Posted on 03/05/2010 1:32:25 AM PST by bruinbirdman
The country is increasingly relying on exports to the U.S.
Last year everyone knew Beijing was developing other export markets and decreasing its reliance on the U.S. I read commentary after commentary to that effect, and I believed that Chinese officials, who can be a determined lot, would be successful in diversifying away from America's market.
Why? It was sensible for China's technocrats, who properly worried about the shaky state of the American economy, to lessen their country's dependence on debt-ridden, shopped-out U.S. consumers.
In any event, Chinese dependence on exports to America was reaching unhealthy--and unsustainable--levels. In 2007 China's export surplus with America was $258.5 billion, just $3.7 billion less than the country's overall trade surplus of $262.2 billion. In 2008 all but $27.5 billion of China's overall surplus of $295.5 billion related to sales to the U.S.
In short, China's U.S. trade surplus constituted 98.6% of its overall surplus in 2007. In 2008, that figure dropped to 90.1%. Last year, it was clear the percentage of China's surplus with the U.S. would fall even more.
Incredibly, it did not. In 2009 China's surplus with the U.S. was $226.8 billion. And China's overall trade surplus was $196.1 billion. In short, the surplus against the U.S. was 115.7% of China's total surplus. The Chinese, therefore, ran a trade deficit with the rest of the world to build up a surplus against us.
What is the explanation for this anomalous result? As an initial matter, China's total exports declined 16.0% last year while exports to the U.S. fell only 12.5%. So Chinese exporters increased their dependence on the American market in 2009. But these gross export figures are only another symptom of the same trend, not an explanation for it.
Perhaps the American economy, for all its apparent weaknesses, is stronger
(Excerpt) Read more at forbes.com ...
Magic forumula for prosperity to occur: you need to work, save, then spend.
US is on the spending part. US do not produce or save enough for the spending to continue. US spending is relied totally on borrowed money. As long as they could borrow money, they could spend. It is drawing near that even borrowed money is not enough, so now US is simply printing money to spend.
WAY too many economist on the left and right, think as long as they keep the spending going, all is well. They’re wrong
We need to stop buying crap from China, even if we have to do without some stuff. Borrow that tool from your neighbor or brother-in-law. Do without new Christmas ornaments.
Quit buying Chinese merchandise!!! Make it, borrow it, do without, improvise, just quit buying anything from China unless it’s an absolute necessity. Create the demand here. It’s the best way to “stimulate” business and job growth. If there’s a demand, eventually the needed capital will follow it. Let that happen here, not in some other country.
Stop buying from wal-mart then.
When all things are worthless,owning America is better than owning Europe..
I bought some Nike socks at Wal-Mart last week. Made in the U.S.A.
We’re heading toward either extreme cuts in spending (radical income and job cuts) or repudiation of government debt. We know what a sovereign debt crisis (or crises) would do to bond markets. We know what bond collapses would do to the stock markets, and consequently, to millions more jobs. Maybe the time to pay the price for centralized, global management of business is not far off. ...maybe a few months to a couple of years? We’ll see.
Mr. Chang’s last paragraph of warning and advice (page 2) is interesting. It appears that he put a bit of conscience into that.
interesting read
We would like to make them here.
We have the second highest corporate tax in the world
We tax investors who invest their own after tax dollars
We have onerous red tape and regulations
We have health care costs hanging over our head
We have a VERY uncertain view of where our tax policy will be in two to five years
“America once was unique in all the history of the world. Its essence was having an abundance of something rarely found in other countries: freedom from government.” Tenth amendment center.
This was the key to our past prosperity.
Right, along with Target, Home Depot and so on.
Good point, and I agree. As soon as we get the second amendment squared away, which we believe will happen in a few months, it will be time to organize a broad support for the resurgence of the 10th amendment.
Don’t buy anything, anywhere! Down with corporations!
I was in walmart looking at computer chairs the other day, “made in china” was on the side of the box.
It was better when we (whole world too) were less productive and everyone's labor was needed
(this post will make J throw a conniption fit)
LOL! Just yesterday (here) we were wondering how China was going to unload T-bills. Now we find out they're dumping them on themselves!
Seriously?
Why don’t you tell me what we can do with all those whose labor is not needed anymore? Due to the “productivity gains” you fake capitalists like to tout. I’m talking about USA, not Panama the place you bugged out to
Why are we (USA) invaded by illegal aliens from Mexico and Central America? Mostly because they are unemployed or under-employed in their native lands. Those Hispanic nations to our south send the laborers they don’t need or want to America
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