Posted on 08/22/2002 5:57:00 PM PDT by maui_hawaii
Step Two: Raise taxes on all technology imports from China to say 5 times their current level. Also raise income taxes for all corporations importing from China. Call it 'the China penalty'. It won't hurt the corporations, it will just have them comply with moving to somewhere better and more productive, and as to not have such a trade imbalance.
Step three: realize that the internal China market is not peechy and rosy. If you manufacture 90% of your products in China, and sell to the Chinese, with no tarriffs, your sales and profits will be far from stellar. The trade off is not worth it.
Do a study. Find out about their massively 'huge' market. Learn about it tip to tail. Sort through facts vs propaganda, or the whole dot.com 'we hope China is a big market' vs what really goes on. Publicize all the numbers including all the profits, all the losses of all corporations doing business in China. That way we aren't running an ideological battle.
You will find that every China apologist businessman will FEAR such a study.
After that, work on steps one and two.
It will take one act of congress to settle this debate. That act will be to have open and transparent and PUBLIC disclosure of corporate operations in China using all of these new found accounting standards.
It will take minor retooling, such as requiring the numbers to seperate out what is exported revenues vs what is actual in country sales. Also seperate out what is sold to other US corporations, as well as what is sold to the government.
Instead of looking at this big mass and fighting over "China", why not look at the nuts and bolts, just like they do everywhere else, except in China of course.
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Let investment decisions be based on real risk evaluations and real rates of return.
Stray well - Stay safe - Stay armed - yorktown
You sound more communist than the Communist Chinese.
Let investment decisions be based on real risk evaluations and real rates of return.
Most capitalists would argue against, not for, tariffs. Investment decisions are best made without tariffs and other anti-capitalist measures.
China is a dot.com scheme in process and we are all buying shares.
For long term sustained economic growth we have to be extremely careful about China.
We will be a whole lot better off somewhere else.
You are spot on IMO. Good post.
Another thing too...China's size is not a plus, its a negative. Especially combined with an authoritarian government.
In a place without as much labor pool available, incomes rise at a much faster pace. As incomes rise, so does consumer consumption. The right to form a union to get higher wages (albeit often abused in the US sometimes), in these developing countries is fundamental to their healthy growth. Higher incomes, limited government taxation, and increased consumption mean good business.
The Chinese government is too busy trying to stay on top of everyone.
With China though 'private' means 49.9% govt owned. The govt hoards the money, then spend it on govt projects. The government IS China...They ARE the market.
Its not a place focused on the individual consumer which is not the kind of economics anyone is used to, or works.
There are so many things fundamentally wrong with business in China.
Our corporations need to learn that cost cutting is not growth. Growth means an outward growth, meaning adding the number of consumers, which means fundamental individual rights and individualism. Thats directly opposed to the CCP way of doing things. Yet for the quick buck, corporations are not challenging their system.
I am all for trade as long as its on those terms.
Thats how Korea got rich, Japan, Singapore, Taiwan, etc.
Those have been some good investments.
Also check out #13 and #14
Our corporations are becoming tools of the communist party.
Their short term interests are in serving Beijing. Beijing makes certain of it.
Unfortunately, the market is limited to the small fraction of the population in coastal cities in the SE part of the country, and to a certain extent, Beijing, who have any sort of disposible income. It's ususally break even at best and mostly for market presence and the access to the labor market in the chase of the vanishing point known as contuniuous cost reduction via external overhead reduction.
I suspect there is also another motive from the standpoint of the KMT industrialists. Many of them (and mind you, I know some of them) believe that they will be able to carve out a niche on the mainland at some point for themselves and their families. They have lost their martial spirit and have been duped by the move from Marxism to Stalinist Fascism that they will be happy as wealthy subjects of the Forbidden City. In other words, they now believe in convergence of a sort. That's why they are at odds with the DPP, who are Western facing and want to restore the de facto pre Victorian era independence of Formosa, with a fall back position of rejoining Japan, who had annexed Formosa in the late 1800s and kept it until 1945.
Reading from PLA writings regarding unrestricted warfare, one of the dimensions of successful war under high tech conditions is to use the opponent's economic position against them. I am afraid to say that the war between the PRC and Taiwan (and the US for that matter) began some time ago.
Capitalism is gonna do whatever it's gonna do, regardless or what you or anyone else thinks "should" happen.
Perhaps you think business conditions in Third World republics like India, Brazil, and Argentina are better? Come on, in India, despite 50 years of democracy, they have yet to enact basic labor and land reforms that allow private businesses to hire and fire people as they wish to or buy property when they want to.
I am all for trade as long as its on those terms.
Thats how Korea got rich, Japan, Singapore, Taiwan, etc.
Those have been some good investments.
For your information, US firms outsourced manufacturing to Japan, Singapore, Taiwan, etc. over the past few decades for "cost-cutting" reasons as well. It's only because these places have become rich themselves and their labor rates so high that manufacturing is now being transferred to mainland China, where labor wages are still low. Japan, Singapore, Taiwan, etc. all developed middle-classes through decades of exports, and China today is merely following the same path (including politically, as all these places had one-party rule).
You're talking about approximately 100 mil. people here (a "small fraction" in China is still a large number of people), who enjoy a standard of living on par with Taiwanese or S. Koreans. 100 mil. people is almost as big as Japan's entire population or the entire US workforce. Those 100 mil. new bourgeois didn't even exist 20 years ago. As time goes on, you can expect about another 100-200 mil. Chinese to join China's middle class each decade. China is already the world's largest market for cell phones, refridgerators, air conditioners, light bulbs, etc. Pretty soon, it will replace Japan as #2 in PC's. In the meantime, today's Third World republics are so chaotic and dysfunctional they need one IMF bailout after another. Representative democracy in Third World countries is largely dysfunctional around the entire world.
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