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China is getting a bad trade-gap rap
MSNBC ^

Posted on 10/08/2003 8:30:52 PM PDT by maui_hawaii

Oct. 7 — With the U.S. presidential election only 13 months away and the American economy stuck in low gear, politicians in Washington are eager to show voters that they’re doing something — anything — to address worries that the U.S. is losing jobs to low-cost rivals in Asia. China, thanks to its gigantic trade surplus with the U.S., is a favorite target.

(Excerpt) Read more at msnbc.com ...


TOPICS: Business/Economy; Foreign Affairs
KEYWORDS: china
He’s concerned by some of the proposals he’s seeing from lawmakers, such as a call to impose tariffs on Chinese goods unless China revalues the yuan. That’s “sheer madness,” says Hu. “It won’t help U.S. jobs — but will really hurt U.S. consumers.”

What garbage. China is a major cause of economic problems globally, and especially here. When we take action against China then we will see jobs grow. Its cause and effect and simple as that.

They talk about hurting consumers...yeah whatever. Two months back we were talking about deflation and China panderers were claiming 'China only has a small portion of global exports...China is small and has no influence on such things...'

If they have no way to effect deflation then they have no way to help consumers.

They should adopt the motto "Whats best for China comes first" or "China can do no wrong."

1 posted on 10/08/2003 8:30:52 PM PDT by maui_hawaii
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To: All

Let's keep the Dem's on the run!
Click the Pic!

2 posted on 10/08/2003 8:31:45 PM PDT by Support Free Republic (Your support keeps Free Republic going strong!)
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To: maui_hawaii
Besides they are Christian killing scumbag commies. We should deal with China the exact same way we have dealt with North Korea, Cuba and the Soviets. Nothing will change because Congress is OWNED by internationalist corporations.
3 posted on 10/08/2003 8:39:26 PM PDT by Rightwing Conspiratr1
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To: maui_hawaii
‘The average U.S. manufacturing worker is an auto worker or a steel worker, and the competitors are Japan, Europe, maybe Korea — but certainly not China.’ — JONOTHAN ANDERSON Economist, UBS

Country and other highlights (Census Basis, not seasonally adjusted) The July deficit with China ($11.3 billion) and July imports from China ($13.4 billion) were both records. The July deficit with Western Europe ($11.2 billion) and July imports from Western Europe ($23.7 billion) were both records. The July deficit with Canada ($5.0 billion) was the highest since January 2001 ($6.8 billion). July imports from South/Central America ($7.0 billion) were a record. The July imports of advanced technology products ($17.6 billion) were the highest since March 2001 ($18.6 billion). The July quantity of crude oil imports (339.7 million barrels) was a record.

If you look at the data and the above quote, the deficit with the EU is 11.2 billion vs. 11.3 billion for China.

China is responsible for about 1/4 of the trade deficit, but not all. The US has a deficit problem with almost every country on the face of the planet including China. China is a large and populous country. The fact that the deficit is large should not be a surprise.

4 posted on 10/08/2003 9:07:58 PM PDT by staytrue
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To: maui_hawaii
Hugest load of crap I ever read.

It won’t help U.S. jobs — but will really hurt U.S. consumers.

Right, some Chinese national really cares about the US consumer.

The numbers support that argument. Last year, China had $300 billion in total imports, and exports were just a little over the same amount. Hence, China’s overall trade surplus was modest, even though the figure with the U.S. was $103 billion. But when it comes to the rest of Asia, China has a trade deficit that’s probably $60 billion. The deficit with Taiwan alone is $30 billion.

China's trade with the rest of the world is somehow our concern, or wipes away the surplus we are running with them? Nice try.

Jonathan Anderson, an economist at UBS in Hong Kong, agrees that all the talk about China stealing American manufacturing jobs doesn’t make sense. When it comes to manufacturing, he notes that the Chinese are strong in sectors that aren’t big parts of the U.S. economy, such as light industry. China now exports lots of PCs, for instance, and not many American workers were making computers.

       “The bottom line is that there aren’t a lot of those jobs left in the U.S.,” Anderson says. “The average U.S. manufacturing worker is an auto worker or a steel worker, and the competitors are Japan, Europe, maybe Korea — but certainly not China.”

That's right, Americans don't build computers... anymore that is. And, China doesn't produce steel. OK.

How much value-added does China get from all of its electronics exports? Not much, according to Anderson. “About 75 percent of the value-added is imported, from Taiwan, Korea, Japan, whatever,” he says. “The one thing that they do get is a hell of a lot of jobs.”

Impressive, he made a couple paragraphs before he contradicted himself.

How much value-added does China get from all of its electronics exports? Not much, according to Anderson. “About 75 percent of the value-added is imported, from Taiwan, Korea, Japan, whatever,” he says. “The one thing that they do get is a hell of a lot of jobs.”

Next is the part where they will tell us how envious they are of our huge American penises.

5 posted on 10/08/2003 9:12:30 PM PDT by sixmil
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To: maui_hawaii
politicians in Washington are eager to show voters that they’re doing something — anything — to address worries that the U.S. is losing jobs

They better be doing something or they'll be the ones looking for jobs.

6 posted on 10/08/2003 9:21:21 PM PDT by boycott
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To: maui_hawaii
But remember, the corporations who are now making money hand over fist with this cheap labor have a major financial clout. It will be interesting to watch: what is right for middle class Americans or what is right for the party's deep pockets.
7 posted on 10/08/2003 9:27:03 PM PDT by dirtydanusa
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To: dirtydanusa
what is right for middle class Americans or what is right for the party's deep pockets

Hmm. Or what's right for those middle calls Americans who's 401k are filled will stocks like Motorola, GM, GE, or any of ther other top investors in China.

Not exactly as cut and dry as you'd like to make it.

8 posted on 10/08/2003 10:54:51 PM PDT by Kaiwen
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To: dirtydanusa
what is right for middle class Americans or what is right for the party's deep pockets

Hmm. Or what's right for those middle class Americans who's 401k are filled will stocks like Motorola, GM, GE, or any of ther other top investors in China.

Not exactly as cut and dry as you'd like to make it.

9 posted on 10/08/2003 10:55:13 PM PDT by Kaiwen
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To: maui_hawaii
What’s going on in Washington is causing alarm among many China watchers. Fred Hu, a managing director at Goldman Sachs in Hong Kong, says the China-bashing “has serious potential to do a lot of damage.”

What's going on in Washington has been causing alarm among most American workers for 25 years! Washington will have to do more than flap their yaps. Actions speak louder than words.

And what about the 730,000 American workers who are displaced yearly due to the Illegal alien invasion, Mr. President?
10 posted on 10/08/2003 10:56:02 PM PDT by ETERNAL WARMING
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To: dirtydanusa
But remember, the corporations who are now making money hand over fist with this cheap labor have a major financial clout.

In the first place, Congress is to regulate trade according to the common good. The common good has been sold out by our bought and paid for politicians for many years now.

It's just that the chickens are coming home to roost, and it isn't a pretty picture. Free Trade benefits very few...those at the top. The rest become third worlders with no hope....and we all know what history has to say about that situation.

I am so grateful that the Hamiltonian principles won over Jefferson's Free Trade, or there wouldn't be a mighty nation to destroy. Their wisdom astounds me.
11 posted on 10/08/2003 11:00:29 PM PDT by ETERNAL WARMING
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To: sixmil
You started badly, got worse, and finished in a truly moronic fashion.
12 posted on 10/08/2003 11:01:25 PM PDT by TopQuark
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To: maui_hawaii
China is a major cause of economic problems globally, and especially here.

In the short term, tarriffs against China might help, but then production would just move to someplace like Vietnam. If China wan't the problem, it would be Vietnam, India, the Philipinnes, or some other developing country. The problems we have with China are the sypmtoms of how we're dealing with globalization, and can't be pinned on any one country.

I think both sides of the issue are blowing things out of proportion. China isn't a goldmine, but for some companies, it will be very profitably. It also isn't going to destroy the world economy, but it will force some changes.

Economically, politically, and culturally, I'd say that China is on par with Brazil or Mexico. Not the rising giant that some would like to make it out to be.

13 posted on 10/08/2003 11:03:29 PM PDT by Kaiwen
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To: ETERNAL WARMING
I think the trade deficit with the EU shows that it is not globalization or illegal immigrants that is the problem. It is the American passion for spending more than they make that is the problem.

We should be kicking the EU's butt in trade, but we are not.
14 posted on 10/08/2003 11:08:39 PM PDT by staytrue
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To: staytrue
Exactly. The personal savings rate in the EU is something like 3 times higher than in the US. Same is true with Japan, and that's after its fallen almost by half sine 1999 to around 7 percent today. The US has jumped to 3 percent in the last two years, after acutally being negative for awhile. In comparison, China's PSR hovers around 40%. While Americans blow their money on Visa bills at the GAP, people in the rest of the world are building up their capital, buying houses and starting businesses.
15 posted on 10/08/2003 11:16:06 PM PDT by Kaiwen
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To: TopQuark
Sorry to have offended you TopDork, we all know which side of the issue you stand on.
16 posted on 10/09/2003 11:19:35 AM PDT by sixmil
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To: sixmil
Sorry to have offended you You are too presumptuous my friend: to be offended by someone, I have to respect that person. This is not the case here at all:

they will tell us how envious they are of our huge American penises.

Your therapist (as well as your wife) should be concerned with your mental health. Fortunately, I am neither.

we all know which side of the issue you stand on.

You certainly don't: what would you know about the standards of discourse?

Sorry to have interrupted your naval-gazing with my post.

17 posted on 10/09/2003 11:49:27 AM PDT by TopQuark
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To: Kaiwen
If we move to somewhere else we would be 100 times better off. That move would actually be a very smart move. The labor market in China is too big for the US to absorb everything they can make (but they can't buy themselves).

They are creating a bad situation in Asia. Lets say there were 10 million jobs in Asia related to trade and manufacturing... Without China those 10 million would be spread over less people, thus creating a tighter job market. That kind of job market is exactly what is needed for economic recovery here and there both.

Its not all about supply. China can produce like hell, but can't buy worth a ______.

If China were to develop on a different course then it would be a different story. They are trying to use the ASEAN model when they aren't built for it.

China is creating a vast overproduction problem and oversupply of labor and other things.

You think that helps or hurts our 401k's?

If a company is forced to move to China to save on costs, and end up saving 10-15% on costs, but their product prices drop 25% with that move... are they really better off?

Actually they end up 10-15% worse off by trying to save money in an unhealthy way.

The US could easily economically absorb Vietnam and in turn create huge demand at profitable margins in Vietnam.

The problem here is they are trying to solve China's internal problems through exporting to us. Its screwing everyone else though.

The rest of Asia accounts for 1/3 of our exports and doesn't put the same kind of pressure China does. It has healthily developed. China is becoming a detractor, not an adder.

What you said about moving elsewhere...I have been advocating that exact thing for a LONG time.

Shipping parts from Thailand and Singapore to be assembled in China...then shipped to the US...IS NOT consumption inside of China. No matter what their numbers say thats never going to be the case. That is NOT the "Chinese market"... numbers often distort the truth.

18 posted on 10/09/2003 1:13:44 PM PDT by maui_hawaii
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To: ETERNAL WARMING
. . . Congress is to regulate trade according to the common good.

Whose Constitution are you reading?

19 posted on 10/09/2003 1:17:23 PM PDT by 1rudeboy
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To: maui_hawaii
If the imports we currently get from China move elsewhere, the US economy is still in the same situation--an over abundance of imports vs. exports. It would affect the job market abroad, but getting items from somewhere else wouldn't affect the issue in the U.S. Neither, in my opinion, would a re-evaluation of the RMB, though it would be nice for my bank account. :)

As for the fears of China's export-based economy, I personally believe its too early to tell. True, manufacturing in China is certainly not the same as consumption. But the same thing could have been said about Japan thirty years ago, but their export-dominated strategy kicked up internal consumption. Unfortunately for them, they held on to that strategy too long, with the current results. It is very possible that the same thing will happen in China--it'll spur domestic consumption, but will result in an eventual economic downturn. The Chinese property market is already riduculously overpriced.

I think that it is too early to judge whether China's size will affect the out come. You seem to think it will, but I'm not convinced.

20 posted on 10/14/2003 3:30:42 AM PDT by Kaiwen
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To: Kaiwen
If the imports we currently get from China move elsewhere, the US economy is still in the same situation--an over abundance of imports vs. exports.

Not nessesarily. Not all trade relations are created equally. Likewise, not all countries are in the same internal economic funk as China.

Historically if we imported $1 worth of products from Mexico we exported 75 cents.

With China its $1 for every 15 cents.

Other economies around the world are much easier to come alive and create demand. It would most definately create demand for exports if we focus on those economies. It would have several effects.

1. American companies can compete a whole lot better against Mexican manufacturing, etc. In some cases they still won't be able to, this is due to real competitive advantage. China currently is taking investments in things they don't have a real competitive advantage in...They make their own advantage visa via currency manipulations.

2. Spreading the volume of trade over more responsive economies will lead to MANY more exports from the US to those countries.

In short when we combine #1 and #2, we will burn the trade deficit candle on both ends... and even if we don't decrease the overall amount of imports, we will increase our overall level of exports.

Its not JUST about China's size. It has an effect, but things rely on China's internal economy too.

China's internal economy is half defunct. It could be the level of development or many other things, but none the less a million bucks imported from Mexico leads to approximately 5 times the amount of exports the same amount creates in China.

21 posted on 10/14/2003 5:37:40 PM PDT by maui_hawaii
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To: Kaiwen
China hasn't gotten its nickname "the FDI black hole" for nothing...

It has most definately earned it.

22 posted on 10/14/2003 5:40:20 PM PDT by maui_hawaii
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