China On Notice

Forbes ^ | 17MAY05 | Paul Maidment

[familyop]

“Our undergraduate enrollments have grown in the past two years due to the success of the Georgia Tech Regional Engineering Program at the GT-Savannah campus and due to the recruiting efforts of the Women-in-Engineering program here in Atlanta,” Davidson said.

Hey, not to mention the Chinese nationals, Indian nationals, Arab nationals and others who comprise the majority on most such program rosters, due, in part, to unwritten but well known university social policies against our men.

...tell you what. In about six years, the first of many young US men will be ready to test out of most major undergrad classes (I know, that isn't allowed with major classes due to the racket) in defense-related hard sciences (math, software, physics,...). The first of a few women who are aiming at the same will be there, too, with lots of generalized animosity against feminism.

And US contractors will use 'em or lose 'em (by full immigration, if necessary) to more socially conservative clients elsewhere. Information is cheap now, and most US corporates are more loyal to current social anarchy than they are to our country.

[RockyMtnMan]

Have you ever asked yourself what their motivation might be to seemingly lose money with this strategy?

Economic warfare is a very real possibility given the illogical nature of those statistics. We are financing their growth much like most people have a mortgage. When they decide to default on the loans who is going to repossess the assets? Given that the assets are "owned" by US corporations that built them I would say the Chinese government will be the repo man who paid for it all with nothing more than toilet paper.

What is the impact on the investor who unwittingly financed this wonderful new world and is now looking at a completely worthless investment? When the ball drops on the US economy doesn't that mean the Yuan will gain in value against the dollar given the precarious nature of our borrowing habits?

The Chinese are laughing all the way to the bank and the suckers (free trade crowd) are wondering why.

[ARCADIA]

Floating Chinese currency might be a DISASTER for both sides! China does not have a good banking system.

I am not sure that our banking system is any better. I recall that Greenspan nearly lost his lunch when he got wind of the amount of derivative liabilities our financial institutions were carrying.

Tariffs and trade quotas are a better way to adjust the imbalance. But, if we do not have the political maturity to address the issue rationally; then you break the currency peg, smash the system, and start anew. The one thing we know for sure is that the present arraignment can not last. We cannot continue a massive current account deficit indefinitely.

[NewLand]

Chinese nationals, Indian nationals, Arab nationals and others who comprise the majority on most such program rosters

Source?

most US corporates are more loyal to current social anarchy than they are to our country

Define with examples that demonstrates "most", please.

[NewLand]

Have you ever asked yourself what their motivation might be to seemingly lose money with this strategy?

Yes.

Economic warfare is a very real possibility given the illogical nature of those statistics.

I never deny that, in fact, this type of warfare has gone on between nation states for thousands of years.

My points are simple:

*The use of artificial economics will always collapse over time.
*China cannot continue this approach without eventually paying the price. They will.
*Our economy is too wide and too deep to be impacted in the way a few here are suggesting.
*We need to continue to lead through innovation and our unique capitalist culture.
*We should continue to pressure the Chicom govt into collapse and cultivate China as our ally.

Although I understand the concern about the current 'unfairness' of the competition, most of the arguements presented here are emotional and without substance or data to back them up.

We have plenty of issues here at home we can fix that will have much more impact on our competitiveness now and in the future.

[Brilliant]

I was replying to a post that was talking about how the Chinese have been doing this for thousands of years and know more about it than us. I was pointing out that they had us beat 4,000 years ago, but in the last several years, we've been on top. They are still haunted by the ghost of Mao. They are becoming more like us, but they are still far behind.

[junta]

You forgot think tank whores and MSM idiots.

[Brilliant]

That's a different animal, doesn't have anything to do with jobs here or our standard of living, though. It's just a question of whether Kodak's making a good investment decision. Maybe it is, maybe it isn't. Kodak investors (like me) are taking a risk.

On the other hand, I don't know that Kodak's investment in China is so significant that you need to lose sleep over it. Kodak is making money today, largely because of that investment. It could not make money competing against the Japanese with American labor, but using Chinese labor has turned things around. That leaves its American based workforce in the business of making executive decisions, and providing technological expertise, but that's where the money is. You can't make a living compatible with American standards by making cameras as a factory worker.

However, the Chinese can make a living compatible with Chinese standards by making cameras. So let them make the cameras, and let us make the decisions.

[ninenot]

In response to your first comment, the devaluation of labor in Country One automatically devalues labor in Country Two, the importer.

THAT'S how harm is done to Country Two, as DOL stats will demonstrate.

[superiorslots]

Quote: So they'd be giving their stuff to us for free.
Why is that bad?


Apparantly your job is not at risk to be sent to china?

[BeHoldAPaleHorse]

There's more to an economy than capital investments.

There's consumables. China has to import a fair amount of those.

If they default on their loans, then their ability to pay for those consumables comes into question. Nobody is going to release oil and other consumable items for delivery to the Chinese until they have money in hand.

Finally, there is this thing called "the United States Navy."

We may decide to exact payment by seizing oil tankers and other ships headed for China. After all, the oil has been paid for, cash on the barrel, because nobody in their right mind will extend credit to a known deadbeat.

[superiorslots]

Quote: Didn't we hear the exact same thing about Japan in the 1980's? Please...


1.)We did not uproot entire industries and send them to Japan.

2.)Also for the most part Japan beat us on quality not price. Their wages were comparable to ours. We are being beaten by china with 80 cent per hour wages.

[Brilliant]

Not if they give me free TVs, free cameras, and free clothes.

If I can live off their efforts for free, why do I need a job?

[superiorslots]

Quote: Just because we lose some of the lower value manufacturing industries

I am a realist. A society needs fairly decent jobs for people with lower HS education and or lack of ambition. Not everyone is a Bill Gates in intellect or ambition.

By making these people take McJobs you are creating a permanent underclass that will be a burden on socity through crime and welfare.

[Mulder]

that's what the US economy is becoming - services and government.

Don't forget the "financial economy". An ever-increasing portion of the economy consists of nothing more than people trading paper (such as mortgages) all day long.

Jim Puplava made this point on his show over at financialsense.com. If you get a chance, I think you might enjoy listening to his commentary over there.

[Prince Charles]

We Americans have been subsidizing the Chicoms for way too long. If they want to act like a world player, then let them float their currency, otherwise they can take a flying leap...

[taxed2death]

re: post #20 and #30.

great answers...thanks for making a complicated situation easier to understand.

[WilliamofCarmichael]

RE: extreme analysis and China as a giant North Korea

During the Cold War the progressives and the internationalist Rockefeller Republican "free traders" argued strongly for trade with the Soviet Union. We must trade and help the "moderates" lest we play into the hands of the "hard liners" and we cause a war, they warned.

Better minds prevailed perhaps because those very same minds had experience defeating enemies. Not so today and thus we should be reminded that, extremism in the defense of liberty is no vice.

China, a people with no history of a social contract and respect for the individual, is going to become a western-style, free market democracy? All we have to do is more "free trade" transfer of technology, wealth, and jobs? Sure.

I think that this article

http://www.bolshevik.org/1917/no26/no26china.html

published by the International Bolshevik Tendency (IBT) describes what is more likely to happen. I hope so.

To wit, a second communist revolution ending Deng's version of Lenin's New Economic Plan (NEP). The reference to NEP is mine.

End the corruption of "socialism with Chinese characteristics" the revolutionary way, exterminate the new "landlords" and the traitors to the Revolution.

Then seize what the western "useful idiots" have provided and continue the march to international socialism.

Let them defeat themselves fighting for two versions of socialism. We have no will to do it, we rush to sell them rope.

The IBT is a revolutionary socialist organization founded by former cadres of the international Spartacist tendency (today the International Communist League).

[A. Pole]

But, if we do not have the political maturity to address the issue rationally; then you break the currency peg, smash the system, and start anew.

As the history teaches, smashing things ends in, well, in more smashing.

If it were up to me I would impose at first small NON punitive tariff like 5 to 10% on goods and services. I would use money from it to help American producers and workers and see how the trade deficit shrinks (probably the budget deficit would ease).

I would tell to China - we are still your friends and you keep the currency peg the way you wish.

Then after seeing the results later I would increase the tariff again (maybe in few steps) to balance the trade deficit and reduce outsourcing.

This would be good for China and America and EVERYONE else. Trade would IMPROVE! It is WTO and international bureaucracies which are not good for anybody.

[NewLand]

1.)We did not uproot entire industries and send them to Japan.

Electronics? Transistors? Radios? TV's? Cameras? These were equally as uprooted and "sent" to Japan as any industry is being 'uprooted' today. Much of that was actually in the 70's as well as the 80's.

2.)Also for the most part Japan beat us on quality not price. Their wages were comparable to ours. We are being beaten by china with 80 cent per hour wages.

Japan was a low cost producer in the 50's-60's-70's...only when they became successful in the higher value industries AND improved their quality levels did they become an economic power.

Then what happened? Because industry became wealthy, the cost of living standards rose in Japan, wages were increased significantly, starting in the late 70's through the 90's, and Japan had to 'outsource' manufacturing to Korea, Malaysia, and China to stay competitive.

These are economic cycles that will not be broken by China, especially as they continue to subsidize any of the three (3) 'legs of the stool'...currency; industry; citizenry. Today, they primarily subsidize their currency with a low peg. Once that begins to loosen, the other legs will have to share the burden, and they will see a similar cycle as Japan went through, only to a larger extent.