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EU spells out trade threat from China
Telegraph ^

Posted on 11/29/2004 6:56:37 PM PST by Happy2BMe

EU spells out trade threat from China
By Ambrose Evans-Pritchard in Brussels (Filed: 30/11/2004)

China's lightning advance into the production of cars, computers and high-tech industry poses a serious threat to Europe's economic base, according to a report by the European Commission.

Guenther Verheugen, the new enterprise and industry commissioner, said the EU must improve to avoid quick relegation down the world's economic league as Asia storms ahead on every front.

 
Guenther Verheugen
Guenther Verheugen

Once despised as low-cost producer of shoddy textiles and toys, China is now starting to match western technology, but at a far lower cost.

"China's active industrial policy is turning the country into a low-cost competitor in high-skill industries," said the EU's Competitiveness Report 2004.

"The growth of Chinese brand-name producers exploiting these advantages will become a major challenge to established multinationals and brand owners affecting to a large extent well-positioned EU-15 companies," the report said.

One of the most vulnerable targets is the German car industry, which is already in dire straits.

Illustrating the sharp deterioration, the EU's trade surplus with China has gone from surplus in 1995 to a €10,373billion deficit in 2002. China is now Europe's second biggest trade partner after the US.

The deficit is expected to be much higher in 2004 as the euro reaches historic highs against the Chinese yuan. The yuan is pegged artifically to the dollar. The effect is to give Chinese exporters a massive competitive boost against European firms, a situation that is unlikely to be tolerated much longer as economic growth stalls in the Germany and Italy.

The Commission blamed much of Europe's sluggish performance on suffocating red tape. It said the EU could raise overall GDP by 12pc through adopting an American-style "regulatory burden". So far, the East Europeans have also been hit hardest by China, as they tend to compete in the same sectors. The Hungarian electronics industry has lost market share steadily to Asian importers.

The 354-page report, mostly devoted to warning about the growing Asian threat, contends that China has harnessed all its energies on conquering high-tech markets, creating "national champions" - with protected home markets and cheap labour - designed to punch at global level.

"China's industrial policy has selectively attracted foreign direct investment in technology intensive industries in order to benefit from foreign technology and organisational know-how," said the report. Mr Verheugen said Europe needed to respond by spending far more money on research and development.

In a chapter on public sector employees, the report said Britain is acquiring a top-heavy structure with 18.8pc of the workforce now employed by the Government, compared with 11.1pc for Germany and 11pc for Holland. Only part of this is accounted for by the National Health Service.

Britain took 36pc of GDP in tax in 2002, compared with 40pc for Germany and 42pc for Italy.


TOPICS: Front Page News
KEYWORDS: china; economy; europeanunion; globalism; trade; unitednations; world
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To: ken21

They may have been better off when they weren't a real country -- and just a bunch of eccentric princes running around building castles.


21 posted on 11/29/2004 7:30:14 PM PST by durasell (Friends are so alarming, My lover's never charming...)
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To: Haro_546

Yup. The EU is big on market manipulation, not so good at the business of giving consumers what they want.


22 posted on 11/29/2004 7:30:15 PM PST by Brilliant
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To: bahblahbah
1) Get China to unpeg the yuan.

Well, now that they've pegged it to a currency acting like a boat anchor, they have an incentive to float.

23 posted on 11/29/2004 7:30:34 PM PST by Poohbah (Crush your enemies, see them driven before you, and hear the lamentations of their women!)
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To: Poohbah

I agree.


24 posted on 11/29/2004 7:31:02 PM PST by Haro_546 (Christian Zionist)
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To: Happy2BMe
FACT: China will dominate the high-tech industry in less than ten years at the current pace - far surpassing even Japan and the United States.

Bookmarked. When the US Navy's Yangtze Patrol has to smash a few warlord heads in 2014, I'm gonna laugh at you.

25 posted on 11/29/2004 7:31:37 PM PST by Poohbah (Crush your enemies, see them driven before you, and hear the lamentations of their women!)
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To: Brilliant

In some ways Europe still has a fuedal outlook.


26 posted on 11/29/2004 7:33:08 PM PST by wildcatf4f3 (out of the sun)
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To: wildcatf4f3

Europe still has that old Cold War outlook.


27 posted on 11/29/2004 7:33:55 PM PST by durasell (Friends are so alarming, My lover's never charming...)
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To: wildcatf4f3

I personally think there is a 50-50 chance that the EU will collapse within 5 years. It took communism 70 years.


28 posted on 11/29/2004 7:34:31 PM PST by Brilliant
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To: durasell

you may be on to something...pre bismarck.

they got into trouble when they mimiced the european empires of others.


29 posted on 11/29/2004 7:35:30 PM PST by ken21 (against the democrat plantation.)
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To: Poohbah

They will not. The Chinese economy is built on the dollar peg. Since nobody nows what the effect will be if they remove the peg they wont do it.


30 posted on 11/29/2004 7:35:39 PM PST by Haro_546 (Christian Zionist)
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To: Poohbah

When the US Navy's Yangtze Patrol has to smash a few warlord heads in 2014, I'm gonna laugh at you.


Uh, there's a good deal more than a billion of them.


31 posted on 11/29/2004 7:35:59 PM PST by durasell (Friends are so alarming, My lover's never charming...)
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To: ken21

...and Ludwig was a hoot!


32 posted on 11/29/2004 7:36:56 PM PST by durasell (Friends are so alarming, My lover's never charming...)
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To: durasell
Uh, there's a good deal more than a billion of them.

As there were back in the days of the Yangtze Patrol.

33 posted on 11/29/2004 7:38:15 PM PST by Poohbah (Crush your enemies, see them driven before you, and hear the lamentations of their women!)
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To: Brilliant
It wont, I think it will recede into a UN-like institution and its members will seek in alliances with in it.
34 posted on 11/29/2004 7:38:27 PM PST by Haro_546 (Christian Zionist)
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To: durasell

OK -- a few billion heads,,,,I guess


35 posted on 11/29/2004 7:40:11 PM PST by wildcatf4f3 (out of the sun)
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To: Haro_546

Well, I guess that they will try to salvage something from it. But they've already demonstrated that they have no clue about economics. They will very likely abolish large portions of their economic regulations. They can't compete with those shackles.


36 posted on 11/29/2004 7:41:01 PM PST by Brilliant
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To: Happy2BMe; Squantos
>>Illustrating the sharp deterioration, the EU's trade surplus with China has gone from surplus in 1995 to a €10,373billion deficit in 2002. China is now Europe's second biggest trade partner after the US.<<

Gatt, NAFTA and the WTO are the best ideas we've seen from the legislators who truly want to give our economy a serious case of dysentery.

Mr. Greenspan should be well satisfied with his participation in this case of the $$$$$$$hits.

Secretary Annan Kofi has now solid examples of how well the UN's 'sustainable development' programs are working. He doesn't have to worry too much about being called a fool.

I congratulate all of the the undeniably brilliant Senators especially the Foreign Relations Committee Communists.

Everything is going just as planned, isn't it Senators Spector, Lugar, McCain, Daschle and Kennedy? You guys had better authorize a $2000 bill if you don't want to carry a cash bag.

How long are you bastards going to use the Iraqi war as a diversion from the more pressing national interests?

You have reduced America's human dignity to the point where a lady is a trouble maker if she resists being felt up at the airport, where saying the Oath of Allegiance is forbidden in our schools and a prayer that includes the word Christ or God isn't accepted anywhere in the public forum but same sex marriages are promoted.

We are dying what is going to be a long, slow and painful death for the American Patriots.

37 posted on 11/29/2004 7:41:38 PM PST by B4Ranch (((The lack of alcohol in my coffee forces me to see reality!)))
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To: Brilliant
I'm doubt it, the largest party in the EU "Parliament" is the the Socialist party.
38 posted on 11/29/2004 7:43:59 PM PST by Haro_546 (Christian Zionist)
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To: Happy2BMe
Europe should be concerned. Red flags going up all over it seems.

That's pretty much what I was going to say as I was reading the article. They spend all their time running down the USA but they better start straightening out their own countries!

39 posted on 11/29/2004 7:44:08 PM PST by potlatch (Under Construction.......)
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To: A CA Guy

"When you can use slave wages to compete against regular wages, the regular paying jobs lose."

You clearly have never been to Asia. A person can survive just fine on about US $300 per month; this allows them to lease a small flat, feed their family and exist. If one or two other members of the family also are working, they will save money to better their lives. This is the reason that people from Mexico and Central America sneak into the U.S. for the agricultural and manual labor in the U.S. during the Summer; the money they make (small by our standards) will allow their family to survive very well til the following Summer.


40 posted on 11/29/2004 7:58:33 PM PST by Chu Gary (USN Intel guy 1967 - 1970)
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