China tells US to put its house in order

The Financial Times ^ | November 22 2004 | James Kynge

[CDB]

“That is not sustainable,” he added. “The appreciation of the RMB will not solve the problems of unemployment in the US because the cost of labour in China is only three per cent that of US labour. They should give up textiles, shoe-making and even agriculture probably."

[gnarledmaw]

Go back to the old MFN and WTO threads and youll see some Freepers saying the same thing...

[Shermy]

"We'll get right on it."

This Chinese fellow is sooo impatient.

[Conspiracy Guy]

Washy crowsie.

[jriemer]

Exactly my point. We are by far the largest consumers of Chinese goods, we need to hit them where it hurts, their wallet.

Not true. Read on from the Chicom news source itself:

"The trade volume with Japan, China's largest trading partner, hit 60.91 billion US dollars, up 36.1 percent."
Source: China's Foreign Trade Surged 39 Percent in First Half Year 7/11/03 People's Daily On-Line

[tm22721]

They are trying to corner natural resources (following the same track as Japan 1930s) and we will (again) have to deal with that.

We can see this war coming in slow motion but our politicians won't do anything except help their constituents pigout at the Walmart feeding trough.

BUMP

[Bikers4Bush]

And I'm supposed to believe the Chi com news source?

I don't think so.

[kaylar]

Can't blame them for making the suggestion,when a sitting US president suggested the US quit farming and rely for food on Third World farmers instead .

[riri]

We can see this war coming in slow motion

You can bet your butt, a draft will be needed to fight it.

And if we are still fighting politically correct wars when it comes--the outcome is less than certain.

[FrankRepublican]

Tell China we are closing their access to Home Depot, Wal Mart, Target, Walfgreens, Costco, etc.

[snowsislander]

In a mark of China's growing economic confidence, the country's central bank has offered blunt advice to Washington about its ballooning trade deficit and unemployment.

China's arrogance will only grow more insufferable as China grows wealthier.

[BJungNan]

For labor intensive industries, the 3% labor figure is a reason companies locate in China. Automation in the U.S. can overcome some of this difference even for labor intensive industries.

But for most industries, lower labor cost is not the only draw for U.S. companies to set up in China.

1). China is a very big market with an emerging middle class of over 300 million people. They are buying radios, TVs, microwaves, cars, shampoo and all manner of consumer goods in very large numbers.

2). China provides a good jumping off point to other world markets, including other asian countries, the Middle East and Europe.

3). The vast numbers of companies already set up in China provides a very significant market for support and secondary manufacturing industries supplying these manufacturers with items such as corregated, ball bearings, rubber components, accounting services, and more.

4). One of the biggest draws for U.S. manufacturers to set up in China, however, is a desire by U.S. manufacturers to escape a very overbearing regulatory and legal burden associated with doing business in the U.S. In short, the U.S. represents a very hostile business climate whereas the Chinese welcome business.

Just one line item of regulatory compliance on a U.S. based company's balance sheet will exceed the entire G&A expense of a small to medium sized company doing business in China.

Change the business climate for manufacturing in the U.S. and you will see a significant slowing of U.S. manufacturing going to China. And that does not mean lowering the wages of U.S. workers.

[jriemer]

And I'm supposed to believe the Chi com news source?
I don't think so.

Ok, here's two other sources saying the same thing.

"With China-related business booming, the argument that China is a threat to Japan, or Japan's "China Syndrome," is rapidly receding. Exports to China, especially, are surging and soaring demand in China is becoming a driving force behind the recovery of the Japanese economy.

According to Japanese statistics, Japan's trade with China in 2003 totaled $132.4 billion, marking a record high for the fifth consecutive year. Of this amount, exports to China surged 43.6% to $57.2 billion, while imports from China rose 21.9% to $75.2 billion...."

Diagram: "Greater China" has become Japan's largest export market

(Source) Based on customs statistics of Japan's Ministry of Finance

Japan's "China Syndrome" Dissipating as Exports to China Surge (2004.3.1) Research Institute of Economy, Trade and Industry (RIETI) Japan

[Bikers4Bush]

Uhm, that article is talking about the Japanese economy with respect to the Chinese. Not the U.S. with respect to the Chinese.

[Bikers4Bush]

Walmart has sales of $256 billion annually. 80% of their products come from China.

Assuming they have a 100% markup on the chinese goods then walmart alone imports roughly $102 billion in chinese goods annually.

[LowCountryJoe]

...(at great cost)...

You did learn something; I'm so proud of you.

[LowCountryJoe]

Quite possibly because there's an American consumer demand for those items, I'm guessing.

[LowCountryJoe]

No I'm not! I get hit from both sides in the free trade argument here.

I'll attest to this.

BTW, who is the majority and what are they rolling over and taking? No one is making anyone do anything the way I see it, there's no forcing going on...only market forces. Do markets scare you?

[matchwood]

"Walmart has sales of $256 billion annually. 80% of their products come from China. "

12% of China's exports to America wind up on China Inc's, er sorry, I mean WalMart's shelves.

So long as China's masses accept $2 a day in wages and the other 500 million are content with dirt to eat, Mr. Li can continue to dish out advice to America but the day of reckoning is coming.

[LowCountryJoe]

China's currency peg is a declaration of a unilateral trade war.

The falling dollar is by design and to put the heat on China to devalue (un-peg if you will). Believe me, as you wrote earlier, this manipulation has tremendous costs to the Chinese.

[LowCountryJoe]

I don't see why you would not believe anything you read. Tariff advocate?!?! What's so great about tariffs that you've read?