Every wanted to see a Chinese production facility?



So Ed, I keep hearing all the blame go to places like China. Our Trade Deficit with them is growing at a fast clip. But the reality is that China itself does not have any real total trade surplus to speak of. They import as much as they export. This tells me that they are buying goods, just not from the USA. Are we not producing the goods that China wants or needs competitively? Obviously so. So this places the onus on ourselves. How do we overcome that?
I think these are the real questions we need to ask ourselves. Placing blame on China's currency valuation is a farce. I know you are still looking for that "other" system to base trade on, but in the meantime, we have to look inward to solve our problems. Not place blame.
What does China do with the foreign reserves they get? They buy US Treasuries, our debt. They are currently the second largest buyer of our debt in the world today. without their purchases, interest rates would rise like crazy and the dollars value would sink. They didnt create the debt, we did. GWB's finger pointing to Japan and China for manipulating currency is a joke. Historically we have done the same numerous times. China merely ties their currency, while Japan actually moves mountains to balance theirs (8-10 billion per month of dollar/treasury buying).
ed, what do you think we should be focusing on? what moves do you think we should make in the USA?
BG

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On 14 Oct 2003 18:55:54 -0700, snipped-for-privacy@optonline.net (bg) wrote:

Our current national debt is $6,8 trillion dollars, 68% of our GDP. Your share is $23,359.45. When can we expect a check?
Gary
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(bg) wrote:

I send my check in every year. The morons we elect dont know what to do with it. It goes to Turkey for loans, foreign aid, military bases that havent had purpose for 50 years, etc. Never a cut in expenses. So, the debt grows.

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--------------080402050104060200030308 Content-Type: text/plain; charset=us-ascii; format=flowed Content-Transfer-Encoding: 7bit
I like your point, BG
Yes, China can and will kick our arse via low wages, currency manipulations, etc. but we also need to look at the items HERE that are killing business HERE. Control the things we can now and then move onto the things that require "diplomacy" to repair.
Currently, I am being driven nuts by the state's tax systems (because of sales in multiple states...and having to go inspet stuff within that state). California is the worst because it actively pursues you for having sold something there. Other states will probably follow their lead because of high deficits.
For example, if I send a crew to CA for a day or two of repair on a machine I built, I am supposed to pay California workman's comp on them, California Income tax for them, I have to file all the California paperwork to do this, and I have California "apportion" my sales to collect california income tax on my business proceeds. All for a day or two of work that may be my only job there this year. Texas is similar with their franchise tax which is sticking it to some very large businesses like Conagra.
It's like dealing with 50 different countries in many ways. Many of the other people in this business have moved production to Mexico, eliminated ALL travel and connections that give a nexus in other states, and almost act like an internet sales company. No service...no equiment inspection to see what's really going on, etc. Eliminate the tax collectio hassles by eliminating part of your business.
Surely this is one area that hinders our ability to do cost effective business. Yes, importers have the same problems but it is far easier to float the costs when you are simply marking up someone elses goods. Also importers tend to be more "retail" oriented which is a business structure that lends itself to being like "50 business' in 50 countries".
Anyway, this is just one area where we screw ourselves in terms of business realtive to imports. Name some others please.
Koz bg wrote:
</pre> <blockquote type="cite"> <pre wrap="">Carl Byrns writes:
</pre> <blockquote type="cite"> <pre wrap="">If the labor rate in China really is 80 cents an hour, then it's game over, the Chinese are the winners, and the rest of us better get comfortable with being farmers because we will be the new peasants. </pre> </blockquote> <pre wrap="">By that logic, if they gave us all their labor for free, we would be even worse off.
Do you curse the sun for flooding us with cheap, imported light? </pre> </blockquote> <pre wrap="">It's true that cheap imports can be a benefit, but that assumes our economy can grow fast enough to replace a lot of well-paying jobs lost to imports. When the trade deficit gets as large as it is today ($418 billion deficit, goods and services total; goods alone are around $460 billion deficit), it probably can't. The job-growth rate and average new-job wages would have to reach heights we've never seen, and which there is no indication we ever will. </pre> </blockquote> <pre wrap=""><!----> So Ed, I keep hearing all the blame go to places like China. Our Trade Deficit with them is growing at a fast clip. But the reality is that China itself does not have any real total trade surplus to speak of. They import as much as they export. This tells me that they are buying goods, just not from the USA. Are we not producing the goods that China wants or needs competitively? Obviously so. So this places the onus on ourselves. How do we overcome that?
I think these are the real questions we need to ask ourselves. Placing blame on China's currency valuation is a farce. I know you are still looking for that "other" system to base trade on, but in the meantime, we have to look inward to solve our problems. Not place blame.
What does China do with the foreign reserves they get? They buy US Treasuries, our debt. They are currently the second largest buyer of our debt in the world today. without their purchases, interest rates would rise like crazy and the dollars value would sink. They didnt create the debt, we did. GWB's finger pointing to Japan and China for manipulating currency is a joke. Historically we have done the same numerous times. China merely ties their currency, while Japan actually moves mountains to balance theirs (8-10 billion per month of dollar/treasury buying).
ed, what do you think we should be focusing on? what moves do you think we should make in the USA?
BG </pre> <blockquote type="cite"> <pre wrap="">Ed Huntress </pre> </blockquote> </blockquote> <br> </body> </html>
--------------080402050104060200030308--
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==============================Currently, I am being driven nuts by the state's tax systems (because of sales in multiple states...and having to go inspet stuff within that state). ============================= So is every businessman in every country of the world. It's not a competitive issue.
==============================Anyway, this is just one area where we screw ourselves in terms of business realtive to imports. Name some others please. =============================No, we have one of the lowest overall tax rates in the developed (and most of the developing) world. China's tax rates, for example are about the same as ours.
So it's not a competitive issue. Try again. <g>
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economy
imports.
deficit,
it
to
China runs a positive trade balance, overall, of around US$30 billion (2002). Their positive trade balance with the US in 2002 was US$103 billion. Obviously, the US is their great sink-hole for manufactured products. In the rest of the world, they run a $73 billion *deficit*.
Your "obviously so" is not so obvious. China runs into trade barriers and various quid-pro-quo requirements with most of their trading partners -- except for the US, of course, which hardly restricts their imports at all.
How to overcome it? I've grown skeptical of the ability to liberalize trade through the WTO. The WTO is an organization of roughly 170 countries that collectively sinks $418 billion of their exports into the US. They really want to keep the status quo, at least with the US.
As I said, I'm floating the idea of offsets. I like the idea more all the time. It seems to me that they're the best way to end the big arguments. Did you see what Geoff just wrote about our "barriers" to NZ trade? That's from a little country that runs a $468 million *positive* trade balance with the US. How do you deal with countries that keep wanting more, and blaming us for "protectionism," when they already enjoy a positive trade balance with us of $468 million? You impose a balance of trade -- offsets. That ends all arguments. I like it.

Yeah, that, plus they're sitting on a small mountain of foreign reserves as cash deposits in their (government owned) banks.
But you're getting into current-account/capital-account issues that are over the head of anything we can reasonably discuss here in the newsgroup. It's enough to say, I think, that no country in the world wants to see the US dollar drop much in value. We can make small adjustments, but a big one could easily bring on a world-wide depression. Nothing much is likely to happen in that area. So it's an issue for the specialists.

Elect me, and we'll have 100% trade offsets. Well, maybe 70%. <g>
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Vote for ED! And git them 1942 Brownies running 24/7 ;)
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That's right, I almost forgot. We need a museum, too. d8-)
Ed Huntress
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Ed Huntress writes:

I will vote for any r.c.m poster before any common politician. Despite your nutty notions of trade.
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your
I think you've just suggested a foolish thing, and then illustrated why you would act so foolishly. <g>
Ed Huntress
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They expect that surplus to shrink to virtually nothing in 2003 and for a small deficit in 2004. I truly believe there is no problem with us buying. I believe our problem is that we do not sell anything. The obvious I was stating was that someone is selling to China, but it is not the USA. it is also obvious on frequent visits to China that they prefer Euro and Asian goods over most USA goods. Our deficiency in marketing mfg products to export markets doesnt help.

Actually, they run into trade barriers to the USA market often as well. See what they have to go through to sell peanuts in the USA. Or duties for steel. Or Apples and apple juice. Everyone has their own line of defense for given industries to protect. However, ours are limited and the Euros, Koreans, and Japanese give them the hardest time.

I agree. WTO cant really do a totally effective job.

I'm not sure your idea is foolproof, but then we already know nothing is. For example, we buy Cobalt from certain african nations. Those nations cannot afford to buy a reciprocal amount of goods from the USA. But we need more and more Cobalt every day. Further another issue is MFG goods. You cant force nations to purchase mfg goods in any market if there is no buyer. Raw materials, food energy are different classes. I will think about your idea further. it doesnt sound bad if the logistical details can be worked out.

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billion.
the
Who's "they"? Our trade balance with China through August of 2002 was $63 billion. Through August of 2003 it's $77 billion. On an annualized basis, that will increase our trade deficit with China from $103 billion in '02 to $123 billion in '03.
It's headed the opposite way.

Haha! Yeah, you could say that, Yogi. <g>

So, who's selling to them, and what are they selling? You can look it up.

Examples?
Now you're closing in on what Mickey Kantor (former U.S. Trade Representative) said about it. He said there is no such thing as free trade.
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Thats only the trade balance with the USA. but if China wasnt playing fair, why do they not have such surpluses with the rest of the world?

:)
I dont need to, though it is not really difficult to do. They are selling telecommunications equipment, machine tools, manufacturing production lines, power generation equipment, assembly line equipment, quality control equipment, etc. I see it myself. I ask them numerous times in numerous facilities, "why dont you buy american goods?" their reply is usually one of two major reasons:
The price or quality. This leads one to believe that we are not doing a good job. I have always known we havent. In 1990 i visited the leipzig fair right after the wall came down during the elections. Not one American company was exhibiting. I called on the doc in washington upon my return and asked a man, "what do you do there? we had no representation at all, while the rest of the world did.". He replied that we are improving and trying to do a better job. I nearly laughed at him (only 27 at the time and too embarrassed to do so).

Anything and everything I mentioned above and plenty more. Go to any factory producing machine tools or metalworking equipment and you will find all Euro and Japanese Production equipment.
Go to any stone manufacturing facility and you will find only Italian machinery.
Almost never American mfg products.
SO if this given is true, and judging from their trade numbers it is, why are we in the USA having such a problem, while the rest of the world is exporting to China? I think we need to analyze this question and the answers should lead us to a more productive outlook on whose problem this trade deficit really is. Because blaming China for a yuan valuation that is 10 years old certainly is not the answer. It is far off the mark and from any logical economists view, nearly embarrassing to broach.(though our administration has no problem in broaching the embarrassing - It is almost comical that someone from the Bush admin would direct China on how to run their economy)

To date, that is correct. There are very few completely open economies, if any. some Island nations that need to import most everything are probably the closest to true free trade out of necessity.
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up.
This needs some more work before I'd buy into it, bg. Germany's exports to China, for example, are just slightly more than half of the US's exports to China.
Ed Huntress
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Look up the numbers Ed. China overall is not doing that badly when you look at the worldwide perspective. This means we are not doing a good job. (we never have). According to Eurostat:from jan to April 2003 EU15 increased exports to China 22% over same period 2002 They increased imports by 15% in the same
Total trade imbalance during this period was -16.8 billion euros - a trifle considering the size of the EU15 and the key is that it is going down.
The Eurozone has similar numbers
The EU 15 has a trade imbalance with the USA of +20.4 billion Euros and growing.
What this tells me is that we dont do a good job anywhere. My eyes dont deceive me. If you've been to china, count how many times you saw American capital equipment in factories. I almost never do. I think you can go online now and look at the bids that China puts out publicly for capital machinery. The machines spec'd are almost always Japanese or european.
Look at it this way: How far did blaming the japanese in the 1970's take us? It took us absolutely nowhere. We adapted to different styles of management and investment to overcome our own problems. we learned from the Japanese. It was the best thing that ever happened to us. Otherwise we might today be looking at the big three owned by Japanese instead of two American co's and one German.(we lost one, didnt we?). We need to do the same today. This is what we made of it. It was no one elses fault. Our own automation and technological advances have increased productivity to the point of losing jobs bigtime. This also has to be factored in. Darwin was right about everything. we need to adapt.

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it
to
to
Chasing down statistics for an online discussion gets real tedious real fast, bg, and you aren't encouraging me to spend my time on it. First you say "They expect that surplus to shrink to virtually nothing in 2003 and for a small deficit in 2004." In fact, China's trade balance is up 40% this year from Jan-Aug, compared to Jan-Aug last year. Their positive balance actually is accelerating. Japan is having a fit about it. The EU is alarmed, and, according to one report, "embarrassed."
You say that they "prefer" Japanese and German production equipment. Of course they do. We hardly make any. The Japanese cleaned out our machine tool business in the 1980s. According to AMT, there are only 70 companies in the US now that could be considered machine-tool manufacturers, and most of them make custom equipment. When it comes to big-time production equipment, we're almost out of the business.
I reported on the way they were doing it in the late '70s. In the very early '80s, I worked for Japan's Ministry of International Trade and Industry, and I saw how they did it. And then, a couple of years later, I was marketing manager for a Japanese machine tool company, and I watched it being done. While David Halberstam was writing his book about Japan's ascendance, _The Reckoning_, a top executive from Toyota took him aside and said, "There's one thing we don't understand. Why don't you protect yourselves?"
Meantime, Germany and Japan protected their machine tool and automobile markets to beat hell, with both tariff and non-tariff barriers (Germany limited Japanese car importers to 10% of their market, with strict quota enforcement). Look at who is exporting those things now, eh? Can you say, "protectionism isn't necessarily bad"? I've learned to say it.
Regarding "improving" our manufacturing, the profit in it is going to hell because the Chinese and other low-wage countries are moving into one market after another, with no governmental resistance from us and no possibility of competing with their prices. We now have the most productive and efficient manufacturing in the world and barely enough profit to keep much of it alive. What irony, eh?
The basic premise of your first message seemed to be that the EU has a beneficial balance of trade with China, while we have a horrible one. In fact, the EU is going to run over US$60 billion in the hole with China this year and they're climbing out of their skins over it. Watch for some kind of barriers to appear, somewhere. They've done it before, when the Japanese put their industry under a lot of pressure. They don't stand for that kind of pressure.
BTW, it's Japan and the other Asian countries that are the big exporters to China, not the EU. The entire EU taken together represented only 13.1% of China's imports last year. China's US imports were 8.8% of the total.
That's the end of my chasing statistics for this thread. It's too much work just to straighten out issues in this context. You can't really discuss these things intelligently or accurately without it, but, for that kind of work, I like to get paid. <g>
Ed Huntress
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Sorry Ed, but the petty cash box is empty. We have had to cut back on expenses you know.
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Ed
Your message, and several others' as well, suddenly showed up as a month old, although they are still in order in the thread. I am told that the content is no longer available.
Was this some wider thing, or only my ISP? **************************************************** sorry remove ns from my header address to reply via email
Imagine a _world_ where Nature's lights are obscured by man's. There would be nowhere to go. Or wait a while. Then you won't have to imagine.
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Hmm. I haven't heard anything else about it, so I don't know. There were a lot of messages in that thread so I don't know what it refers to, either. Sorry.
Ed Huntress
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On Sun, 30 Nov 2003 12:08:35 GMT, "Ed Huntress"
......and in reply I say!:
Thanks Ed. Your reply (to which I am now replying <G>) is on the correct date again. Strange.

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