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The China Syndrome – A Meltdown in American Employment

On Jan 19, 2011,  Stan wrote:

A strange statement from [a writer I just read]:  “China needs to bring more jobs to the United States…….” ….Who ???   And this is even stranger ? “Until China figures out a way to link itself to the idea of job creation . . . you are always going to have a negative perception of China in the United States,” said Drew Thompson, director of the Nixon Center’s China Studies Program in Washington. “

Go figure….. how did Drew get his job in the first place ????

Anyone in the U.S. leadership circle really knows about China ???  guess not………

My response:

Good questions, Stan. It’s pathetic when someone in his position is thinking that the problem is CHINA not creating jobs in the U.S. and that someone owes us that help when the problem is clearly us sending all our jobs over to China. How could China even possibly create jobs in the U.S.? Does the man have no understanding of economics? What could China manufacture over here cheaper than they can over there? Does he think that we sent millions of our jobs over to China to help China out? Even the U.S. was not trying to create jobs to help China. Nobody creates jobs in another country just to stimulate some good will.

I think you should apply for his position. You understand both China and economics better.

Apparently, we have now made ourselves so dependent upon cheap Chinese labor and the Chinese consumer market, that now we are reduced in his eyes to holding out our hands to China for alms!

The answers are simple to helping right the problem a little:

  • To the extent that you see China subsidizing the manufacture of goods in their country, place tariffs on their goods. Free trade should only exist where free-trade partners are willing to play on an even playing field. (Of course, it may be very difficult in many cases to measure those subsidies, but to the extent that you do know of them, balance them with matching tariffs on a sliding scale that moves with your knowledge of their subsidies.)
  • To the extent that you can clearly demonstrate China is artificially pegging its currency at a certain point, add matching tariffs to your sliding scale on all their products. (Politicians and economists talk as if they know China is artificially lowering their currency value; so, if such things are clearly demonstrable, don’t even waste time talking with them about it. Peg your tariff to their currency! All they ever have done is talk about this with vague and empty threats to China. Geitner “complains,” but so what? Neither he nor anyone else in our government are willing to do a thing about it, except whine a little for the sake of their public images.
  • Any company doing business in the United States, should be tried in a U.S. court, not a Chinese court, if there is a claim that it is not respecting intellectual property rights. If the company does not cooperate with the court or the U.S. court finds that the Chinese company is, in fact, not respecting U.S. intellectual property rights, it should be banned from all business in the U.S. until such time as the court decides it has made good on any gains that should have gone to a U.S. company or individual and found that the company is now in full compliance with respecting such rights in so far as any claims brought against it.
  • Any Chinese company SELLING products made by other Chinese companies that are found to be pirated ideas must immediately stop selling that product until the above corrections have been made to the satisfaction of a U.S. court, or immediately be banned from ALL selling in the U.S. (I.e., we need to stop depending on Chinese courts to try such cases.

“While China’s economic growth has benefited U.S. companies and shareholders, most Americans still view the country warily.”

Of course they do and MUST because the only ones who have benefited from China’s economic growth are companies and individuals who have the excess income to invest in companies that do business in China….

I’m not sure I favor the old tariffs that are built on protection against cheap labor, but I certainly favor tariffs that offset government subsidies, and I have no problem with other nations putting tariffs against our companies to the extent they are subsidized by government grants, etc., too. That, too, is fair trade.

And this statement:

“You Americans always think I’m here just to steal your technology,” said Zheng Yongzhi, the deputy general manager of an air compressor manufacturer who was in the United States recently looking for investment opportunities.

That’s because so often his countrymen ARE.

–David

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