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Economic Talks with China Not Likely to Accomplish Much, The idea behind admitting China into the WTO was that it would expand trade based on comparative advantage—both China and the United States would grow exports of what they do most efficiently. That simply has not happened.
China systematically undervalues its currency to boost exports of low wage products and products it should be importing. Hence, its exports exceed imports with the United States more than four to one, and it enjoys a $268 billion annual trade surplus with the United States.
The huge trade deficit with China pulls down demand for U.S. goods and services—in particular manufactured products—much more than the lift provided by the stimulus package, because it is permanent and encourages U.S. manufacturers to relocate to China or shutdown completely. Yet the president has boxed in U.S. negotiators with idealistic and ideological stances on trade and the environment.
China maintains its huge currency advantage by systematically buying dollars with yuan—increasing its hoard of U.S. Treasuries in the process—instead of letting market forces determine its value, which would be much higher than its current pegged rate.
Consumers have been reluctant to pull out their wallets. According to figures from the government, consumer spending was flat in April and up just 0.3% in May -- despite the fact that personal income rose 0.7% and 1.4% respectively during those months.
At the same time, people are squirreling away cash. The personal savings rate rose to 6.9% in May, its highest level in 15 years.
Originally posted by SLAYER69
China buys our T-Bills we use that money to stimulate our economy then as it rebounds we pay it back. 800 billion or even 1.2 Trillion is not that huge when you consider that when the US economy is humming along we generate over 14 Trillion in business a year. That puts it back into perspective.
If China turns the corner to a consumer nation in the next 30 years that will be a market for American goods. All signs point to that happening way before 30 years more like 2 or 3. Big money selling the Chinese our products. Contrary to POP culture Fear mongering and gloom and Doom the USD is still the big dog.
Originally posted by marg6043
reply to post by SLAYER69
It only proves one thing, no body tells China what to do and how to do it.
Because of Wal-Mart's size and scale, Scott's pledge rippled across a vast swath of China's manufacturing sector. The company buys some $9 billion worth of goods every year from some 20,000 vendors.
The scope of Wal-Mart's green goals is also without parallel. The mandate requires Chinese factories to track great volumes of data on energy use and to make it available for audits. Wal-Mart's top 200 factories have to become 20% more energy-efficient by 2012. "Many Western companies can't track their own energy consumption," says Andrew Winston, consultant and author of the book Green to Gold, who attended the meeting. "Getting Chinese companies to track these kinds of operations data takes [Wal-Mart] many steps forward."
On cap and trade, limiting U.S. CO2 emissions would do little to solve the global warming problem if CO2 emitting are not similarly limited in China. Yet, China refuses to match the legislation President Obama is pushing through Congress.
Cap and trade, should it pass the Senate, will finish the job China’s currency intervention began—decimating U.S. manufacturing and a good deal of the American middle class.
Originally posted by Rigel Kent
Most consumer goods in China are counterfiet and that is what makes them affordable to the general public. Why would they want to buy American goods at (as they see) vastly inflated prices?
World’s largest manufacturer
Filed under: Miscellaneous, Politics
What country is the world’s largest manufacturer by a huge margin? If you have a kid, you would think it must be China — I don’t know the last time I saw I toy (or anything else, really) that wasn’t made there.
Accounting for more than 20% of the world’s total manufacturing output is the United States.
Japan is a distant second at just over 13%. Then China (12%), and Germany (8.2%). Then, well, everyone else. (Data come from the Dept. of Labor and the United Nations.)