Imagine for a minute that you have a pie. Every single year more and more people want a piece of same old thing. What results is each one having a smaller and smaller piece of the pie. In the case of economics it is a case of over production and not enough consumption. This pressure forces companies into China, whether they like it or not. On the flip side though, if we have a strategy that focuses on making the pie itself grow bigger every year then the pressure isn't so bad. Its a race between the tortise and the hare. The latter is slow but steady 5-6% growth year on year, and the other is a wild eyed, hope for survival in a disjointed economy.
China importers are like a pack of wolves who are fighting over the existing pie, but do very little in trying to make the pie grow bigger.
There are very few, if ANY corporations that will tell you what they sell in China, in US dollars, and how much the margins are on those products.
The SEC should force them to disclose this information.
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As much as I despise the Chinese Communists this couldn't happen if there wasn't complient US companies willing to import.
True.
I would like to say that IMO it is not trading that hurts the US at all, its the lack of trade. We don't trade with China. We purchase from them in an a complex purchasing agreement, which we finance.
When we are able to import from, then export to, a country it makes for more balanced trade and actually creates work here.
When we have a screwed up relationship as the one the corporations have built in China, it is wrong. It is not trading in general, but the nature of the China relationship that I DO NOT LIKE and should be stomped out forever.
Cheaper is not always better.
For every dollar we import from Mexico we have about a 75 cents export opportunity. With China, for every dollar we import we have about a 15-18 cents export opportunity. Of those two, which relationship is better for our economy and job creation?
They argue that China is cheaper, but what has a better long term aspect on growth? With a Mexico type relationship we get cheaper, but profit making, and have export opportunities. With China we get really cheaper, for now, and thats it. The former requires a more efficient business, which has not been the focus as of late. The latter is a way to make ends meet, for now, but neglects realistic longer term, but real return, prospects.
China needs to start buying what it makes, instead of pawning that off on everyone else.
We need a go South campaign, at China's expense.
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I say we should cut our imports of China made products by at least half.
The way we can do that is, first, sign FTA's with various countries. Second, raise the bar of entry to products from non FTA countries. Don't just raise the tax on Chinese made goods, but overall, raise them. Thus China won't be able to say we are picking on them. It will be all nice and legal too and would not require changes to PNTR or China being in the WTO.
It will make using the FTAs the most profitable way to import.
I am all for President Bush, but something here needs to change. Corporate America needs to change its tune.