Sunday, November 21, 2010

Misunderstanding the US-China Trade Relationship

Deroy Murdock's latest piece for NRO is excellent.  Here's a snippet:
With China still in his crosshairs, Obama also said in Seoul, “Countries with large surpluses must shift away from unhealthy dependence on exports and take steps to boost domestic demand.” He added: “No nation should assume that their path to prosperity is paved simply with exports to the United States.”

Now, do these wretched exports tumble from bombers piloted by the People’s Liberation Army Air Force? No. Do Chinese secret agents strap these products to donkeys and deploy them northward across America’s porous southern frontier? Negative. Nor do Chinese exports land on our beaches after being whisked here aboard Chinese Navy submarines.

Beijing’s exports should be no more surprising than a home delivery of wonton soup ordered from a local Chinese restaurant. Chinese-made goods are here because Americans demand them. These dirty Chinese exports that protectionists like Obama condemn are ordered by U.S.-based managers and purchasing agents, who market them to their American customers.

At the request of their U.S. clients and business partners, China is filling America’s homes and offices with increasingly high-quality goods at steadily falling prices.

And about this, Obama complains? The president should ask himself: “Why do U.S. companies leave America to manufacture in China?” Perhaps lowering America’s 35 percent corporate tax (the developed world’s highest), easing Big Labor’s kung-fu grip on U.S. factories, and making this country less lawsuit-happy might entice American companies to manufacture their goods in Sheboygan rather than Shenzhen.
Amen.  I'd only add that, considering that about 50% of all Chinese imports are capital goods and equipment, China's not only "filling America's homes and offices with increasingly high-quality goods," but also providing US manufacturers with low-cost inputs so that they can remain globally competitive (despite America's onerous corporate taxes, dumb regulations, overzealous litigants and archaic labor arrangements).

And yet our elected officials loudly complain and brazenly demand a "re-balanced" relationship.  Pretty dumb, eh?

Of course, while such whining might be dumb, it's not really surprising.  Most of the folks who scream about China (or Mexico or Japan or...) have championed higher taxes, increased regulation and federal bailouts, and are are bankrolled by Big Labor and the trial lawyers.  So they have no choice but to blame the foreigners for America's economic ills, lest anyone actually wise-up and look behind the curtain.

1 comment:

RickRussellTX said...

If you haven't seen this yet, you should. It's quite hilarious: