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    Tacitus points out that razing..., 2003-11-18 13:45:03 | Main | international trade patterns in torture..., 2003-11-19 14:18:06

    china: another japan?:

    the great deal of unintelligible flap in the cable news about China and the trade deficit reminds me somewhat of growing up amid rather hostile popular feeling towards Japan during the 80s. I remember it being a big issue at the time, anyway. None of what I read or hear about it actually makes any sense whatsoever. If I were to imagine what was going on I would guess the following:

    US businesses are exporting American jobs to China because of the cheap labor (or rather, US businesses are moving jobs already exported to cheaper labor markets in, say, Mexico, to China, because of cheaper labour); China exports more Chinese-made US-owned goods into American markets at a reduced price than China buys US-produced goods, which makes it appear that there is a trade deficit; US businesses make a killing off the backs of the Chinese worker, and in the meantime products - like say, apparel made in third world sweat shops - still cost the American consumer a small fortune, though you can save a few bucks on off-brand electronics. The Chinese get lousy jobs and an "emerging middle class" of slightly less poorly paid technocrats, Americans lose good jobs for a few pennies less for consumer goods, and the business class and middle men make up the difference.

    I haven't found any figures on the amount of US investment in Chinese production to compare to the trade deficit figures, and I'm assuming, out of due respect for the usual illogic of such enterprises, that the deficit figures only represent the movement of exportable goods and exclude US profits flowing in from investment. If China's boom stems from "foreign investment" who, exactly, is making good on the investment - since it's obviously not the Chinese worker and Chinese owners don't fit the description of "foreign". Thusly I may logically assume on possible false premises that there is a massive profit deficit in the opposite direction of said trade deficit, and that the overall incoherence of the news talkies on the subject is related to the fact that pointing out that their advertisers are reaping widespread upsurges in profits - as one reads in the business press - from slave labor in China and increasing consumer debt in America precludes the clarity that would indicate how much of this flap is purely objectionable fluff.


:: posted by buermann @ 2003-11-18 15:59:04 CST | link





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