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Why does the US need China?
- Thread starter faure
- Start date
Just imagine what would've happend to the inflation in the U.S. without an inundation of Chinese goods.
Quote from faure:
I just don't get it. China exports cheap products and to a large extent the US is the recepient of these goods. Yet China doesn't have a free floating currency and it essentially manipulates it to ensure a weaker yuan and more money from exports.
Meanwhile the US soaks up the "artificially cheap" products to the detriment of it's local producers and local jobs. If the US were to say no thank you to Chinese imports, at some degree, I see it hurting the Chinese a lot and might end up being benifical to the US economy and eventually the deficit.
My question is, given all of this, why doesn't the US have China under it's thumb?
Educate yourself! That's my best suggestion.
Not to be offensive, but let's say you were German or French or anything but (normalized) American, and were proud of your country and heritage. Then felt that your family had outsized intelligence over the comman man and hence were wealthy because of that advantage. Now say that your family business opened a new advertising glitch and reaped over 100,000 new sales in your region and the surrounding county, and your factories or supply lines were booked at 2 shifts for the next 4 months. IOW, you were sitting on unrealized 125% annualized profits for each of the next 4 months.
Now, consider China!
They have the same land mass as the United States, although we can't use much of Alaska and other regions thought inhospitable. They have over 8 times our populace and their level of poverty doesn't even have a click on the scale below zero.
Now realize 2 billion persons, of which over 750 million are now earning average global wages and spendable currency pegged to the US Dollar being able to purchase goods and services.
What would your meager company be worth now?, and you were giddy with the initial scenario of 4 months 2 shift production.
Who needs China? Everyone! Everywhere!
and thats true for all low-value-added type products... now if i look at my personal consumption all in, i'd say the share of those type of products / services is rather low, in $ terms less than 10-20%... as for other more elaborate products & services i am using, the made-in-china $ component is probably no more than 10-20% again on average, of the total end user price... these products & services are usually designed / bundled etc from outside of china, in higher income parts of the world... even if the 90+% of resulting profits are routinely parked in offshore entities so as to 'optimize' taxation... but not to worry, this money is then again utilized in a similar manner as above, although not much of it prob ever returns to high-tax / GST / VAT etc jurisdictions... and why shld it? loads of fun to be had in plenty low tax jurisdictions around the globe... watcha guys think?Quote from rufus_4000:
I was in Vegas a while ago, and want to pick up a snow globe in the airport, it was made in China, but why should I care if it is made in China, Malaysia, Japan, Iowa, or Wisconsin? I only care if it is decently made, heck, it is $9 (you can't go wrong with $9).
more concretely, a dentist mate of mine from europe is asking me to help him 'optimize' his tax bill in the following manner... he buys supplies from china, c.$1-200K/p.a shenzhen price, via my HK & BVI entities (no details, sorry), whereby i charge him $3-600K and legally pay no or close to no taxes (depending... but again no details, sorry), and pay him back 95+% of the profits on his personal offshore accts... i suppose u can all see what this does to his taxable income... anyway, just food for thought...
free trade is much better overall for both economies. High tariffs etc discourage trade, cut into wholesaler and retailer pockets, and all consumers as a result. that to some degree weakens economies.
I live in a small country with MASSIVE import tariffs. Cars up to 80%, many goods 30-50%...as a result, the economy is weak and the government debt is junk.
Many people dont open businesses here becuse they cant afford the inventory and the consumers cant afford the purchase. less jobs, less money, less opportunity as a result.
China is their own country. they have their own advantages and disadvantages like anywhere else. Idont believe in the bush doctrine of trying to control other countries...long term it doesnt work.
I live in a small country with MASSIVE import tariffs. Cars up to 80%, many goods 30-50%...as a result, the economy is weak and the government debt is junk.
Many people dont open businesses here becuse they cant afford the inventory and the consumers cant afford the purchase. less jobs, less money, less opportunity as a result.
China is their own country. they have their own advantages and disadvantages like anywhere else. Idont believe in the bush doctrine of trying to control other countries...long term it doesnt work.