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Rockntractor
08-18-2012, 09:16 PM
By Stephen Mauzy

No country raises more suspicion in America than China. For one, it's big and it's far away; size and distance arouse suspicion, because size and distance stimulate our imagination to run amok. Citizens in big, faraway lands inflate into superior beings -- people with more discipline, stronger work ethic, and higher intelligence. This, in turn, deflates our own self-confidence.

Suspicion is prevalent on both sides of the political aisle. The left sets China as a job-devouring bogey, whose appetite is as voracious as any 800-pound cable-television curiosity. The right laments China's economic ascension, which could topple the United States from its envious (from a political perspective) perch.

Like most fears propagated by political opportunists, the fears are overwrought and overdone; the aggregate numbers the opportunists use to buttress their fear-mongering are so very misleading.

If one were to glance only at the aggregate numbers, one would think there is an injustice afoot. The contemporary trade data, June 2012, show that the United States exported $8.52 billion's worth of sundry goods and service to China, but it imported $35.92 billion. The current ratio of imports to exports is roughly the norm over the past five years. Does that mean that China is exporting goods and services that could be produced in the United States using domestic labor, thus resulting in exported jobs?

It's not that simple. Aggregates scrub data of their individuality, so the "Smiling Curve" goes under-reported and under-appreciated. The Smiling Curve is a U-shaped function that captures a product's life cycle. It's U-shaped because the ends represent the high-value processes. At the right resides a company's brand, product conception, and design and engineering. At the left resides marketing, distribution, retail sales, and service contracts.

Chinese businesses, for the most part, specialize in the sagging middle -- manufacturing and lower-level design engineering. In other words, U.S. businesses specialize in the higher-value processes; Chinese businesses specialize in the lower-value processes. The problem is that when that $1,000 laptop hits the port at Long Beach, it's logged in as a $1,000 import, though much of the work and value is created in the United States.

To be sure, the sagging middle processes China performs guarantee that those same processes aren't performed in the United States. So, to state the obvious, yes, those manufacturing jobs have been outsourced overseas, but they are no longer value-adding jobs. If a task can be performed more efficiently and less expensively elsewhere, then that task should go elsewhere. If it doesn't, then owners and customers suffer, and so eventually does the business.

The good news is that the outsourced jobs create opportunities for new jobs. It appears counter-intuitive, but outsourcing is correlated with increased U.S. employment and investment. On the whole, businesses that outsource are not shifting jobs overseas, but instead are creating jobs in the United States. This makes sense: labor is scarce and finite; different regions of the world have comparative advantages compared to other regions. And even if one region can do everything better than another region, it still makes economic sense for the superior region to concentrate on tasks where it has the greatest comparative advantage and then trade for the rest.

Semantics is important when discussing regions -- in this case, the United States and China. Trade occurs not between countries; the United States does not trade or outsource to China, or vice-versa. Individuals and business within each country trade. An individual in the United States purchases a laptop designed and engineered by workers in the United States and manufactured by workers in China. Transacting and trading occur between individuals, not countries.

Speaking in terms of individuals instead of countries tempers nationalistic zeal. One of the right's more pressing worries with China is its growing stature as an economic power.

The International Monetary Fund predicts that China will surpass the United States as the world's economic power in 2016. Such predictions are mostly fantasy. What does it mean if China's annual gross domestic product exceeds the United States' gross domestic, and China becomes the world's leading "economic power"?

First, terms need to be defined: what's an "economic power"? If it's a country whose citizens are free and able to create value and wealth, that's a good thing. China has 1.3 billion citizens; the United States has 315 million. Shouldn't the more populated country, all else equal, generate more value and wealth in total? And if it does, so what? China ascendency doesn't translate into a United States decline.

"Economic power" is really a misnomer. Power implies force and coercion; value and wealth are created through neither. Power implies a zero-sum game -- like a sporting event, war, or a political contest -- where one side wins and the other side loses. Commerce is much more about cooperation than competition. Most of the day is passed appeasing owners, bosses, and clients. Little of it is spent butting heads directly with the competition.

Read more: http://www.americanthinker.com/2012/08/too_much_ado_about_china.html#ixzz23wzY36nT

Retread
08-18-2012, 11:34 PM
Excellent analysis

Starbuck
08-19-2012, 10:33 AM
No matter how thorough the analysis or how compelling the numerical evidence, the great majority of Americans will continue to believe that 'China is buying up the country'; will 'soon own us'; are 'becoming millionaires', and on and on.

China will be 'developing carrier killer missiles', 'superior aircraft carriers' and 'vast modern cities' right up to the time they utterly collapse. The 'China Bleevers' will continue to believe until their last investment dollar is lost.

Unreconstructed Reb
08-19-2012, 12:35 PM
That analysis left out the most important part, as far as I'm concerned: China is a communist state.

Retread
08-19-2012, 07:38 PM
That analysis left out the most important part, as far as I'm concerned: China is a communist state.

Key word/problem there is that it was communist but is not truly so any more. The PTBs have discovered that a little freedom goes a long way to improving their own pocketbook.
My hope is that the people will keep feeding this until it can't be reversed and the country can experience full freedom.

It will be years if not decades in the making but it is entirely possible.

Unreconstructed Reb
08-20-2012, 06:51 AM
Key word/problem there is that it was communist but is not truly so any more. The PTBs have discovered that a little freedom goes a long way to improving their own pocketbook.
My hope is that the people will keep feeding this until it can't be reversed and the country can experience full freedom.

It will be years if not decades in the making but it is entirely possible.

China is run by a communist regime that doles out the little snippets of freedom at the regimes pleasure. They can reel it in just as easily as they dole it out.

Retread
08-20-2012, 11:23 AM
China is run by a communist regime that doles out the little snippets of freedom at the regimes pleasure. They can reel it in just as easily as they dole it out.


China has never truly been communistic but rather guvmint by fiat of an elitist group (much like the DNC wannabes) and they have evolved over the last few years into a much more permissible outfit who are getting used to the availability of home built Apple products and Buicks. So used to it that they will be very slow to try to reverwse the process. This will be the downfall of the current guvmint, again, years to decades but it will happen.

Talk to Lech Walesa and to the original tea party group in Boston about taking down oppressive guvmints It has been done and will happen again.

But... nowhere near the scared out of their pants scenario that a great many pundits would have you believe.

Unreconstructed Reb
08-20-2012, 11:55 AM
China has never truly been communistic but rather guvmint by fiat of an elitist group (much like the DNC wannabes) and they have evolved over the last few years into a much more permissible outfit who are getting used to the availability of home built Apple products and Buicks. So used to it that they will be very slow to try to reverwse the process. This will be the downfall of the current guvmint, again, years to decades but it will happen.

Talk to Lech Walesa and to the original tea party group in Boston about taking down oppressive guvmints It has been done and will happen again.

But... nowhere near the scared out of their pants scenario that a great many pundits would have you believe.

The People's Republic of China is ruled by the Communist Party of China. The legal power of the Communist Party is guaranteed by the national constitution. The party's official commitment is to communism and Marxism/Leninism. You can try to sugar coat the ChiComms all you want to but the bottom line is that China is a commited communist country run by a central committee communist regime.

I despise communism/socialism/liberalism and any other ism that strips people of their life, liberty and pursuit of happiness.

Retread
08-20-2012, 12:25 PM
The People's Republic of China is ruled by the Communist Party of China. The legal power of the Communist Party is guaranteed by the national constitution. The party's official commitment is to communism and Marxism/Leninism. You can try to sugar coat the ChiComms all you want to but the bottom line is that China is a commited communist country run by a central committee communist regime.

I despise communism/socialism/liberalism and any other ism that strips people of their life, liberty and pursuit of happiness.

Drink the kool-aid of your choice bud, even the stuff that's been on the shelf since 1950 - no skin off my nose but,,,,

1, check out the true definition of communism (http://www.marxists.org/archive/marx/works/1847/11/prin-com.htm) and compare that to the pubically presented view of the Chinese guvmint, It's like trying to tell me a seedless grape was harvested from a pineapple plant.

2. working with Chinese people and conversing with them both in business and pleasure discussions on a daily basis for over a decade as their guvmint became more and more addicted to the fruits of an increasingly free society clearly illustrated the changes past, present and future. The only way the country reverts to it's mid 20th century self is if some totally insane person performs a major coup killing off well over a thousand of the top officials - IMHO it ain't gonna happen.

Unreconstructed Reb
08-21-2012, 12:18 PM
Drink the kool-aid of your choice bud, even the stuff that's been on the shelf since 1950 - no skin off my nose but,,,,

1, check out the true definition of communism (http://www.marxists.org/archive/marx/works/1847/11/prin-com.htm) and compare that to the pubically presented view of the Chinese guvmint, It's like trying to tell me a seedless grape was harvested from a pineapple plant.

2. working with Chinese people and conversing with them both in business and pleasure discussions on a daily basis for over a decade as their guvmint became more and more addicted to the fruits of an increasingly free society clearly illustrated the changes past, present and future. The only way the country reverts to it's mid 20th century self is if some totally insane person performs a major coup killing off well over a thousand of the top officials - IMHO it ain't gonna happen.

It appears that the Kool-Aid of your choice is of the rose colored variety, bud.

1. Check out the communist manefisto and the Chicomms constitution. I'm telling you that the apple doesn't fall far from the tree.

2. I'm sure the Chinese people believe that they are living the capitalist dream, just like some people belive that 0blowme is the messiah, but if the regime (the Chicomm one) ever feels threatened by domestic or world events you can bet your Little Red Book that they'll tighten the yoke of marxism/communism on their citizens.

3. Until the people of China control the government and are able to enjoy their God given, natural liberty they are just chattel for a ruthless marxist/communist regime regardless of the publically presented view.

Q: Like Bill Ayers, 0blowme's pal, are you a communist with a little c?

Retread
08-21-2012, 12:42 PM
It appears that the Kool-Aid of your choice is of the rose colored variety, bud.

1. Check out the communist manefisto and the Chicomms constitution. I'm telling you that the apple doesn't fall far from the tree.

2. I'm sure the Chinese people believe that they are living the capitalist dream, just like some people belive that 0blowme is the messiah, but if the regime (the Chicomm one) ever feels threatened by domestic or world events you can bet your Little Red Book that they'll tighten the yoke of marxism/communism on their citizens.

3. Until the people of China control the government and are able to enjoy their God given, natural liberty they are just chattel for a ruthless marxist/communist regime regardless of the publically presented view.

Q: Like Bill Ayers, 0blowme's pal, are you a communist with a little c?


It would be easy enough to destroy each of the points above but what's the use? You wouldn't read it and you'll continue to pull out the old saw that was true and effective in 1950 but is no longer current or accurate today. I do my best to spread correct information but, just like novatwit, it sails over your buzz cut with no effect. I won't waste my time further.

BTW me? Classical Liberal (no, not the kind you are thinking of. Look it up)

Just file this conversation away so that you MIGHT remember it when my predictions prove true. It will be years if not decades but it will come to pass.

TVDOC
08-21-2012, 01:05 PM
The People's Republic of China is ruled by the Communist Party of China. The legal power of the Communist Party is guaranteed by the national constitution. The party's official commitment is to communism and Marxism/Leninism. You can try to sugar coat the ChiComms all you want to but the bottom line is that China is a commited communist country run by a central committee communist regime.

I despise communism/socialism/liberalism and any other ism that strips people of their life, liberty and pursuit of happiness.

China has four thousand years of historical cycles between "Confucian" and "Legalist" types of government. The Chinese people are conditioned by this vast cultural well of ingrained history to avoid the chaos of a "democratic" form of government. They will never become a true democracy......won't happen.......

Communism is just a temporary venture into the strictest "Legalist" government that China has experienced since the fall of the last dynasty.....these cycles repeat themselves over and over in Chinese history, and they are due for a change again......soon......

As a student of Chinese history, I don't fear China economically......I fear them militarily. They are rapidly building a formitable military capability, and it is only a matter of time before they decide to start annexing territory (starting with Taiwan), then North Korea, and on to some of the Pacific Rim island nations that have abundant natural resources. They need energy (oil), and they are not above conquest to get it......ultimately dragging us kicking and screaming into a war.

It's true that China is no match for the US in the ability to project power militarily, but they are not to be dismissed, and their weapons capability is advancing far more rapidly than ours (using OUR money).......they build some damn fine tactical weapons, particularly anti-ship weapons like the "Silkworm", and their newest fighter aircraft are performing just one generation back from ours, not to mention the fact that we are not a match for them in terms of ground troops, and never will be, what they may lack in talent, training, equipment and dedication, they make up for in sheer numbers . They are also building a "blue water" navy, which will ultimately become a threat.

Any country that embarks on a manned lunar expedition shouldn't be taken lightly technologically.........while we sit on our collective asses, slashing our military (and NASA) budget for social programs.

doc

Retread
08-21-2012, 08:49 PM
Good summation doc - but i do respectfully disagree that they will return to a point similar to that of Mao, Chiang Kai-shek or any of the dynasties. The Chinese folks I know currently living there do feel they are ready for a shift. They think the current ruling class are getting spoiled by the new richness they are enjoying. But, as I said, any real change of any kind will take years.

TVDOC
08-21-2012, 09:14 PM
Good summation doc - but i do respectfully disagree that they will return to a point similar to that of Mao, Chiang Kai-shek or any of the dynasties. The Chinese folks I know currently living there do feel they are ready for a shift. They think the current ruling class are getting spoiled by the new richness they are enjoying. But, as I said, any real change of any kind will take years.

I was referring to the Qing (Manchu) Dynasty (1344 - 1912) which was Confucian.........their next transition will be in that direction. There is no conflict between the emergence of capitalism and Confucian ideology, it would flourish in such an environment, it's more the ingrained mindset of Chinese culture. The relative shortness of the communist era in China is the result of fundamental conflict between Chinese culture and communist dogma. Chinese are not athiest, hence the problem.

I guess the bottom line (for me at least) is that those who think that eventually China will emerge into a western-style capitalistic democracy are deluding themselves, or know nothing about China........ain't gonna happen.......

doc

Retread
08-21-2012, 09:36 PM
With that explanation - I fully agree. Thanks for the clarification.

TVDOC
08-22-2012, 12:55 PM
With that explanation - I fully agree. Thanks for the clarification.

No problem......it's interesting to note that China would more than likely have remained a Confucian (dynastic) government to this day if it were not for outside influence. As I'm certain you know, China was completely isolated until the last few decades of the nineteenth century, then entered the Europeans (with a little help from us later in the form of "gunboat" diplomacy), primarily the "Opium Wars" provoked by the Brits mostly, which degraded the morality of Chinese culture to the extent that it allowed fertile ground for Bolshevik rebels to migrate from surrounding Russian provinces and start stirring up trouble. the communists coalesced into a "movement", and ultimately into the government that exists today.

Sometimes "we have met the enemy, and he is us......."

doc

Retread
08-22-2012, 07:58 PM
Yep - things finally reached a point that even the great wall was no longer effective.