Beware mighty China

Pittsburgh Tribune-Review ^ | 4/4/04 | Dateline D.C.

[Jean S]

WASHINGTON: Spring is here, the swallows swooping about in the sky and heading back to San Juan, Capistrano just have to be delighted that they fly on wing-power, not gasoline.

It's spring 2004, gas at the pumps costs a national average of nearly $2 a gallon, with some brands in some locations brushing the $3 mark. As we put gas into the insatiable tank, the gurgling sounds are a sign that gas and most of the world's crucial commodities are disappearing down a massive plughole called China.

[wormsy]

I do not get the point of this article. For many years, we have hope that China will shift from the world's factory to the world's market. So we should be happy. If China is importing resources, then it is at least becoming the world's market. I think basic economic analysis is sufficient. First, if those produce were entirely for foreign exports, it would not raise the final product prices and hence either do not affect inflation or is deflationary. Second, as the article rightly point out, the domestic demand in China should create jobs for everyone. We know that the quality of chinese products are still quite low and the chinese consumers is likely to prefer American brands. In conclusion, growth is supposed to be good. Especially since the global economy need growth. Japan has realized that already. It's time the united states realize that.

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[First_Salute]

Nice catch; thanks.

[Jeff Head]

The point of the article is that the Chinese are seeking to control the markets...which means thos emarkets become less and less free.

In addition, our entire economy is prostrating itself to the Chinese who are not morally or ideologically our friend. They have their own long term view of "globilization" and it is spelled hegonomy in Asia and significant control elsewhere. In the end that is not a good thing...and along the way it is bound to lead to significant friction.

We should be treating Red China just like Reagan treated the Soviets. Challenge them to keep up with us if they can, while strictly regulating and controlling the amount of capital and infrastructure we build up there until they show definitive and measurable, quantitative change towards republicanism and freedom.

Withjout our financial bonanza to them, their economy would either have to change towards a more true free market economy...or they would fail and produce the same result, just like the Soviets did.

Otherwise, we risk at some time in the future being subject to The Dragon's Fury.

[Jean S]

Thanks FS. I like your tagline.

[endthematrix]

"The Chinese dragon keeps on swallowing the world's raw materials and sending them back, processed and much less costly than we could ever hope to achieve for our use. But, the consequences are fewer jobs in America and much higher prices for basic necessities. There is a nervousness growing here and around the world at the unimaginable speed at which China has grown and is growing."

China is not only getting raw material but our scrap as well. They are aquiring steel mills and building LPN ports to get energy to them. They are econmically small compared to the US, but WANT to become a player on the world's stage. It is just a matter of when.

[endthematrix]

Steel price increases a looming problem

April 2, 2004

Why is it that a potentially big story that could have a devastating effect on the economy is being mostly overlooked by both political parties -- and the media? Since early January, steel prices have been escalating to record levels.

We are a small family metal-fabricating business, with approximately 25 employees, that buys a fair amount of steel. We are now seeing prices at double in some cases, and we are seeing shortages. Widespread unemployment is just around the corner when present supplies of some steel items are exhausted. I see it happening right now!

This is not something that is going to miraculously disappear overnight. The Evansville area will most certainly be adversely affected.

It appears that China is buying most of the United States' scrap for its own steel needs, and we now have a real shortage that may become a crisis. This is just a part of the overall picture that you would find with a little bit of research.

With limited capacity and plant closures and coke shortages, compounded with other economic conditions, the steel industry is on its way to causing double-digit inflation. Everything made out of metal will have to go up in price.

It's simple. Maybe too simple. China will be dropping even more cheap products over here, and a lot of companies like ours and larger will no longer be.

Keith Smith,
Creative Craftsmen Inc.,
Evansville, Ind.
http://www.suntimes.com/output/letters/cst-edt-vox02a.html

[oceanperch]

Can China help bring down the price of food at the grocery store?
(sarcasm)
And I shop the outer ailes only.

Seems like every item is close to 5 bucks.

and that is not including junk foods

[meenie]

Those that have money can bid up prices. Those that have no money cannot. A wise communist can beat a stupid capitalist any day. While the Chinese violate almost every free trade rule in the WTO book, we allow them to get away with it. Our trade representative has itemized 150 violations but we do nothing about it. Reason. China holds too much of our debt and our economy is dependent on China not selling it.

[Carry_Okie]

China holds too much of our debt and our economy is dependent on China not selling it.

Bingo.

[hershey]

Thank you for expressing my muddled thoughts so well.

[oceanperch]

Thank You for your informative reply.

Could it be that the important issues such as this one are being neatly tucked away and issues not so important are being put on the forefront? Gay Plants (political issues) ect...

Remember when the Panama canal was in the news? Wasn't it China or was it another Asian Communist Country who seemed to be invading and taking control of the canal?

We do not here to many exclusive stories about China much anymore.

I hope our attention is not being diverted while "important" issues slip by.

[Praxeologue]

Markets are self-correcting and efficient if left alone. A large totalitarian state can permanently distort and harm world markets.

A PRC functionary appears quickly on these threads to spout the party line. He uses our free market philosophy against us.

Our answer should be that we can only trade freely with China if they have domestic political freedom. Otherwise we cannot trust them with the delicate flower of economic and trade freedom.

We should impose heavy trade sanctions on the PRC until they release their people from chains. This will help our balance of trade and reduce the outflow of capital to their military and strategic projects.

There is no downside to this approach. We have nothing to lose from being firm with them.

[ken5050]

What are the current odds that the 2008 Olympics actualy ends up taking place in China?

[spetznaz]

Remember when the Panama canal was in the news? Wasn't it China or was it another Asian Communist Country who seemed to be invading and taking control of the canal?

China now controls the Panama canal.

[wormsy]

Taking a historical perspective, the issues you guys are discussing about, the Japs had worried about the same issues for many years. Like us, they were worried about national security, technological competition issues including knowledge transfer as well as market access. They were unconvinced especially since they had thrived on protectionistic trade.


However, in the last year, they are seeing gains. Imports from China have increased for end products, particularly for consumer electronics. Japanese brands were and still are preferred to chinese brands.

Despite the hatred of Chinese to Japs, their comsumption dollars are voting to lift Japan out of the decade long recession.

In fact, the yen is rising. Even the Japs (who don't practise free market rules) believe that China is playing the WTO/Market Economy rules.

Are we over pessimistic?