LOL!
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Posted on 05/14/2007 3:37:27 PM PDT by gas0linealley
The bilateral deficit with China has increased almost without pause for 20 years even as both exports and imports were on the rise. In 1985, the two sides traded less than $4 billion in products each way, and their trade was close to balanced. (See table below.) By 1995 the U.S. trade deficit had already risen to $33.8 billion. By 2004, U.S. exports to China were close to three times higher than in 1995, but imports from China were more than four times higher.
(Excerpt) Read more at usinfo.state.gov ...
Yeah, how I miss my American power tools. Porter-cable. DeWalt.....hell, even Bosch is made in China now. Who woulda thunk the Germans would sacrifice their reputation for quality stuff and go outsource!
How long before our Navy can’t get ships built in the US?
What are you talking about?
They are not outsourced. These are tools assembled by Bosch employees in China.* The key parts are probably imported into China (to avoid having to pass on the relevant technology to the mandatory 50% Chinese partner) and bolted together there. A lot of final assembly is done in China because labor costs are so cheap that they outweigh the cost of shipping container-loads of different parts, sorting them out on the assembly line, and then shipping the assembled product back to stores on the other side of the planet.
* Who are probably better-educated than their counterparts in Germany, not because Chinese are generally better-educated, but because Bosch, like other Western companies, likely pays well above Chinese company wages to get a better-quality worker. This is what people mean when they talk about Chinese labor shortages. It's not a shortage of hands per se - it's a shortage of people qualified (ethically- and skill-wise) to work at Western companies at wages that are competitive with low-wage countries outside of China.
None of this is by accident. The Chinese have it pretty well thought out.
Here is a link to an old article that will give you some information about the demise of US shipbuilding capability.
http://findarticles.com/p/articles/mi_qa3738/is_199707/ai_n8764484
Their artificially undervalued currency has a lot to do with it.
just watch. while they're crying about the dollar going ever lower on other threads, soon enough China will have no choice but to unpeg the RMB. Then we'll watch the tables turn.
Dunno. But I wouldn't doubt they're thinking about it. We haven't built a merchant ship in the United States for maybe thirty years or more. The invertible result of doing things like this is that eventually you will no longer have the skilled people in our own country to do these things. To me, that is a security matter.
In China, theft* is a national pastime, in both the public and private sectors. We're not talking about walking out with the company's stationery, either. The casual attitude towards theft just staggers the imagination, and borders on kleptomania. It's a cultural thing, which is probably why government corruption is such a big problem there.
Why are so many foreign companies investing in China? Because shrinkage can be controlled - via higher salaries, internal controls and auditors from the head office, et al, the combination of which is still cheaper than manufacturing in the countries around China because Chinese pay is so low.
* This takes many forms - taking kickbacks, substituting inferior materials, expense account abuse, etc. It's not stuff that doesn't happen stateside. The difference is that it's the exception stateside, and the rule in China. Because it's the exception stateside, you can choose to prosecute individuals who step out of line. If you went after every corrupt employee in China, the entire company payroll would be in jail. (There's a bit of hyperbole here, but it's pretty bad).
We run a big deficit with China because of the way the supply chain is constructed. China is the place where final assembly takes place for a lot of products from the rest of the world. When Hewlett Packard sends a load of inkjet print heads manufactured in Singapore to China for final assembly into printers, that printer gets stamped "Made in China". China records the printheads as imports from Singapore and the final product as exports to the US. Wherever the high-value parts come from, as long as the final assembly gets done in China, the import shows up in American trade statistics as an element of the trade deficit. This includes Dell computers that are assembled in China, even though it is full of high value parts that are of foreign origin, including Intel and AMD chips, Taiwanese chipsets, NVIDIA or ATI graphics chips, Cirrus Logic and Adaptec components, etc. The fact that Chinese hands employ screwdrivers and other fastening tools to bolt the pieces together gives the computer a "Made in China" label.
The idea that China could somehow "stop financing" the US trade deficit is an illusory concept tied to mercantilistic ideas about economics. If they stop depressing the value of the yuan by buying dollars, the yuan will rise in value, causing a lot of foreign companies to close their Chinese plants and move to locations where expenses in dollar terms are cheaper. Trade flows are determined at the company, not the governmental level. If the yuan appreciates significantly, even Chinese companies will move overseas to gain a cost advantage.
I give - what's an "unpeg the RMB"?
LOL!
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