Friday, January 25, 2008

Globalization is Good for Michigan, Good for U.S.

Political rhetoric: According to Governor Jennifer Granholm, "No state has been ravaged more than Michigan by unfair trade policies."

Economic reality: China's demand for Michigan vehicles and auto parts has exploded and has grown by a factor of 10X since 2001 (see chart above), and demand has also increased for other Michigan exports to China like inorganic chemicals, machinery, medical instruments and soap.

Source: The Mackinac Center for Public Policy's report "Globalization is Good for Michigan" by James Hohman.

Bottom Line: Exports and imports are two sides of the same coin of international trade. In other words, trade works both ways, and increased imports of products FROM China = increased exports of U.S. products TO China.

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