Posted on 12/25/2010 10:21:26 PM PST by Cardhu
There is a theory in statistics that says different methods used to tabulate and analyze the same set of data will yield different results. This applies perfectly to international trade.
For some time now, the United States has been pressuring China to reduce its "huge trade surplus". But do the methods used to tabulate and analyze data give us the true picture of China-US trade? Let facts speak for themselves.
Rules of origin are widely used today to determine a product's country of origin for purposes of international trade. But the rules of origin method, which originated in the 1940s, has little room for processing trade and transshipments, which are rampant in the international market today.
That is why the analyses of data through rules of origin fail to give the true picture of international trade. And that is why China has a huge trade surplus with the US.
Several experts have said that if China-US trade figures are analyzed using a method other than the rules of origin, China's trade surplus with the US would drop by at least 40 percent.
An article in Paris-based Le Figaro has quoted the World Trade Organization (WTO) as saying that China's trade surplus with the US is over-estimated by about 50 percent. WTO Director-General Pascal Lamy has said that the most important part of international trade is not the imbalance but value addition.
The use of rules of origin to analyze processing trade tends to distort the true picture and produce erroneous results, which has been the case with China's foreign trade. Value addition in China's exports is very low because most of the materials and spare parts used to make them are imported. But the US ignores this and counts the whole product as made in China.
(Excerpt) Read more at chinadaily.com.cn ...
If the trade deficit is a great exaggeration, how come it is so difficult to find something here that ISN’T made by the ChiComs?
The article explains it under the “Rules of Origin” which discounts the parts imported, perhaps from the US in many cases.
We are still buying WAY too much from other nations and financing it with credit. It really doesn’t matter that China imports it first from, say, Vietnam.
Credit for investment is one thing. Credit for consumption is another. It is unsustainable. If the crunchy greens were really interested in “sustainability”, that is where they would concentrate instead of trying to turn America into a nation with no energy or industrial capability of its own.
What about an added value? With all that 65 cents on importing materials you still get your extra 35 cents and also a dollar to feed transportation and management guys.
That makes Chinese surplus and article is misleading pushing the Chinese political agenda which is about to change the rules to keep more money there. They want to increase costs. Not an impossible task considering the West surrendered it’s industrial capability to a ‘cheap’ labor. It won’t stay cheap this way.
Which, by my calculation means there should be a duty and or tariff on good 'ole Barbie. I would say a 10% on the $8.00 retail cost would be reasonable. I would also lower the corporate income tax rate for all to almost zero. That would motivate local production.
On the other side of the ledger, when a factory is moved to China, we report this as a US export to China.
There you go raising taxes again on the poor American consumer - are you some sort of Communist? :)
Are you advocating tariffs instead of corporate income taxes? The Chinese would likely retaliate in some manner to offset any perceived advantage created by the tariff.
Well you would hardly export a building and old outdated equipment - you build in China and get the new equipment from Germany imported into China.
Shareholders are the beneficiaries.
I would like to think this is true, but so much of what’s on the shelves says “Made in China.”
But rules of origin make it seem that China gets $2 each for Barbie dolls
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This is stupid logic. Ya think the americans selling the dam dolls get to keep the $9.99 each? No of course not. There’s distributing, marketing, and royalties to be paid.
Yes, that is the point isn't it? We win because of the huge difference. We have to stop the bleeding. The corps would pay less in taxes and Barbie would actually cost less. Even more so if produced locally.
If the ChiComs want a war we have 11 of these to their zero
I agree with you - your whole post makes no sense.
You will trigger a trade war, not a shooting war. Everyone will lose in a trade war. A trade war would bring much more power to labor cartels, trial lawyers, environmentalists, and the rat party. Instead of a trade war, I propose that we become more competitive eliminating excess regulations, taxes, and litigation. The rats are taking us the opposite direction. A trade war will make us less competitive. There is no escape from global competition.
Eleven sitting ducks. They have a bigger aircraft carrier on station - it is called China.
Typical limp wrist-ed response. A trade war is a war. If we don't stand up now we will never be able to so in the future. Thank God people like you WERE NOT AROUND in 1776.
You know, Karl Marx was a Free Trader too.
The problem with tariffs is they take political guts and resolve. Letting them(ChiComs) eat our lunch requires no balls at all. It is a very passive and gutless way to sell out the future of out country. Look, you Free Traders are getting your way, I am just pointing out it doesn't have to go like this. The brainwashing at all of the MBA mills is complete, Stalin would be proud of the lack of free thought.
I am just one small voice pointing to the emperors lack of clothes, having fun while Rome burns.
Shoah, Mistah Jie. I believing you vewy much. ;-)
Silly MBA propaganda. It just shifts the winners back to our shores.
Shareholders are the beneficiaries.
I guess since you are posting from Spain, you'd hardly notice the 23% real unemployment here in the USA. But from what I hear, the economies of Spain, Portugal, Ireland, Greece, Italy, etc., are suffering from the same Free Traitor, myopic, tunnel vision, stupidity as ours is.
Shareholders also benefitted when nations had sustainable, fully functioning economies. Those economies also had a balance of production, consumption, distribution, exports, and imports, such that that vast majorities of those economies were gainfully employed within their economies.
Globalism is simply communist redistribution of wealth to the few privileged, and redistribution of poverty to the masses.
Otherwise, our economy and those of all the above mentioned nations would be booming. That is not the case.
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