Tag: China

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For the past couple days I’ve been attending GenCon, the largest gaming convention. This has been a wonderful experience, from seeing people play Robo Rally with actual LEGO robots to acquiring a rare, out-of-print expansion for a game of mine in the dealer hall. Wonderful things, but if you want to hear more about them […]

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It has often been noted how people make decisions based on feelings more than on reason. Right-wrong-good-or-bad, if we want to persuade people, we need to find ways to appeal to emotion as well as reason. I’ve found that stories that illustrate a principle are among the best ways to do that, and double the points if […]

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Bring the Jobs Back Home!

 

FoxconnBefore we race to slap tariffs on imports from China, before we insist that it’s possible to “bring those jobs back” to the United States, let’s first ask: which jobs?

The ones in China — at least the ones around iPads and iPhones and the like — don’t seem all that promising. From the Observer:

The world’s largest electronic contract manufacturing company is replacing more than half of its workforce with artificially intelligent robots.

Even If Apple’s iPhone Manufacturing Came to America, the Jobs Wouldn’t

 

foxconnFirst, this headline in a Washington Post op-ed by Vivek Wadhwa: “Trump’s demand that Apple must make iPhones in the U.S. actually isn’t that crazy.”

Well, maybe not that crazy if you don’t care who might assemble those iPhones. Actually, not “who” but “what.” If POTUS Trump could somehow coerce Apple into moving manufacturing to the US, it might not be humans getting those jobs. Wadhwa:

When American companies moved manufacturing to China, it was all about cost. China’s wages were amongst the lowest in the world and its government provided subsidies and turned a blind eye to labor abuse and environmental destruction. Things have changed. China’s labor, real estate, and energy costs have increased to the point that they are comparable to some parts of the United States. Subsidies are harder to get and Chinese labor is not tolerating the abuse that it once did. China is now a more expensive place to manufacture than Indonesia, Thailand, Mexico, and India according to Boston Consulting Group. … Technology is, however, changing the labor-cost equation even more and China is becoming unpredictable because of its faltering economy. It may make sense for Apple to locate some of its manufacturing closer to other markets just to protect itself from this uncertainty. …

“We Thought Mao Was Doing a Wonderful Thing”

 

Fifty years ago yesterday is generally considered the date that Mao Zedong initiated China’s Cultural Revolution. Over the next three years, two million Chinese may have died in the upheaval, with millions more punished and/or internally exiled. While the worst of the violence was over by 1970, aspects of the Cultural Revolution lasted until 1976 when Mao died and the Gang of Four (which included his wife) were deposed. Having only a few years earlier (1958-61) subjected to populace to the madness of the Great Leap Forward — which led to 20 to 40 million deaths from starvation and regime-inspired violence — Mao feared his subjects were beginning to show too much personal initiative and losing their revolutionary ardor to achieve the Communist state. Or, as Zhou Enlai, Mao’s comrade, observed, “Every time the situation improves a little, the people move back towards capitalism”.

Producers Are Consumers, Too

 

In debates on trade, it’s a sure inevitability that some free-marketeer will defend cheap imports on the grounds that they make goods more affordable to American consumers. This is, so far as it goes, absolutely true. But the equally inevitable retort from trade-skeptics that cheap flatscreen TVs are no good to those without jobs is also true, at least so far as it goes. Both sides, unfortunately are missing a critically important point: Most American manufacturers are also American consumers, and in a very significant way.

Just last month, our own Skipsul provided an eye-opening example of this in his piece “I, Circuit Board,” which detailed how his automotive electronics manufacturing company relies on a web of supply chains that stretch across half the world, starting with raw materials, and proceeding through a series of intermediate products that culminate in a single consumer good. And the less expensive a given input for Skip, the more money he has to put to other uses, whether it be lowering prices, improving his product, hiring new workers, increasing wages, or giving him enough cash on hand to pursue his hobbies or further upgrade his Ricochet membership. (Just sayin’. Hey, we’re an American employer, too!)

Is the US Really Getting “Trumped” on Trade? A Q&A with Claude Barfield

 

china_hong_kongTrade and trade partnerships hit the American public in a big way this past summer in the form of the Trans-Pacific Trade Partnership, with voices on right and left chiming in on a deal positioned as President Obama’s NAFTA. Signed this past February, it included 12 nations representing 40 percent of the world economy.

But China – one half of the world’s two economic superpowers — wasn’t part of the TPP, and Donald Trump’s campaign trail emphasis on failed American deal-making seems to stoke popular fears that trade with that country hurts the American worker. So did “trade [make] America great,” as one CEO opined in the WSJ? “Are Trade Agreements Good for Americans?” Is America losing a trade war that will see China crowned the world’s strongest economy?

On my Ricochet podcast, I chatted about all this with Claude Barfield. Before coming to AEI, he was on the faculties of Yale and the University of Munich, and worked at the National Journal; in the Department of Housing and Urban Development; the Senate Governmental Affairs Committee, and as a consultant to the office of the US Trade Representative. he is the author of multiple publications and has a Ph.D. from Northwestern University.

When Trump-onomics Comes into Contact with the Real World

 

made_in_chinaLife is complicated. There are trade-offs. And unintended consequences — good, bad, neutral.

Example: Take Donald Trump’s idea of banning remittances unless Mexico pays for his proposed border wall. From a NY Times op-ed:

There are a number of logistical problems with this plan, including political realities, legality and the feasibility of stemming the flow of these informal payments. But even assuming this policy was possible, the economic implications would be felt as much in the United States as in Mexico.

Why I’ve Changed My Mind On Trump

 

Early on, I was a bit seduced by Donald Trump, mostly because he has exquisite taste in enemies and because my political instincts incline me toward populist upstarts and against arrogant establishments. In the early 1990s, for example, I was an early and enthusiastic supporter of the Reform Party of Canada. At the time, the Canadian political establishment was at its most corrupt, arrogant, and insular and the Reform Party was the right antidote.

Why I Might Choose Clinton Over Trump

 

shutterstock_57845491shutterstock_155865416I can’t stand Hillary Clinton. She is a criminal that should be behind bars for life. However, nothing in her views (as fluid as they are) makes me think she would start a trade war with China. On the other hand, Donald Trump has made demagoguery of China a feature of his campaign. Larry Kudlow’s reassurances notwithstanding, there is a real significant possibility that Trump embraces the same devastating protectionism that kicked the great depression into high gear. In my opinion, nothing is as dangerous to our general prosperity and security as this. Therefore, until I can feel moderately sure that Trump won’t start a trade war, I can’t support him or even stand by and not vote against him.

Please tell me why I’m wrong, Ricochet.  I hate the idea that our system has declined to the point that we have for vote for criminals to save us from disaster.

-E

Vietnam Invites US Army to Return

 

south-east-asiaFour decades ago, US forces left Vietnam after a bruising defeat to China- and Soviet-backed communists. Today, Vietnam has asked the US Army to return:

The Army plans to stockpile equipment in Vietnam, Cambodia, and other Pacific countries yet unnamed that will allow US forces to deploy there more rapidly, because key supplies and gear will already be in place. The new caches will be well inside what China considers its sphere of influence.

Army Materiel Command chief Gen. Dennis Via emphasized they will contain equipment for Humanitarian and Disaster Relief operations (HADR), not heavy armored vehicles that fill the rapidly growing European Activity Set. Still, the presence of an American Army cache in Vietnam would be dramatic. Americans best remember our defeat there 42 years ago, but Vietnam has fought a land war and multiple naval clashes with China. Beijing will not be pleased.

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I use adblock. I recommend it. It makes ads go away. I worry sometimes if I’m not doing something stupid to websites I should be supporting–I’d like to be able to find out, I’m not too unreasonable or entitled… What I am is yellderly, only I don’t yell. I’ll get back to this later. I […]

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Again, US Trade with China Has Been a Good Thing

 

RTX274C4_shanghai_china_trade-e1457381972406Scott Sumner offers an interesting response to the recent David Autor, David Dorn, and Gordon Hanson paper on the China trade shock, which show some areas exposed to this new competition never recovered:

First, even if China trade was bad for the US, it was almost certainly extremely good for China, which was a vastly poorer country in 1990. So I’m quite confident that economists are justified in supporting free trade. Whether they are justified in suggesting that Chinese trade is beneficial to the US is another question.

Second, this is just one study, and as we’ll see it’s far from convincing. We don’t abandon views held for 200 years, and supported by hundreds of studies, just because of a single study. I can’t speak for other economists, but I very much doubt whether economists are holding back some sort of “secret” information that free trade is actually bad.

Trump is a Nazi, Only More Elitist

 

trump-nazi-saluteOkay, I’ll admit: The headline here is clickbait.

But here’s a data point which I think proves Donald J. Trump — if, in fact, this needs proof — is blowing steam out of his pie-hole. (I’m not trying to dive into the Trump vs. GOPe argument. I’m just trying to help Rob run a business here. I want people to read this post, think about the data point I’m writing about, and then join Ricochet.)

Chinese exports plunged 20 percent last month:

The Impact of “China Trade Shock” on US Workers

 

shutterstock_124001773This is a pretty good example of a trade-off in economic policymaking. From “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade” by David Autor, David Dorn, and Gordon Hanson (italics mine):

China’s economic growth has lifted hundreds of millions of individuals out of poverty. The resulting positive impacts on the material well-being of Chinese citizens are abundantly evident. Beijing’s seven ring roads, Shanghai’s sparkling skyline, and Guangzhou’s multitude of export factories none of which existed in 1980s are testimony to China’s success.  …

If one had to project the impact of China’s momentous economic reform for the U.S. labor market with nothing to go on other than a standard undergraduate international economics textbook, one would predict large movements of workers between U.S. tradable industries (say, from apparel and furniture to pharmaceuticals and jet aircraft), limited reallocation of jobs from tradables to non- tradables, and no net impacts on U.S. aggregate employment.

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When the Cambrian measures were forming, They promised perpetual peace. They swore, if we gave them our weapons, that the wars of the tribes would cease. But when we disarmed They sold us & delivered us bound to our foe & the Gods of the Copybook Headings said: “Stick to the Devil you know.” That’s […]

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The Chinese Have Already Cemented Obama’s Legacy

 

521886277FL00047_U_S_PresidTuesday’s State of the Union address could easily be summarized as President Obama making one last rhetorical defense of his presidency to an unconvinced American people who possess no tangible signs of his success. We have to be constantly reminded of the things President Obama has “accomplished” because they have simply created little to no immediate value for the American people. The Affordable Care Act, for example, is increasing health insurance premiums and decreasing the quality of coverage. Defenders of the president will quickly point out that many of his signature policies, like the Iranian Nuclear Deal with the major powers including China or the climate agreement with China specifically, likely won’t bear fruit for many years and are simply investments for the future. This may be the case and it would be naive to expect immediate positive results from these major policy changes.

The only thing more naive is to trust that the Chinese government will adhere to the terms of long-term international agreements.

Obama’s signature achievements, to be polite, on foreign policy and climate/energy run through Beijing. First, the Chinese must be willing to punish their not too distant neighbor and soon-to-be major trading partner, including oil supplier, should the Iranians decide to build a nuclear weapon. This would be a tall order regardless of Beijing’s reputation. China is currently bordered by four known nuclear-armed states, including North Korea and Pakistan, and has a major weapons program itself. It’s hard to imagine they care as deeply about nutjobs with nukes as much as we do given the circumstances. China is also supposedly committed to begin reducing its carbon emissions by, according to official White House language, “around 2030.”

China is Going to Get Wealthier: That’s a Good Thing

 

File:Chinese flag (Beijing) - IMG 1104.jpgChina may be having a hiccup in the economic rise it has been experiencing over the past decades. But should China wind up as comparable in economic status to the United States, it might be a good thing all around.

China has had it rough economically for a long time. It was defeated in the two Opium Wars with Great Britain and split between the Spheres of Influence of the Great Powers. The disastrous Taiping Rebellion further disgraced the Qing Empire in the Victorian Era. It was immediately followed by China’s humiliating loss of Korea to the Japanese Empire in the First Sino-Japanese War. This led to the collapse of the Qing Empire, the creation of a republic, and the outbreak of civil war between forces loyal to the Kuomintang-led government and forces loyal to the Communist Party of China. Meanwhile, decades-long Japanese imperial policies matured, prompting Japan to instigate the Second Sino-Japanese War in 1937 and hastening the onset of World War II. The Communists won the Civil War and Mao Zedong came to power, a series of catastrophes in itself.

This century-long period of political depravity clearly doomed the Chinese economy. But following Mao’s demise, China began to slowly to thaw. It began experimenting with free markets in such arenas as farming and businesses, leading to the expansion of its private sector economy. The Party didn’t interfere so long as it didn’t threaten the state sector. Ronald Coase and Ning Wang tell the story of China’s economic transformation in an essay based on their book, How China Became Capitalist.