In a recent piece published on the MSNBC website, http://www.msnbc.msn.com/id/45614308/ns/business-world_business/#.Tua1aXJSn6A, the journalists insinuate that developing a working partnership with China cannot work. Their presentation of the arguments, however, are very one-sided (surprise, surprise). Below is what they fail to mention:
“But Made in China has hastened the decline of U.S. manufacturing. Factory jobs have shrunk in number by 25 percent the past decade to 11.5 million today, and average factory wages adjusted for inflation have virtually stagnated.” No, factory jobs have been declining everywhere in the world, including China, because technology advancement is replacing humans in virtually every sector where repetitive activity exists. Average factory wages may have stagnated, but so have wages in most sectors in the U.S., even if they’re not outsourced.
“Chinese imports meanwhile have ballooned the U.S.-Sino trade deficit to $273 billion, four times that with any other country.” The trade deficit is a meaningless number because it merely records the amount of goods that cross national borders, not who owns the goods and ultimately profits from it. The vast majority of goods imported from China, which causes the trade deficit, belong to U.S. companies who have made record profits from these imports. Just look at their financial statements.
“The reconsideration of China is taking place while the United States struggles with an economic slump that has brought high unemployment and doubts about the country’s long-term fiscal health. It is also taking place in an election year, and while China is a regular target in presidential campaigns, even Mitt Romney, with the strongest corporate credentials of all the Republican candidates, has made a point of criticizing China.” The economic slump caused by Wall Street is now China’s fault? Sounds more like scapegoating than criticizing.
“There’s competition between the American economic model and the more state-centered economic model of China and other countries,” said Robert Hormats, U.S. Undersecretary of State for economic affairs in an interview last month.” The American economic model continues to put financial speculation in the driver’s seat. It is understandably not a model that other countries like China, Germany, and others want to follow. Hormats, coincidentally, also used to work for Goldman Sachs right before he was appointed to his current position under the Obama administration.
“We have a challenge in dealing with China,” said Hormats, one of the Obama administration’s top economic diplomats. “On one hand, the global system won’t work well if we and China can’t cooperate and productively resolve our differences. On the other hand, we have real differences, many of which are awfully difficult to resolve.” Maybe the U.S. needs more talented negotiators.
“The U.S. Chamber of Commerce said in a joint report with the Coalition of Services Industries that China and other countries lavish regulatory favors and generous subsidies on their state-owned firms, making it very difficult to compete.” As if large U.S. multinationals don’t play the same game hiring lobbyists on K street. Puhleez.