Quote of the Day: China Is Not the Enemy
"China is not the enemy. It is just another part of the manufacturing cycle, similar to what the U.S. was to Europe in the 19th century, Japan was to the U.S. in the 20th century, and Malaysia, Vietnam, and other countries are to China today. And so it goes. European manufacturing did not collapse when the young U.S. developed its manufacturing base -- and U.S. manufacturing is not going away either."
~Mark Symonds, "Don’t Fear Chinese Manufacturing. Embrace It."
11 Comments:
A fascinating period lies ahead. The scale of the Chinese manufacturing platform is unprecedented.
Yet, as a mercantilist-fascist nation, with a supportive central bank, they appear to be obtaining rapidly rising incomes.
At some point, China's platform becomes too expensive for many goods.
But given India's deep corruption and regulation, there appears to be no platform to take China's place.
This augurs well for Thailand (where Japan has asked the Thai government to develop 750,000 skilled workers in next 10 years), and probably for the USA (we are lower cost now than Japan and Europe).
A favorable dollar exchange rate for US exporters could put us right back int he catbird seat in 10 years, if we develop the USA exporting manufacturing base and infrastructure (they are in Thailand).
In short, Bernanke, please print more money.
OT but maybe good for Perry: NJ liquor distributors try to kill off in-state wineries.
http://blog.nj.com/njv_guest_blog/2011/07/nj_liquor_lobby_working_to_shu.html
The more I think about it, the more I think a Constitutional amendment regarding commercial rights is needed. "State's rights" is often a front for smelly corrupt crony capitalism, and most cities and states are happy to limit competition too, on behalf of existing businesses.
At time, many states tried to limit my right to vote or marry who I wanted. The feds stepped in and have stopped that (set aside the gay issue).
But states and cities can still seize my land, stop me from driving a jitney, practising law etc.
The feds are powerless to help.
China has 1.3 billion people. Equal to 10 Japans or 4 USAs pursuing the mercantilist economic model at the same time.
In 3 years their real economy (ppp) will be equal to the USA.
Now think through what will happen when their domestic demand grows to where the mercantile model no longer is in their best interests.
A strong yuan, yuan as a world reserve currency, exported inflation via commodity prices. It may happen so quickly that we will not know what hit us.
In 10 years China's real economy will be 2X that of the USA both in terms of PPP and currency translation.
I am extremely worried.
Reason-
Why? Seems like huge opp. for USA. Sell to the Chinese everything we farm or make.
This comment has been removed by the author.
"You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels." --Network
"In 10 years China's real economy will be 2X that of the USA both in terms of PPP and currency translation."
and they will have the per capita GDP of mexico.
i am not worried.
they are a workshop producing, for the most part, low value add products.
let them.
that's great for us.
but they will never vault up into wealthy nations until they can become an information economy, something that is totally incompatible with their current political system.
foxcom reports big revenues from assembling iphones, but all the profit is made elsewhere.
KipEsquire, what are 'gay' rights? Are there 'gay' wrongs too?
Just asking...
Unfortunately the evidence is to the contrary - whether it is with China, Vietnam, or the various other despotic countries that court "fellow traveller" multinationals.
Letting those despotic countries continue is a slap in the face to the US and for what it stands to represent. The only accomplishment is that entry points into various industries have been removed.
The only place for China, Vietnam, and the like is to be considered as terrorists. They only give freedom to the businesses, and not the people that work for them.
I'm saying the mercantile model worked well - was a win win - when the exporter/lender was small relative to the importers/borrowers. China is just too big to continue to play this game with its artificially low currency. It is too disruptive. The real economy here cannot grow fast enough to offset the economic destruction of massive out sourcing without creating artificial bubbles - finance, housing, etc. It is encouraging massive disequilibriums.
Take away the federal deficit/mercantile lent financing and its multiplier effect and the real economy would be running at less than 85% of the current GDP. Not a pretty picture.
China needs to revalue soon or they will bankrupt their customers more than they have already.
Evidently, the U.S. will never respond appropriately to mercantilist East Asian economies, which demand the transfer of American technology and jobs, while tantalizing American executives with visions of access to their vast pools of consumers.
Post a Comment
<< Home