There are roughly 15 million unemployed Americans. China has to generate 15 million new jobs a year just to keep employment levels where they are, or 300,000 jobs per week.
The official number of migrant workers, those from China's impoverished rural regions who work in its cities, is estimated to be 120 million, or 9% of the population. That estimate is undoubtedly low and higher than the population of Mexico.
These are the reasons behind Beijing's jawboning on the issue of its currency manipulation. Everyday low prices for Chinese exports have lifted the country into second place economically and its leaders are committed to stalling the inevitable revaluation as long as possible. This is their fiduciary obligation and also a social imperative in a country that is a cell phone swarm away from revolution in certain regions.
What's interesting, however, is that China's other cornerstone policy is its hold over the US and EU economies. Trillions are held in its government and, quietly, in blue chip stocks. Its been buying Yen and Greece's bonds to keep both currencies higher.
China has also chosen to benefit, trade-wise, certain key influencers such as Germany's automakers and certain US blue chips so they will lobby against retaliatory action on the currency front.
This week's award of a Nobel Peace Prize to a jailed Chinese activist is an embarrassing backdrop but what will turn the tide is the anger of other emerging economies with job creation problems of their own "We are in the midst of an international currency war," said Brazil's finance minister earlier this week.
This week these emerging economies began to gang up against China as its artificially low Yuan is going to force them to have to competitively devalue their currencies and impose damaging protectionist measures.
World Bank chief Robert Zoellick knows where this leads -- to a Great Depression -- and has said so but the emerging economies are also in a box.
They have done what the US should have done long ago.
For months, US Treasury Secretary, Tim Geithner, has played good cop to Congress' bad cop even though he has in his hip pocket proof that China's 25% to 40% undervalued and can, without approval, impose an equivalent tariff on all Chinese goods and services. China protests that this retaliation would contravene World Trade Organization rules -- a claim which is, considering the scale of their cheating, laughable.
Meanwhile, the devaluation of the US dollar is helping the stock markets along with the glacial improvement in incomes and spending. (US incomes were up 0.4% in August and consumer spending 0.5% following months' of increases).
But this week's events reveal that it is time that the US, EU, Canada, Mexico, Brazil, Turkey and everyone must gang up. Since 2008 when the developed world hit the wall, China's created another 30 million jobs or nearly the population of Canada or California. Enough's enough.
China's currency: War is hell | The Economist
China Currency War: U.S. House Bill Won't Fix Problem - TIME
US-China currency war eclipses Davos, and threatens the world ...
You see, currencies are a means to an end, they do not take the place savings, investment and production, something that China has been doing and America has not been doing for the past 20 years. You will get what you are asking for sooner or later, but far from a boom, a weak US dollar will signal the death of the US economy, not it's resurgence. How many empires in history reached their zenith with a weak currency? (hint: the answer is none). It's not about currencies, its about debt.
It's just too bad that China won't cooperate and shoot themselves in the foot so America can rise at their expense. What happened to altruism?
The other thing we don't want to think about is what a cheap American dollar will do to the cost of everything that already desperate American consumer will buy.
Other nations are just trying to defend themselves, their trade, and their domestic assets from an onslaught of QE dollars and leveraged speculation of 0% US dollar loans.
The US banksters wants the dollar holdings of foreign nations (China, Japan, et al) to become worth less, in effect a US debt default.
So far, the US has been able to get away with the scam because of the fiat dollar's global reserve status, now based on a legal petrodollar framework ultimately enforced by military control of resources.
It took China 30 years of breakneck growth with MANY sacrifices - literally having an enforced social contract of asking citizens to bear the burden of 3 generations in 1, and do the work of 2 generations in 1. Still the per capita GDP is "only" $4,000. There are only so many opportunities on earth, and most of them go to the rich, developed countries.
Living in a paradise and mouthing off about people wallowing in dirt below you, is hardly charitable.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=au7tdjzgHks8
This is not an excuse for the deplorable working conditions in China or their unfair economic policies. But we do need to understand that poor countries first and foremost will do what they need to survive.
It is true that China is now Africa’s biggest trading partner. Twoway trade (in which imports and exports are more or less equal) increased from $1-billion in 1992 to $106.8-billion in 2008. China’s investment in Africa has grown by as much as 30% annually, faster than in any other continent, from $1.6-billion in 2008 to $5.4-billion in 2009. About 2 000 Chinese companies are engaged in 8 000 projects in Africa, mainly in infrastructure and agriculture.
http://www.thebrenthurstfoundation.org/a_sndmsg/news_view.asp?PG=227&I=110831&M=0&CTRL=S
Where's the US? Arguing over whether Obama is a muslim and communist on Fox News?
Fortunately they realized how stupid this was:
http://www.google.com/hostednews/afp/article/ALeqM5ggGSr-inYMgM_nH4roJxXPqg8D_g?docId=CNG.87fc43de98513173dcce8b64af55cda1.b41
Anyway about $7.7 billion worth of American investment from this organization alone went into Africa. For whatever reason our presence there is largely understated or ignored.
"The MCC, created by Congress in January in 2004, helps developing countries reduce levels of poverty as long as they meet performance criteria on the rule of law and democratic principles."
This Webb guys seems sharp.
Ask Liu Xiaobo if we should be supporting China.
Oh Wait, they won't let him speak.
http://www.bbc.co.uk/news/world-asia-pacific-11529920
"A group of 23 Communist Party elders in China has written a letter calling for an end to the country's restrictions on freedom of speech.
The letter says freedom of expression is promised in the Chinese constitution but not allowed in practice."
We can hope things change.
A true Democratic China would be most welcome.
There are also more Chinese learning English in China than there are people who speak it in America.
The USD is THE reserve currency in the world. When there are hiccups in the the world, other nations buy US Dollars. So it is indeed true that if there is ganging up, it is done by the entire world to buy the USD up. It is GREAT when policies favor a strong dollar. It is now the other way and Washington wants the dollar DOWN.
"So to have the world's most integrated production of high speed rail systems, and the fastest supercomputer, and nuclear power plants built at 1/5th the cost in the U.S., etc., all you need is "wages far below equilibrium""
Well, the argument that you made is that slave labor isn't even a possibility. By driving wages low enough by devaluing the currency, it is absolutely possible. THAT was the point I was making. But to answer your question, yes artifically low wages are the reason that plants can be built at 1/5 of the cost, why multinational developers operate in China instead of elsewhere, etc. It's not the only reason (and I challenge you to find where I EVER said that), but to pretend that it doesn't play a role is absurd.
"And no environmental regulation is the recipe for high speed development of wind turbines and solar PV, again driving down cost almost 5 fold in 5 years. Brilliant observation, runswithscissors!!"
You're confusing development and regulation. You can build all the green technology you want, but it doesn't matter if there aren't any rules to stop polluters.
"China bashers are so silly"
When did legitimate criticisms become bashing? I actually admire China BECAUSE they want to operate on their own terms, but in terms of trade if they want to play the game they have to follow the rules.
It does nothing to help American workers, meanwhile the vast majority of Chinese workers work for next to nothing in apallingly unsafe work conditions.
We should rapidly disinvest in China, and look to trade with other emerging economies with Democratic values more similar to our own.
Chinese goods are 'Cheap' in the worst sense of the word. We can do better.
It wouldn't happen to be because US consumers have fewer and fewer choices of domestic made goods and fewer and fewer choices of retailers
And of coure must you be reminded of poison pet fod, baby formula, toothpaste, lead tainted toys, cadmium jewelry, toxic drywall, unsafe tires to name some of the more well know instances of "quality" chinese products
Or the fact that chinese made clothing, tools, appliances, shoes, furnitaure which doesn't have a lower price tage than the domestic product they replaced, nore do they last nearly as long
Are those conditions that can be replicated in the developed nations that "hit the wall"? Ganging up will do no good. It will only worsen things. Killing $1.50/hr jobs in China is not going to rescue the American economy, but will (a) raise prices to 300,000,000 American consumers, and (b) kill the source of purchase of Treasuries and GSEs, (c) kill the $80 Billion a year in profits that 57,000 American businesses make in China each year (compared to the 1-5% profits on the $300 Billion in China exports to the U.S. - or a max of $15 Billion; yes $80B vs. $15B max), and (d) kills the fastest export market for Made in USA goods. Developing nations would also lose China as a source of investments and an export market.
Protectionism only begets same, and it kills profits, kills exports and jobs, and raises prices on American consumers.
Cooperation is the only solution. China has offered to buy more from the U.S. but Washington refuses to liberalize the export control list, even just to allow exports of products freely available on the international market (and therefore do not implicate security issues).
The meeting this weekend in Washington indicates that nobody wants a trade war.
What's funny is your comments so mirror those of the "US" Chamber of Commerce.
these chian apologists are out in force on any of these trade related threads lately - they sound more and more desperate as the public mood is turning against their failed trade ideology in growing numbers