Re: China and the American consumer
In a message dated 7/4/2004 1:13:56 PM Central Standard Time, [EMAIL PROTECTED] writes: The article itself, like those articles about 20 years ago, have a lot ofthe old "yellow peril" theme.The Chinese economy is about as uneven, ragged, stumbling as you can get and still be upright. Agriculture has been decimated-- and there is no contradiction between internal decimation and increased exports, in fact as the same past 20 years have shown, the two go hand in hand. Comment Your comments on China are very considerate and takes into account the configuration of the on going revolutionary process in that country. Those of us in the most imperial of all imperial countries must always be careful and if we error it is better to error on the side of caution. What is called the "Chinese Revolution" is in my opinion, actually the revolutionary process in China. I am prohibited from criticizing the "Chinese Revolution" but can comment on the revolutionary process in China. The modern revolution in China began around 1811 and has gone through extraordinary twists and turns that would baffle any economist or so-called political Marxists. What is not baffling is the current generation of China produced automobiles and vehicles poised to hit the American market with a price range between $9,000 and $15,000. (USA Today June 1, 2004 - Inexpensive Chinese Cars On Way Soon). We are talking not just about foreign investment as an abstraction but the value system and making profits the old bourgeois way or the China connection and material action in the world market. If you are behind the curve of industrial development then you must trade to realize a technological transfer and adhere to the world historic transition from agricultural relations to industrial relations of production - with the property relations within. I'll buy one of these vehicles in 36 months after I pay off the two vehicles the banks and finance companies allow me to drive. I believe you are correct to point out the enormous difference in economic development in the various regions of China. Back when I was still employed with Chrysler and later after its acquisition by Daimler Benz, it was rather simple to keep up with certain events in economic China. Chrysler was one of the first large industrial American companies to go into China building Jeep. Then . . . later . . . with Daimler at the helm I was informed through their excellent quarterly magazine - and I mean excellent, that Guzodong Province, had the largest concentration of Mercedes Benz buyers and owners on earth. Sidenote: It is not generally understood about the role Jergen Schempp played in the freeing of Nelson Mandela and why several years ago DamilerChrysler erected a new public school in the areas of Nelson's birth. Or the special relationship DaimlerChrysler has with the South African government to this very day. The quarterly journal of DaimlerChrysler is really excellent and I tossed them before moving to Texas. (There were always the stories of the smuggle of Mercedes by the PLA - Peoples Liberation Army apparatus and dragging vehicles through the water in large condom like sacks . . . and the backdoor building of Jeeps would be spoken about by the upper echelon of the corporation. Reminds me of a young American Republic stealing British technology). What is complicated about the revolution in China is not the existence of the bourgeois property relations and old fashion bourgeois profits, but the political basis of the so-called Chinese Revolution. China has the oldest existing continuous culture on earth - the third planet from the sun. Intensely proud and patriotic, they have been humiliated for at least 150 years by "foreign barbarians." The communists, to succeed had to take serious account of the national pride and striving of the people of China for independence, in a way not UN-similar to how we should understand the vision of 1776 and why it continues to inspire a vast segment of the American people. The communists in China were ideological communist or people who believed in communism because you cannot build communism on the basis of an agricultural society. Taking into account where they where in history, Chairman Mao summed up his victory in the war for national liberation by simple stating "China has stood up." Now the communist were successful for a combination of reasons and results of the Second World Imperial War . . . but their slogans was for a "New Democracy," redistribution of the land, a guarantee of food for all or food for no one - and most importantly, the rebirth of China. China began industrialization of her could - after 1949, based on the strength of the USSR and this was short lived due to what became called the Sino-Soviet split. Newly independent China could not accept what it considered appeasement with US imperialism by the regime of Nikita
China and the American consumer
NY Times Magazine, July 4, 2004 The Chinese Century By TED C. FISHMAN (clip) The China Savings No politician declares it. There is no Association of Big Box Store Customers beating the drum. But, as nearly any shopping trip in America will teach you, China saves American consumers enormous amounts of money. The worry that Chinese producers are hurting American businesses and eliminating American jobs misrepresents the problem -- at least geographically. While the U.S. trade deficit with China is growing, most of the goods from China, between 60 and 75 percent of them, simply would have been imported in past years from other countries. Still, because the China price forces manufacturers the world over to drop their own prices, the jobs that have not moved have been shaken up all the same, in the U.S. and in other countries. In Mexico, for example, which has lost nearly half a million manufacturing jobs and 500 maquiladora manufacturers, workers earn four times what their Chinese counterparts do. So for Mexican factories to stay competitive, they must get by with fewer hands or smaller profits. Americans who would demonize China also have a local problem: the China price is a boon to American consumers. Gary Hufbauer, a senior fellow at the Institute for International Economics, has done some rough math that shows how. ''From time immemorial,'' Hufbauer says, ''most American and Japanese businesses have been reluctant to move their manufacturing to new locales unless they can save at least 10 to 20 percent with the move.'' For the $152 billion worth of goods coming in from China last year, those savings have already been realized. The multiplier effect on the rest of the world's manufacturers, however, dwarfs the savings that come directly from China. Hufbauer figures some $500 billion in goods come from countries that are China's low-wage competitors, and another $450 billion in goods come from China's American and Japanese competitors. That means savings on nearly a trillion dollars of goods. If the savings on that non-Chinese trillion dollars' worth of trade are just 3 to 5 percent, rather than the 20 percent the Chinese can deliver, Hufbauer calculates further savings starting at $500 for the average American household. And people who spend more, get more back. Have a drawer full of $3 T-shirts, a DVD player in every room, a Christmas tree annually encircled with piles of toys? You probably have tons more stuff -- and additional savings -- thanks to the China price. This inexorable downward pressure on prices now shows up even when the prices of raw materials rise, costs that in the past were hurriedly passed on to consumers. The Chinese industrial boom has, for example, pushed up the cost of copper, aluminum, nickel, plastics and nearly every other important industrial commodity. Chinese demand has caused the price of steel to rise 20 percent this past spring. (China is now the world's top steel producer, by the way, while the U.K. has dropped out of the top 10.) Nevertheless, the price of cars, which reflect nearly the entire commodity index, has been weak. In April, cotton climbed to its highest price at this time of year in seven seasons, but the price of clothing declined. American firms can find it hard to compete. ''China hits domestic U.S. manufacturers twice,'' Oded Shenkar says. ''They drive down the price of goods, but they drive up the price of raw materials. It's a wholly different environment.'' And yet it's a good one for Americans too. The efficiencies forced on the market by Chinese factories also hold U.S. inflation in check. Lower inflation means the Federal Reserve can keep interest rates low, making money more freely available for investment in new and stronger industries. Chinese competition forces American businesses -- Signicast, for example -- to use capital as efficiently as possible. And to run their plants full tilt. And to find ways to save on labor costs. The Americans who lost manufacturing jobs over the last three years, and the millions more who are expected to see their white-collar jobs migrate overseas, may have not only China to blame, but also the very economic benefits that China has provided for them. And that's to say nothing of what happens once the Chinese countryside, thinned of its oversupply of farmers, turns into efficient farms. Already the Chinese have their eyes on cash crops. Though it has only recently begun exporting apple juice, China already produces seven times as many apples as the U.S., enough to cause a depression in the price of apple juice worldwide. Whole apples for exports are individually wrapped by hand in a foam sock. Given the country's wealth of manual labor, it can assert dominance in crops that must be tended by hand. In a stable China, where its great resource, its people, are allowed to work and spend money in a reasonably well functioning market economy, the growing place of China in a global economy cannot be legislated away with
Re: China and the American consumer
A lot of this would be changed if China let the renminbi float (i.e., rise). The predictions at the end seem similar to those made about Japan awhile back (e.g., in Michael Crichton's RISING SUN) before the Japanese miracle popped. jd -Original Message- From: PEN-L list on behalf of Louis Proyect Sent: Sun 7/4/2004 7:21 AM To: [EMAIL PROTECTED] Cc: Subject: [PEN-L] China and the American consumer NY Times Magazine, July 4, 2004 The Chinese Century By TED C. FISHMAN (clip) The China Savings No politician declares it. There is no Association of Big Box Store Customers beating the drum. But, as nearly any shopping trip in America will teach you, China saves American consumers enormous amounts of money. The worry that Chinese producers are hurting American businesses and eliminating American jobs misrepresents the problem -- at least geographically. While the U.S. trade deficit with China is growing, most of the goods from China, between 60 and 75 percent of them, simply would have been imported in past years from other countries. Still, because the China price forces manufacturers the world over to drop their own prices, the jobs that have not moved have been shaken up all the same, in the U.S. and in other countries. In Mexico, for example, which has lost nearly half a million manufacturing jobs and 500 maquiladora manufacturers, workers earn four times what their Chinese counterparts do. So for Mexican factories to stay competitive, they must get by with fewer hands or smaller profits. Americans who would demonize China also have a local problem: the China price is a boon to American consumers. Gary Hufbauer, a senior fellow at the Institute for International Economics, has done some rough math that shows how. ''From time immemorial,'' Hufbauer says, ''most American and Japanese businesses have been reluctant to move their manufacturing to new locales unless they can save at least 10 to 20 percent with the move.'' For the $152 billion worth of goods coming in from China last year, those savings have already been realized. The multiplier effect on the rest of the world's manufacturers, however, dwarfs the savings that come directly from China. Hufbauer figures some $500 billion in goods come from countries that are China's low-wage competitors, and another $450 billion in goods come from China's American and Japanese competitors. That means savings on nearly a trillion dollars of goods. If the savings on that non-Chinese trillion dollars' worth of trade are just 3 to 5 percent, rather than the 20 percent the Chinese can deliver, Hufbauer calculates further savings starting at $500 for the average American household. And people who spend more, get more back. Have a drawer full of $3 T-shirts, a DVD player in every room, a Christmas tree annually encircled with piles of toys? You probably have tons more stuff -- and additional savings -- thanks to the China price. This inexorable downward pressure on prices now shows up even when the prices of raw materials rise, costs that in the past were hurriedly passed on to consumers. The Chinese industrial boom has, for example, pushed up the cost of copper, aluminum, nickel, plastics and nearly every other important industrial commodity. Chinese demand has caused the price of steel to rise 20 percent this past spring. (China is now the world's top steel producer, by the way, while the U.K. has dropped out of the top 10.) Nevertheless, the price of cars, which reflect nearly the entire commodity index, has been weak. In April, cotton climbed to its highest price at this time of year in seven seasons, but the price of clothing declined. American firms can find it hard to compete. ''China hits domestic U.S. manufacturers twice,'' Oded Shenkar says. ''They drive down the price of goods, but they drive up the price of raw materials. It's a wholly different environment.'' And yet it's a good one for Americans too. The efficiencies forced on the market by Chinese factories also hold U.S. inflation in check. Lower inflation means the Federal Reserve can keep interest rates low, making money more freely available for investment in new and stronger industries. Chinese competition forces American businesses -- Signicast, for example -- to use capital as efficiently as possible. And to run their plants full tilt. And to find
Re: China and the American consumer
- Original Message - From: Devine, James [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Sunday, July 04, 2004 10:47 AM Subject: Re: [PEN-L] China and the American consumer A lot of this would be changed if China let the renminbi float (i.e., rise). The predictions at the end seem similar to those made about Japan awhile back (e.g., in Michael Crichton's RISING SUN) before the Japanese miracle popped. jd -- The article itself, like those articles about 20 years ago, have a lot of the old yellow peril theme. The Chinese economy is about as uneven, ragged, stumbling as you can get and still be upright. Agriculture has been decimated-- and there is no contradiction between internal decimation and increased exports, in fact as the same past 20 years have shown, the two go hand in hand. Infrastructure as a whole is unable to sustain the explosion of projects and non-performing debt levels will begin another explosive increase. Ah yes, the competition from the east-- with the supposed benefit to American consumers more than offset by the workers both in China and the US.
