(China) Trade surplus with US exaggerated

China Daily ^ | December 25th 2010 | Li Jie

[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.

[1rudeboy]

What we don't know is why union tax'n'spenders' show up with name-calling rants on treads like these.

Over the past week, I've collected a number of reasons:

1. You don't have to pay the tariff if you don't want to, and
2. if you have to pay, it's not too much.

These people make fine Democrats. Sure, they yammer about income taxes (presumably personal and not corporate), but you never see it . . . it's always, "let's raise these taxes now, and the others will be removed later."

[central_va]

I've noticed the Free Trade Marx Brothers have tip toed around my post 21.

[UCFRoadWarrior]

Trade war? What’s to prevent Red China from ending Deng’s economic reforms vis-a-vis Western corporations the same way the Soviets ended their NEP in the 1920s? Seize the property of the Western “useful idiots” and kick ‘em out. Socialism with Chinese Characteristics, Deng’s version of Lenin’s New Economic Policy (NEP) will not IMO permit foreigners to share the domestic market.

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.

---

Excellent post. And, yes, Lenin’s NEP and the Communist Chinese current system are all just market-socialism....and at any time the ChiComs can pull the plug on the Western companies that invest in Communist China.

Few learn about the Soviet NEP of the 20’s, and how the ChiComs have basically used it as a blueprint for their current system. Our government funded schools...and tenured economics and business professors at government-funded schools continue to push the “Free Trade with Communist China is good” mantra,,,,totally ignoring the fac that Lenin had created the same type of programs 50 years earlier

[1rudeboy]

We went through this last week, and you kept moving the goalposts. Marx would’ve been proud of you. Do you agree with him very often?

[1rudeboy]

One of these days, if you come across someone who confuses “trade” and “free trade,” please let me know. You spend a lot of time railing about them, but I never see who they are.

[InternetTuffGuy]

At some point, you reach a critical mass of out of work Americans who become angry and tired of being called "commies" for protesting against the offshoring of American industry. When that critical mass is reached, the pissed off rabble will simply kill you.

And I won't intercede to save you when they do, Cardhu. I don't like you either. You're kind of a douche.

[central_va]

the Free Trade system hastens the Social Revolution. In this revolutionary sense alone, gentlemen, I am in favor of Free Trade.

             -- Karl Marx

If you don't agree with Karl, tell us where you disagree and how free trade doesn't "hasten the Social Revolution" to socialism/communism.

Last time I checked, after 30 years of an unsustainable trade policy with the China, they are still communist, we are much more socialist.

[central_va]

We went through this last week, and you kept moving the goalposts. Marx would’ve been proud of you. Do you agree with him very often?

Nice

[1rudeboy]

Great! Now, what do you think Marx means when he states, "In this revolutionary sense alone?" [emphasis added]

[expat_panama]

Blue state thugs fit the pattern, whether they’re greifers pushing for tax hikes or knife flashing punks on a subway, they start by asking for a handout and then they get crabby.

[1rudeboy]

Do you want me to link to that thread?

[1rudeboy]

They do seem to have an eye on my wallet.

[central_va]

I am saying you promote a thing(free trade)that Karl Marx thought would promote communism. You then either disagree with Karl, or you are useful idiot of the left.

Do you want to outsource a rebuttal to me, why Karl is wrong about this, or can you make you own case?

[central_va]

When a woman is defiled by a group, they hate it when the victim complains. They prefer the fantasy the she "really enjoyed it".

I am trying to find they difference between this sorry brutal occurrence and the situation with Free Trade.

[1rudeboy]

I'm trying to get you to understand the quote, buddy.

How do you tell a communist? Well, it's someone who reads Marx and Lenin. And how do you tell an anti-Communist? It's someone who understands Marx and Lenin.
--Ronald Reagan

[1rudeboy]

Capitalists as rapists? Now, who could have possibly planted that idea in your head? LOL

[central_va]

Capitalists as rapists? Now, who could have possibly planted that idea in your head? LOL

The last time I checked the China WAS A COMMUNIST COUNTRY. Benedict Arnold and Judas Iscariot were good capitalists too.

[1rudeboy]

Still trying to get you to understand that Marx quote, buddy.

[Citizen of the Savage Nation]

Added Value...that’s exactly something that came to mind lately when I try to grasp this issue. For example, Apple designs an iPhone in California and it gets made in China and shipped here and all over the world...let’s say for $200 a pop...that whole value gets credited to China, but the design from the US that turned that product from $50 of parts to $200...does not benefit the US stats by these accounting rules, but instead goes all to China. So Apple would show a huge trade deficit with China even though they get a lions share of the profits (due to that $150 value added), their stock skyrockets, benefitting the shareholders (mostly in America)...that doesn’t make a whole lot of sense but that’s how it works as far as I know.

[dennisw]

We are already in a Trade War with Communist China. Our high trade deficit, and, the non-trade barriers placed on US goods by the Communist Chinese (Currency devaluation the big one)....and there is already a trade war with Communist China

Exactly and we are losing. We lost factories and production to them, making for loony toon trade deficits that the "free traitors" don't mind at all. They claim it is a actually a plus when foreigners take those US Dollars they earned and invest them here. So many freepers have a slave mentality that it's just fine for Americans to work in Toyota factories here and the Japs cart home all the profit. Or take us their US profits to build new plants in Malaysia and Uganda

Some slaves keep their pride. But not the US slaves (free traitors) who say how great it is when foreigners build factories here that Americans should be building and owning and taking home the profits.

I don't mind some foreign investments here but not at the scale it's done now