonald's, Coke, etc. all get more than 50% of their profits from abroad, and China is their fastest-growng market. I doubt any of their CEO's or workers' retirement funds want to nuke China anytime soon. As the world gets more globalized, it also gets more interdependent economically. In addition, China will be the world's largest economy in about 3 decades. By that time, China will have become the #1 market in the world for the Fortune 500 even ahead of America (it is already #1 for everything from light bulbs to cell phones to air conditioners to elevators to beer). If America fought a war with China, it'd just end up destroying its own Fortune 500 and economy. You make not like the Fortune 500, but realize that they do account for 75% of America's stock market value.

[Brian Allen]

<< Warren Buffett recently wrote in Fortune Magazine that America has $500 bil. a year deficits for as far as the eye can see. >>

What, I wonder, did Mr Buffet mean by "America?"

Microsoft and Boeing will not be running a deficit any time soon and, judging by the envy-motivated hatred and rage it stirs around here -- and particularly among the trade Luddites, Wal-Mart will not, too.

Buffet, for all that he is a simply awful bloody liberal, seems buffeted against deficit and as no-one can begin to have any idea how well the United States economy will respond to the tiny Bush tax cuts and to hopefully many many more to come -- no one has any idea what revenues will flow into the feral gummint's squandering trough.

And one thing is absolutely for sure. If the daffysitt begins to get out of hand the counterfeiters at the Fed will simply counterfeit another few hundred thousand tons of "money" to "pay" it down.

The counterfeiting called "Inflation," after all, always has been far and away the most evily-insidious of all of the feral gummint's nefarious forms of taxation/theft.

And always was and always will be the most often employed.

[Caipirabob]

The primary motivation for war is economics. The primary tactic in war is to deprive your enemy of trade and economical growth, inflicting the following hardship upon their people until the country collapses. The Chinese are at war with us, it is being fought so astoundingly successfully that they may never have to fire a single shot.

American manufacturing is almost non-existent these days. Socialist Unions and government over-regulation have worked hand-in-hand to drive our manufacturing capbilities overseas into the hands of the competition. You can hardly find affordable items that are made in the USA and not China on the shelves of any store. The trade inbalance between the USA and China is incredibly stacked against the USA and toe-lickingly favorable to China. Economists in the USA tremble and fret over the slightest twitch that China displays when they become upset with US policy.

I can only repect the brilliance of their leaders and stand baffled at the incompetence of our own. If we continue down this path, as with the teachings of Sun Tzu, by the time the first shot is fired, the Chinese will have already won.

[patriot_wes]

"the Chinese have an educational system that rivals that found in many American cities"

well that ought to slow em down!

Anyway, we have a rule around our house - if it says "Made In China" it goes back on the shelf. We either don't buy or find something from somewhere else.

[Brian Allen]

<< .... "china" will be the world's largest economy in about 3 decades .... >>

What absolute rubbish!

"china" has about as much chance of becoming that as does Holland! Or Macedonia!

"china's" self-annointed and self perpetuating predatory pack of Peking-based invading, conquering, colonizing, enslaving, lying, looting, thieving, mass-murdering mandarin-wannabe wimpish gangster bastards will have to be gotten rid of first.

Then what's left of "china" after that will have to get its brutal gangs of "pla" murderers the Hell out of the more than two and a half million square miles of other peoples' lands, states and sovereign territories it presently occupies. [68% 0f the land it calls "china"]

And then what's left may be about as well off as say New Zealand, is now.

But don't hold your breath waiting for it to pull it off, none of Peking's Maoist monsters is smart enough or will spare the time from raping and looting and pillaging.

Instead Peking's pathetic ponces are still trying to win [Mostly via the medium of their thousands of atrocious movies] what they laughingly called "the opium wars." The wars, that is, in which a few Englishmen in a few wooden ships at the end of a ten-thousand miles long line of supply and communication took on their much-vaunted ancestors, soundly whipped their arses -- and for all time proved the inferiority of their "culture" as compared to that of the West! Or trying to figure out a way to defeat The FRee Republic of China on Taiwan.

They never will!


QUOTE:


Book Review by John Derbyshire

The Washington Times - April 14 2002


Dream On

The China Dream - By Joe Studwell
Atlantic Monthly Press; 360 pp. $27

The dream of Joe Studwell¡¦s title is the dream of ¡§The China market:¡¨ of one point three billion consumers just waiting to be sold clothes, medicine, cars, toothpaste, or whatever else the dreamer has to offer.

As an English writer of the 1840s put it: ¡§If we could only persuade every person in China to lengthen his shirttail by a foot, we could keep the mills of Lancashire working round the clock.¡¨ The dream has been dreamed by many westerners across many centuries. For a very few ¡X the opium merchants of the 19th century, the fast-food franchisers of our own time ¡X it has actually come true. Much, much more often, it has proved to be only a dream, the waking from which has sometimes been abrupt and unpleasant.

In recent years there have been three cycles of dreaming and waking for foreign businessmen eager to tap into the China market. The first cycle began in the early 1980s, after a 50-year period when dreaming about China was out of fashion altogether. With the ascendancy of Deng Xiaoping¡¦s faction following Mao¡¦s death, it became clear that the fantasy economics of the Mao period had definitely been abandoned. So far as industry was concerned, they had mostly been abandoned in favor of the kind of incentivized state socialism attempted in Eastern Europe twenty years before. This was not much noticed, however.

What was noticed was Deng¡¦s maxim ¡§to get rich is glorious,¡¨ and the revitalization of Chinese agriculture that followed the retreat from collective farming, and the surge in disposable incomes among urban Chinese from a Mao-era base very close to zero. Western businessmen, dreaming the dream, poured in to set up ¡§joint ventures¡¨ with Chinese partners. The massacres of June 1989 are a convenient punctuation mark for the end of this first dream cycle. Many businessmen had already woken even before that, though; the book Beijing Jeep, published earlier that same year, told the dismal story of a typical ¡§joint venture¡¨ fiasco.

The atmosphere of widespread state terror that followed the Tiananmen massacres offered a splendid opportunity for the Chinese government to administer some unpleasant medicine to an overheated economy. When this had been done to the leadership¡¦s satisfaction, Deng started the second cycle of dreaming with his famous ¡§southern tour¡¨ of early 1992, in which he urged his countrymen to go for maximum economic growth. Following the massacres it was clear that the Communist Party had no intention of going away; but it seemed, from Deng¡¦s 1992 speeches, that it might be willing to leave the economy alone. This all happened just as the rising fad for ¡§globalization¡¨ was seizing the attention of western business people.

Once again, the dream took flight.

The actual experience of western business in China during the 1990s was closely watched by Joe Studwell, a writer on business and economics ¡X he is founder and editor-in-chief of the excellent China Economic Quarterly ¡X who lived in China for the entire decade. He saw the 1990s flood of dreamers arrive, bright-eyed and eager to engage this new, busy China. He watched the bright eyes glaze over as the reality of China gradually revealed itself to them. Signed agreements and ¡§memoranda of understanding¡¨ turned out to be worthless; court rulings were not enforced; state-owned enterprises were exempt from costly environmental regulations; expensive licenses, processed by lackadaisical bureaucrats, were required at every turn; counterfeiting and abuse of intellectual property rights were rampant; the early-1990s purchasing-power models for the disposable income of the Chinese turned out to be too optimistic; ad hoc technical standards were used to impede trade; local management personnel were scarce, and of poor quality.

As difficulties multiplied, the dream faded.

Then, in December last year, China¡¦s accession to the World Trade Organization became official. As this author points out:

The government committed to the WTO from a position of weakness, not strength, because of quiet desperation, not unified political resolve. It reached for an outside force to do a job it was failing to do itself ¡X the deregulation and de-bureaucratization of China¡¦s economy.

WTO accession arrived just as serious disillusion was setting in among foreign investors in China. There are signs that it has initiated a third cycle of dreaming. Certainly the Chinese government hopes this is so. Knowing that they cannot solve their country¡¦s economic problems without making political reforms they are unwilling to contemplate, China¡¦s communists hope that the standards implicit in WTO membership, and the compulsory procedures for resolving disputes between members, will, all by themselves, force China¡¦s domestic economy to shape up. Joe Studwell shows convincingly why this is unlikely to happen.

The China Dream will inevitably be compared with last fall¡¦s book on the same topic, Gordon Chang¡¦s The Coming Collapse of China. [Which I reviewed in these pages August 12 2001] Studwell¡¦s book is lighter on cultural insights than Chang¡¦s, but better organized and richer in hard economic facts. He notes, and abundantly documents, such large and intractable truths as the following:

For all the talk of reform, of retreat from socialism, of the unleashing of the energies of the Chinese people, and so on, government payrolls increased all through the 1980s and 1990s.

From being debt-free in 1979, China is now saddled with liabilities that will soon make her the world¡¦s most indebted nation.

¡§Given the state¡¦s determination to micromanage economic activity, there [is] almost no strictly legal way for foreign investors to make money.¡¨

Studwell offers two possibilities for China¡¦s near future: a long period of stagnation and low growth like the one Japan has been enduring, or a major fiscal crisis, with runs on the banks followed by Latin-American levels of instability and social disorder. He notes that neither scenario offers a very exact analogy to China: a stagnant debt-crushed economy with a per capita GNP of $25K per annum is not the same thing as one with $1K per annum, and Argentina has never had either Chinese levels of social and political control or modern China¡¦s imperial responsibilities and hegemonic ambitions.

The author¡¦s advice to foreign investors is to use the country as a manufacturing base for exports (if you can squeeze in among all the overseas-Chinese doing exactly that), but to engage in the domestic market only with utmost caution.

It sounds right to me, though given the violence of regime change in China, and the xenophobic outbursts that traditionally accompany such change, I would add one more thing:

Keep a suitcase packed and ready under your bed at all times.

END QUOTE.

[Brian Allen]

<< If Wal-Mart was listed as a nation, it would represent China's FIFTH largest trading partner...FIFTH!!! >>

Wal-Mart is the American Dream writ about as large as it gets! Forty years ago there was no Walmart and now it is the biggest retailer there has ever been on God's green Earth!

Is that why you hate it so?

You aught to keep in mind that of seven dealy sins, only envy has now upside, no attached fun.

And that its inevitable consequences are hatred and rage!

Love Walmart -- just don't buy anything made in "china" from it.

[Steel Wolf]

More Chinese scaremongering.

Look, China has three key elements working against it, that will utterly cripple any efforts for them to seriously challenge us. Here is the Reader's Digest of what the issues are.

Linguistic / Educational

Political Trends

Population

First off, the Chinese language is neither practical to teach nor effective in technical fields. The majority of Chinese are essentially illiterate, many times unable to read basic words that relate to their line of work. Educated Chinese are handicapped in technical fields by a language that hasn't produced a new character since 'dian' (electricity), a character that looks suspiciously like a kite under some stormclouds. Hmm...

Forced to look outside the Middle Kingdom, and learn foriegn tongues to master new skills, they are exposed to dangerous and exotic ideas.

This has led to political trends that steer well away from Mao's hard Communist line. The national desire is for wealth and prosperity, and in their eagerness to adopt modern ways, they are absorbing modern ideas. The ideals that were crushed in Tiananmen in 1989 may have slid under the surface, but they are 100 times more widespread today.

The government knows that its hold on power slips every year, and the ground they lose will never be regained. It's just a matter of time before there is a reckoning that they cannot stop with tanks.

Time, thanks to their vast population, is not on the government's side. China is simply to large to contain. With horrific corruption at every level of government, unyielding pressures from powerful business lobbies, loyalty from the middle class that is entirely conditional on a good economy, and a younger generation that is growing up far more 'Western' than many of their parents realize, China is in for a major breakdown in the next twenty years. The Communists are riding a tiger they cannot control or dismount.

At any rate, the concerns are misguided. While America is like a ship that sails back and forth between fortune and misfortune, China is a runaway train, powered by pressures that have already slipped entirely out of hand. There is no turning back for them. Their power is remarkable, but it cannot be harnessed in the long run. in its written form to be taught

[Steel Wolf]

Their power is remarkable, but it cannot be harnessed in the long run.in its written form to be taught

Don't you hate it when this happens? Remember, kids, proofreading is your friend.

[Elliott Jackalope]

"If you impose tariffs, which are really taxes, then who will pay for these new taxes? Answer: The American middle-class."

At least tariffs would insure that we actually have a middle-class to pay said taxes. At the rate we are going we are losing our middle-class, and we are heading for a two-tier society, where a few people have a lot of money and everyone else is just barely getting by. Not a good idea. Our nation had tariffs for two hundred years, and we did just fine during that time, growing from a 13 colony small country to a 50 state global superpower. That's what tariffs did for us.

"Second, if China is currenty bankrupting and weakening itself with bad loans as you say, why fear it, let alone claim it's "eviscerating" the entire US economy?"

Because what is happening is known as "dumping", and it is the economic equivalent of a trade war. Once they have succeeded in driving our industry out of business they can raise prices to whatever they wish, and we will have no choice but to pay it or do without. Their government has adopted a policy of directly targeting our industrial base, and they are doing a great job of wiping it out.

"Third, China's currency has been pegged to the dollar continuously for the past 10 years. It was only about a year ago that the value of the dollar has started to fall (and the yuan along with it). So you can't claim that China deliberately is undervaluing its currency when, in fact, its value goes up or down the same as the dollar whichever way the dollar moves. For 9 of the past 10 years, the dollar's value rose tremendously and so did China's value right along with it, which actually went against China's interests."

By directly tying their currency to our currency, the Chinese government has adopted a policy of building in an advantage for their manufacturing base. The bottom line is that their entire government and manufacturing base are organized like a finely tuned engine with one goal in mind, that goal being the total dominance of all manufacturing in the world. There is a name for this kind of a government, that name being fascism. Manufacturing is the best way to create wealth, and by allowing China to dominate manufacturing, and allowing our manufacturing base to be obliterated by their unfair trade practices and economic policies, we are setting ourselves up for a big fall.

The day will come when we need the skills of master tool and die makers, and the skills of people who can run production lines and machines to build things like ships and weapons and command, control and communications equipment, and when the call goes out for these men to serve their country we are going to find they have all gone away, the old ones will be too old to work any longer, and there will be no young ones to take their place because they all went into nursing or law or government jobs or "service jobs" because they had no other options. This is sheer insanity, and will result in the eventual ruin of this nation.

What really cracks me up is that once upon a time our currency was backed by gold. Then Nixon took us off of the gold standard, and our currency was backed by the industrial capacity of the nation. You would want dollars because dollars could be used to buy the things we made. Now that we are eviscerating our manufacturing base, why would anyone want to accept dollars? We don't grow enough wheat, corn and soybeans to support a multi-trillion dollar economy. This is sheer madness! Once again, we are doing nothing more than selling them to rope with which to hang us!

[endthematrix]

"Manufacturing is the best way to create wealth..."

It is the ONLY way to create wealth (or by plunder). The Fed wil try to convince you that a printing press creates it or that a currency swap will do it. The strength of a nation is its capacity of production. And in the case with China, it's the ability to dump its own (or US multinationals) products at an astounding low rate.

[Tailgunner Joe]

bttt

[endthematrix]

Sorry so late to reply. I'm new the game here:) I had heard the Wal-Mart statistic and thought that it was amazing. Wal-Mart is a success story! At what cost? Time will tell. Good luck buying anything there not made in China! When registering for my first born at Babies-R-Us, I tried real hard to buy American or even a democracy; closest (geographically) was Chile. Try to impose a Tariff Tax on everyday stuff and Americans would cry quite loudly I assume. Don't believe that because corporate entities reside in the USA they are for the values this forum espouses.

[endthematrix]

"...if it says "Made In China" it goes back on the shelf."

That's great! Much easier said than done!

[Brian Allen]

<< Don't believe that because corporate entities reside in the USA they are for the values this forum espouses. >>

Spot on.

To turn the cliche into Truth: What is good for General Motors long long ago became very bad indeed for the United States.

Corporations are often as not committee-run self-interested gangs pretty much like every other kind of gang -- and Walmart is just about entering that phase but. Bntil it does still represents the living American Dream. Until very recently, Walmart was controlled by its [1962] founders, Sam and Bud Walton.

United Airlines and American are mobbed-up effective extended organized-crime families -- and Southwest and Ryanair and Virgin are run by their founders -- Virgin from a headquarters housing the founder and five other employees!

Too bad we have never tried Capitalism as an economic system in our nation. If we did corporations would come and go like every other life form.

Best ones -- Brian

[Elliott Jackalope]

I would argue that there are two other ways to create wealth, by mining it out of the ground and by growing it (or harvesting what is already grown). The three ways of creating wealth are grow it, mine it or make it out of what has been grown or mined. That's how I understand it. When you dump your manufacturing capability you leave only mining or growing as your ways to create wealth. We cannot support a multi-trillion dollar economy on what we grow and mine in this country.

[Cronos]

Does ANY US company make a profit inChina?? Or even break even? No, because they're relentlessly copied with the got giving the nudge-nudge-wink-wink approach to counterfeiters.

China will become the #1? Huh?? In the 60s and 70s folks thought other communards (the Soviets) would rule (seen Austin Powers?) Communist China has no companies in the Fortune 500 or in Fortune's best managed small companies -- other asian countries DO. Chinese companies are repressed, because if they grow too big they threaten the mother-father party. When we do destroy China our fortune 500 will move to other nations.

[Cronos]

It's in the interest of Wal-Mart's employees that America not block any shipping lanes or else they'll be out of a job.

Workers of the world unite! We have nothing to lose but our crummy, low -wage, dead-end jobs!

[Cronos]

The Chinese won't get control of the Shipping lanes to Africa through the Malaca straits and hte indian ocean. our naval allies in Australia, the phillipines, India, etc. will see to that. WE need to get closer to the Japanese(as is happening now with them helping us in Irq) and get them to curtail the Chicoms.