Posted on 02/25/2008 11:08:08 AM PST by outfield
BEIJING -- Wal-Mart Stores Inc., a major buyer of Chinese-made shoes, toys and other goods, expects procurement in China to hold steady this year at about $9 billion despite a rising exchange rate and product safety concerns, the retailing giant's vice chairman Michael Duke said Monday.
"I wouldn't see any major variation" in procurement from the 2007 total of $9 billion, Duke told reporters. "China will continue to be a major production portion of direct purchases by Wal-Mart for a long time."
Duke said relations with the communist government are good despite a high-profile campaign to form unions at Wal-Mart stores and complaints by foreign business groups that Beijing is trying to support Chinese companies by hampering foreign investment in some industries.
(Excerpt) Read more at washingtonpost.com ...
But...but...doesn’t China play by “free trade?????”
The Pimp gets the money, the john gets “the goods”............
I recall some statistic that Wal-Mart accounts for about 1% of China’s GDP.
If McCain reduces corporate taxes, you think that will help with trade?
“’I wouldn’t see any major variation’ in procurement from the 2007 total of $9 billion,...”
Wal-Mart bought $9 billion worth of stuff from China in FY 2007 (ending Jan 31, 2008).
In FY 2006 (ending Jan 31, 2007 - I haven’t seen FY 2007 financials), Wal-Mart had a Cost of Revenue of roughly $264 billion. That’s nearly all cost of goods sold.
That means that Wal-Mart purchases from China amount to about 0.4% of total purchases of goods.
I thought everything sold in Wal-Mart was made in China??
Heck, I must have slipped through the net! Because I don’t pay anywhere near that “17% penalty”, and by routing funds through Hong Kong I get that 40% “currency devaluation” back, too...
I do know that if I sell inside of China there’s a 17% tax, but if I export I only pay a 6% tax. And that can be completely avoided - LEGALLY - by running the transaction through HK.
No, China’s not cheating us; we’re doing it to ourselves. We force our players to compete with effectively their legs tied together. We have a massive corporate income tax compared to everyone except Japan (who’s economy is really in the dumper). We have laws about paying tax earned ANYWHERE in the World, where most countries only consider taxing income earned inside their shores. We double-tax profits when distributed, when most countries do not.
The playing field is out of whack because of our insane approach to business, not what others are doing. If you do international business you’d know that 95% of what Duncanites “blame on China” is actually the NORM around the world. It’s the US Government that’s killing its industries, not other countries.
Our country does not have the production capacity to produce all the goods and services that we demand in this country, and it is impossible (that’s right, impossible) for us to do so. We are at full employment right now in economic terms. Where we would get all the people in this country to make all the goods that we would need to replace from China?
People who do not understand this basic fact are ignorant and living in a dream world, where liberals live.
Walmart has done more for our economy and more for our standard of living than any other company in the history of the United States, bar none.
Instead of bashing Walmart and denying reality that we cannot make all the goods we demand, we should be singing Walmart’s praises.
How do you know the companies are communist? you don’t.
You have to be kidding. Google up "China spying USA" and if that satellite shoot down they did wasn't a clue....
Been to China recently? Because it's about as communist as Germany, Italy, or the UK. The "Chicoms" lost - they've seen the results of communism (USSR), and are running full-speed AWAY from that. Rather than just declare "we're done now!" like Russia, and experience the massive failures that happened because of that, they're managing the transition.
China is a LOT more economically open than the US. It's 10X easier to do business there. You get ahead by working for it, and it's pretty simple to keep what you make. Don't want to work? Well, those that DO work don't have to support you - social net is tiny. Taxation is simple, direct, and rare; for example, property is taxed once, at sale. You don't have an annual property tax.
Speech? Free and open; you'll read opinion columns and letters criticizing the government. In fact, many of those same columns are posted here on FR! Being critical of the government does not gain you a bullet in the head - China's opening up.
Religion? I'm a regular attender of the Hengshan Community Church in Shanghai, when I'm in China. Openly evangelical, Biblically sound (I'm a Free Methodist here in the US - a very conservative branch of Methodism), and unflinchingly honest about God, man, and society. And considering the number of open and active Buddhist temples (and mosques, and other churches), religion has a STRONG position inside China.
Politics? The CCP is still the 800 pound gorilla, but other parties exist and are slowly gaining more and more seats and power. Including the Jiu San Party whose main plank is independence for Taiwan!
China's not the communist country you think it is; I see it much more along the lines of Poland, Chech Republic, and other emerging Western states. China's going about their change at a deliberate pace in what they believe is best for China. They know that communism will fail, and that capitalism and democracy are the only solutions. But they'll take their carefully picked path to get there.
Google up “industrial espionage” and you’ll find that France, Germany, Italy, Japan, the USSR and many others are doing the same thing...
And if you don’t think there isn’t industrial espionage committed by US interests, then you really don’t know international business at all!
The communist argument is just a ruse. These same people would be bashing China trade whether China is communist or not. The buy-American crowd is against free trade and when their economic argument falls flat on its face, they trump out the Communist red herring.
Furthermore, the more trade that China has with the West the more likely that it will not be able to continue to be a communist country. Look at all the countries that have had more trade and become more prosperous. The people in those countries have more power with the prosperity (in contrast to peasants) and demand more Western style governments. The best way to end China’s communism is to trade with them for the reason cited above. It is happening right now and will be another example in history.
It’s already happening. Economic success IS breeding political, personal, and religious freedom within China. It is opening up and moving towards a much more democratic society. It’s already heavily capitalistic!
I go to Wal-mart I just don’t purchase their Chinese made crap.
Although its getting harder to tell what’s made where since these manufacturers are able to conceal where there fabricating the products.
China has a comparative advantage (an economic term) for making certain goods, and thus it makes sense to let them make those goods and we make other goods and services where we have a comparative advantage. It does not make sense for us to be making toasters and VCRs, but the buy-American crowd does not understand reality or basic economics.
Exactly... I’d rather make a $15 trillion GDP building and selling airplanes, operating systems, CPUs rather than making a $900 billion GDP making forks, insole liners and plastic cups!
One question: what make and model of vehicle do you drive?
I make a rational economic decision when I buy anything. I look at the quality versus cost and make a decision based on whether I think the item is worth its price and whether the quality is what I need. Some items have too much quality and thus the cost is more than I want to pay. Some items have too low of quality and I do not want them no matter how low the cost. I do not make a decision on where it is made because that is not a rational economic factor in the decision process. I buy some China products, some USA, some Europe, etc., but the country has nothing to do with my buying decision.
I do agree that a lot of stuff that Walmart sells is junk, but they are servicing a certain consumer that needs very low priced goods (lots of poor people), and those poor people are living a higher standard of living than if they could not get those low-priced goods. Walmart has done more for the poor than any company in US history. I actually enjoy seeing poor people buying things at Walmart. I can tell they are thankful that they are able to get those goods at those prices on thier very limited incomes.
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