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 ...
Ok, so let's see, the Chinese spend say 30 cents on labor to make the doll that sells for 10 bucks. Lets say if you make the doll in Peoria, Ill. it costs a dollar per doll in labor. The shipping costs will by slightly lower but I will ignore that. So the Peoria doll costs a net 65 cents more. So if the USA charged a duty of on the imported doll at 10% and lowered the income tax rate accordingly, I'd say Barbie made in the USA would actually cost the same our cheaper.
All of this Free Trade is so Corps can save a few penny's on the dollar. It is totally ridiculous if you run the numbers.
Aw, c’mon, dude. Don’t you know that there are hundreds of little Willie Green-style economic illiterates here who think tariffs and idiotic trade wars are the only way to go?
As for the article, it’s largely meaningless. Our trade deficit with China is what it is and there is a capital flow surplus of precisely equal size. It’s about as significant as Georgia’s perpetual trade deficit with Florida in oranges.
Even if we were to account for trade based on the value-add, that would just redistribute chunks of our deficit to other countries. Which might be slightly useful as it would deemphasize our Chinese deficit (and maybe the rabid slaverings and gibberish of the protectionists,) but wouldn’t change reality at all. Not to mention that it would be offset to no small extent by a lower U.S. export number to China (and elsewhere) because not all of our export content is domestic value-add.
Our real problem is the ongoing desecration by the Narcissist-in-Chief and the rest of the socialists of the U.S. as a preferred investment destination. Without that, there won’t be any trade deficit for the protectionists to worry about.
What style of economic illiterate are you?
This is how evil auditors think:
REVENUE: Gross Sales Price in US: $9.99
LESS: Cost of Chinese Manufacture:
Materials .65
Freight Out & Management 1.00
Labour & subcontractor profit .35
TOTAL (2.00)
NET REVENUE to US company $7.99
In addition to the $2.00 paid to the Chinese company, the US company would incur costs in distribution, marketing, management, design, etc., in the US, but the numbers and information via China still seem out of line, especially the part regarding materials.
Isn't plastic manufactured from oil? When did the US start exporting oil? Isn't the US textile manufacturing industry pretty much non-existent?
Sorry, Obama & Communist friends. The numbers are so out of whack to be along the lines of the most unbelievable propaganda. (Some of us actually learned statistics and math in school.)
I have yet to see that. I have seen them even buy all new equipment prior to a transfer. For two reasons, easier to train and not worry about equipment breaking down and second is the Chinese let you get a good break on bringing in the equipment.
One note,Barbie dolls have to change every 6 months to keep sales up. Because of China long lead times and the short period of time the can be sold at the max price, they are missing a very large cost component in this example. This cost is more than eqaul to the example cost.
Chicom troll
The concept of outsourcing by US based multinationals as a form of communism is a truly head-spinning example of "words mean exactly what I say they do".
UNTRUE! The countries dependant on exports lose. This would be China. We run huge trade deficits so we would win
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.
Sure. Get rid of all that over regulation and the American worker will still not be competitive with a Chinese wage slave. And you know this. Tariffs will make it more equal.
You hate tariffs and call it a tax?
All that means is you will pay more and more taxes to support a growing army of the unemployed
A trade war will make us less competitive. There is no escape from global competition.
Untrue! You think China allows an American to build a factory in China? Only if he takes on a 50% Chinese partner even then the American technology will be stolen and the Chinese will build their own factory making that item
Many countries keep out select foreign goods with tariffs or absurd rules and inspections. Doesn't hurt them any
Thats an apples and oranges argument.
Trade balances have nothing to do with profits/losses. China gets $2 / doll - the US pays it causing a $2 surplus for China and a 2$ deficit for the US. Adding up all the imports / exports from both countries to each other results in the Trade Balance between them.
That China spends say $1.99 to manufacture the doll is THIER problem - they are the ones selling it for only $2 because the are happy with the profits!
Furthermore, if you really want to get into the entire expenses aspect - then you also have to look at what the Chnese do NOT spend while manufacting that the US does (Environment, wages, work conditions, etc ...)
The concept of outsourcing by US based multinationals as a form of communism is a truly head-spinning example of "words mean exactly what I say they do".
Since you can't clearly articulate what you wish to say, I'll just have to assume you disagreed with the part of my post you quoted, and then just randomly plucked a phrase from your vast Disney® vocabulary with which to retort.
When US taxpayers are forced to subsidize, in several different ways, the offshoring of "US based multinationals" then yes, that offshoring activity is a form of communism.
What we know is that Obama says 'spread the wealth around' and wants import tax hikes to pay his union thugs. We should know Ronald Reagan said "Protectionism becomes destructionism; it costs jobs" (from here). What we don't know is why union tax'n'spenders' show up with name-calling rants on treads like these.
Sounds like the Liberal Free Trade Globalists and the supporters of Free Trade with Communist China are trying to spin the figures that they used to claim “does not matter” (trade deficit with Communist China). Americans have figured out that the Free Trade Communists are full of BS
These are the facts:
There is an outrageously high trade deficit the USA has with Communist China
The trade deficit with Communist China hurts the American economy
You cannot create a job in the United States of America when you ship the American job to Communist China
You support Free Trade with Communist China...you are a Communist
You will trigger a trade war, not a shooting war. Everyone will lose in a trade war
You either fight, or become subjugated. The US needs to retaliate
Untrue! You think China allows an American to build a factory in China? Only if he takes on a 50% Chinese partner even then the American technology will be stolen and the Chinese will build their own factory making that item
Many countries keep out select foreign goods with tariffs or absurd rules and inspections. Doesn’t hurt them any
Excellent points. The ChiComs are not going allow an American company to have sole ownership of a factory in Communist China....and US and Western technology has been stolen en masse by the ChiComs
INVOICE
Capital, Goods and Services stolen and extorted by the Peoples Republic of China
FDI, Intellectual Property, technology, know how . . . . . . . . . . . . . . .$ 2,500,000,000,000.00
Payments received from the Peoples Republic of China . . . . . . . . . . .$ 1,000,000,000,000.00
Amount due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 1,500,000,000,000.00
Your Treasury certificates are your payment receipts. Thank you.
I hate to cite wiki graffiti but this comports well with what I believe to be true. Here. "The Soviet NEP (1921–29) was essentially a period of 'market socialism' similar to the Dengist reforms in Communist China after 1978 in that both foresaw a role for private entrepreneurs and limited markets based on trade and pricing rather than fully centralized planning. . . [Like Lenin, Deng knew that socialism could not build wealth, capitalism was needed. In the early 1980s] Deng Xiaoping and Armand Hammer, a U.S. industrialist and prominent investor in Lenin's Soviet Union, [repeatedly met and] Deng pressed Hammer for as much information on the NEP as possible."
IMO, the western corporations' days in Red China are numbered.. no way will the Chi-coms permit the useful idiots (Lenin's term for them) to profit from Red China's efforts to build a domestic market. But unlike the clumsy Soviet ideologues the Chi-coms will keep aspects of capitalism.
And no way BTW will the American taxpayers permit Washington to compensate U.S. corporations for their losses in Red China.
Don't forget "Karl Marx was a 'free trader.'" Six words that establish a person doesn't understand both sides of the equation, Marxism and capitalism.
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