China overtakes United States as top destination for foreign investment

channelnewsasia.com ^ | 23 September 2004 0213 hrs | AFP

[LowCountryJoe]

...I don't like trade with no tarrifs; for a powerhouse its like running a half full bathtub with the drain open and expecting it to fill. It doesn't; eventually it becomes empty...

The only thing that's empty here is your knowledge regarding the consequences of what a tariff does. Are you aware of what deadweight losses are? The net effects of a tariff are losses - however, because the small positive effects of one are more visible, they are politically expedient in protecting some domestic people (at a very costly expense to the others - in the aggregate) for a short period of time until the inevitable happens in the long-run anyway.

[e_castillo]

Slave trade in China is booming

Yeah, for Walmart!

[Destro]

How soon till the cost of financing our debt starts to bite? The cost of borrowing for the American dollars can only go up.

[LowCountryJoe]

How soon till the cost of financing our debt starts to bite?

It happens almost immediately by way of the exchange rates of currencies and the interest rates on those debt instruments that people are purchasing in the primary market.

The cost of borrowing for the American dollars can only go up.

Rephrase this in a different way and I'll attempt to respond to it. As it is written I am not sure what you're trying to get across.

[Doctor Stochastic]

So does this mean that the US will no longer be owned by foreigners?

[Destro]

What is this to you a term paper submission on my part? :)

[ponder life]

Has anyone considered that cumulative investment in the US is still larger than China? Or that, on a per capita basis, foreign investment in China may not be anymore than any other developing nation?

During the peak years of foreign investments in the US, invested amounts nearly reached $200 billion per year.

What is happening is not unusual for a country that have chosen to take part in the global trading system. And given China's sheer size, the investments numbers shouldn't be surprising.

[LowCountryJoe]

What is this to you a term paper submission on my part? :)

I kind of thought it was a debate of the issue. Is this some kind of diversionary tactic to avoid answering the question...so that you don't have to announce - to the rest of the thread's readers - that you're not going to dignify my valid question with any response?

[LowCountryJoe]

My bad, you didn't ask a question did you. I'm sorry. OK, why are you avoiding the issue of trying to explain to me again what it was you were trying to get across?

[Destro]

It is hard to rewrite perfection - but here goes - as the dollar is devalued as capital flees America - $ buying power diminishes (as it has currently) and thus it costs me more to keep dollars over other currencies.

[Destro]

, why are you avoiding the issue of trying to explain to me again what it was you were trying to get across?

A) I posted a smiley face - univerasl symbol for being light hearted and B) maybe I have a life and had no time to elaborate? and C) why the uber attitude on this subject? Defending something? or someone?

[LowCountryJoe]

So, let me get this straight...if the purchasing power of the dollar decreases due to capital outflow and this lowers the real costs of American goods from the point that they were at (in the foreigner's eyes)...and when this creates more exportation of our products because foreigners are now demanding more of our goods...and this create more jobs in America and decreases the trade deficit, then why do the board protectionists complain about trade deficits and also, in the same breath, complain about capital outflows? Which way do you people want it? Do you people really believe in the Bizzaro economic universe where others give their products away to you and then tell you that you can also have claims on their remaining property all in one neat little transaction?

[Finalapproach29er]

I understand what your saying, but small tarrifs might discourage borderline businesses from leaving. I understand that over time, we will all lose a little, but I'm not an effenciency purist.

We've got poorly educated peole who need to hold these jobs during the wrenching trasion we're in. I don't believe in high tarrifs, for the reasons you previously stated.

What can I say? I believe in helping struggling American a little bit even if I can buy a fifth car ten years from now. I believe in Henry Ford economics. I guess I'm just a sentimental fool.

[Destro]

All well and good if we were a manufacturing based economy. We are no longer. We are an importer AND DEVALUING THE DOLLAR MEANS WE ARE POORER than we were before...and what we buy is from overseas - no rebirth in manufacturing occuring in America because investments are now going overseas. If we had a tarrifs that would be an inducement to build in America and invest in America.

How is that answer professor? Clear enough? :) (note the smiley face)

[LowCountryJoe]

...We are an importer AND DEVALUING THE DOLLAR MEANS WE ARE POORER than we were before...

Did you have some kind of revelation or something? I thought you were one of the ones that didn't want that "cheap foreign crap" coming over here to begin with; now you concede that their imports might be making us better off. Well hells bells we might be making some progress with the learning here.

...no rebirth in manufacturing occuring in America because investments are now going overseas...

Sure, but this increases the worth of their currencies relative to our (devalued) dollar. This make their goods more expensive...this causes more domestic firms to enter the market (though it doesn't happen overnight). Then labor is pulled (attracted) from other industries that used to employ more educated laborers. Why do some of these human-capital intensive industries shed jobs? Well, it's now because THOSE NON MANUFACTORS have to release labor to those MANUFACTORING industries so that the unskilled-labor intensive stuff can be produced to meet the continued domestic demand. I really don't want to sit behind a sewing machine, stitching garments...but if that's what you want, more power to you.

[Destro]

I did not say it is making us better off? Where did you read that? If that is the level of your reading comprehension - sorry for you.

[Destro]

I did not say it is making us better off? Where did you read that? If that is the level of your reading comprehension - sorry for you.

I wrote: ...We are an importer AND DEVALUING THE DOLLAR MEANS WE ARE POORER than we were before...

So how the hell did you get this impression:

Did you have some kind of revelation or something? I thought you were one of the ones that didn't want that "cheap foreign crap" coming over here to begin with; now you concede that their imports might be making us better off. Well hells bells we might be making some progress with the learning here.

How is being poorer (and we are poorer - we are debtors and we have weak money and we have weak exports) making us better off?

[LowCountryJoe]

What else could you have meant. If the only thing that is falling is the dollar then domestic products and domestic ability to consume does not change. If you explain that we are now poorer I can only assume that this means that those foreign goods that we were/are purchasing are costing more and therefore making us poorer (relatively to where we were). In the past, you have ripped foreign goods as crap, no? Did you have a change of heart? Or is it still "crap"? And if it is still crap, then why would we be poorer for buying it with a devalued dollar?

And speaking of poorer, America is poorer? Since when? I have a loan to pay for my home because I do not have enough disposable cash to buy one outright. Not only do I live in that home and enjoy it but it is also an investment that I can turn to cash at a later date. Did this make me poorer? In debt yes, but poorer?

[Destro]

When you owe money you are poor. You can live well and be poor - until the creditors call. Also, America is becoming poorer - incomes have decreased for the last generation.

Incomes in the 60s bought more per comparitive buying power.

[LowCountryJoe]

Show me! And when you do, show me that those goods and services in the 1960's (in the aggregate) were better than the goods and services that we have today. Two separate concepts. First, show me that we're able to consume less in today's dollars and then tackle the second one.