You know, I tend to agree with Krugman most of the time, but on this issue feel that Walt provided a more objective assessment of China's recent actions: http://walt.foreignpolicy.com/posts/2010/10/20/whos_the_rogue_superpower
To be fair the Chinese market is very open to foreign corporations, far more than South Korea and Japan.
Not true: http://www.ustr.gov/sites/default/files/uploads/reports/2010/NTE/2010_NTE_China_final.pdf Tariffs The Chinese government imposes high tariffs upon many American products. The report states: China still maintains high duties on some products that compete with sensitive domestic industries. For example, the tariff on large motorcycles is 30 percent. Likewise, most video, digital video, and audio recorders and players still face duties of approximately 30 percent. Raisins face duties of 35 percent. (p. 60) Selective Use of VAT According to the report, China makes selective use of its Value-Added Tax to keep out American phosphate fertilizer: In 2001, China began exempting all phosphate fertilizers except diammonium phosphate (DAP) from the VAT. DAP, a product that the United States exports to China, competes with other phosphate fertilizers produced in China, particularly monoammonium phosphate. (p. 60) Procurement Directives The report points out that China makes use of procurement directives to keep out American telecommunication equipment: There have been continuing reports of the Ministry of Industry and Information Technology (MIIT) and China Telecom adopting policies to discourage the use of imported components or equipment. For example, MIIT has reportedly still not rescinded an internal circular issued in 1998 instructing telecommunications companies to buy components and equipment from domestic sources. (p. 60) QIPs to Keep Out Agricultural Goods The report points out that the Chinese government uses Quarantine Inspection Permits (QIPs) to keep out American agricultural products, causing costly delays while they sit on the docks: China’s inspection and quarantine agency, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), and MOFCOM have imposed inspection-related requirements that have led to restrictions on imports of many U.S. agricultural goods.... Because of the commercial necessity to contract for commodity shipments when prices are low, combined with the inherent delays in having QIPs issued, many cargos of products such as soybeans, meat, and poultry arrive in Chinese ports without QIPs, creating delays in discharge and resulting in demurrage bills for Chinese purchasers. In addition, traders report that shipments often are closely scrutinized and are at risk for disapproval if they are considered too large in quantity.(pp. 63-64) Restricting Market Access to Services. America has a wide variety of financial and insurance services that American companies could market in China, but the Chinese government simply restricts market access. The report states: China imposes restrictions in a number of services sectors that prevent or discourage foreign suppliers from gaining or further expanding market access. (p.70) Keeping out Genuine Materials while they are Pirated American DVD movies and PC games are quite popular in China. However, American companies rarely get any sales. The report states: An exacerbating factor contributing to China’s poor IPR protection has been China’s maintenance of restrictions on the right to import and distribute legitimate copyright-intensive products, such as theatrical films, DVDs, music, books, newspapers, and journals. These restrictions impose burdens on legitimate, IPR-protected goods and delay their introduction into the market. These burdens and delays faced by legitimate products create advantages for infringing products and help to ensure that those infringing products continue to dominate markets within China. (p. 71) Demanding American R&D and Patents The report briefly mentions China's most recent escalation, its November requirement that American corporations move their R&D and patents to China: In order to qualify as “indigenous” innovation under the accreditation system, and therefore be entitled to procurement preferences, a product’s intellectual property must originally be registered in China. (p. 69) In short, the United States government is letting the Chinese government practice mercantilism, the strategy of maximizing exports and minimizing imports. We freely receive Chinese imports without requiring reciprocity. It's time to impose a tariff on Chinese goods proportional to our trade deficit with China. Such a tariff, permitted by a special WTO rule for trade-deficit countries, would finally force the Chinese government be take down its many, many barriers to American goods and services.
I'm not sure how to reply to this fully, but I do appreciate that you put yourself out there and the time it took for you to write this. Opening China up, even a repeg, will not end the US's trade imbalances. Here's a blog entry calling out Krugman's hawkishness with analysis. Fairly dated, but the same principle to the ongoing debate over the US's "failed" stimulus (jobs) policies. http://ipeatunc.blogspot.com/2010/06/world-in-decession-analytical-version.html
We don't need to wipe out the trade imbalances completely. Just need to rebalance it so that China isn't our drug dealer and we the addict. China use to take all those dollars and buy U.S. treasury's which allowed us all to borrow easily and cheaply. It stopped doing that. That's her right to do so. But it's really bad for our economy. We can't eliminate our trade imbalance, but we can certainly stop it from growing so big that is becomes a drag on our economy and keeps us in perpetual low-growth cycles. Right now our industries are having trouble competing because of many of the restrictions I outlined above. All I seek is that those restrictions be removed. The rest is up to our gov't to find ways to re-establish.
Let's check facts first before we just throw out random claims. <a href=http://www.ustreas.gov/tic/mfh.txt>http://www.ustreas.gov/tic/mfh.txt</a> MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES (in billions of dollars) HOLDINGS 1/ AT END OF PERIOD Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct Sep Aug Country 2010 2010 2010 2010 2010 2010 2010 2010 2009 2009 2009 2009 2009 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ China, Mainland 868.4 846.7 843.7 867.7 900.2 895.2 877.5 889.0 894.8 929.0 938.3 938.3 936.5
^^^ Ok, you have repeated it enough, we hear you. For once, can you pull out of your little closed world and listen carefully to what many of us have been telling you in different ways It makes little economic sense to blame the thrifty for America's trade deficit. It makes as much sense to say the world’s excess savings caused enthusiastic US consumers to flood into Walmart to buy $12 DVD players, as to say US consumer profligacy made hungry Chinese peasants abstain even more and instead plow their incomes into holdings of US Treasury bills.
you realize that your data reveals that not only has china ceased buying u.s. treasures but has in fact started selling them, right?
SWT L 42, I think you have issue with free trade and think US should resort to protectionism, which I have less problem with, but you are trying to justify it through economics with a lot of none-sense. That just irks hell out of some of us that have slight economic sense about world trade in general. Peace now.
you are *free* to think whatever you like. How far it is from the truth apparently doesn't matter to you.
Sigh, you seem to love to argue on lots of things you lack basic concept of, which reminds of the past argument we had about some simple math, a few years back. Treasury Securities usually have a maturity date associated with it, which means it's not like golden bar you can buy and put it in the basement. The fact that China's holding of US treasury bills is steady or even slightly reduced, means they are buying new ones, while the old ones maturing.
or that they are not buying any and simply letting the securities expire. you seem to love to throw a lot of data and make accusations, which is why I tend not to reply to your posts. However you find me, I find you arrogant and condescending and very very disrespectful.
This thread is getting more comical by hour. It looks more and more like a bunch of crazy folks yelling at each other with insane arguments. How many of you are posting from a mental institution now?
I don't know about a bunch of crazy folks... but the arguments from the Americans are downright bat**** hilarious :grin: And we thought the Chinese government was paranoid enough. A large number of Americans are in a whole imaginary league of their own :grin:
Not at all. I've yet to actually see evidence of a ban, let alone a ban due to political reasons. As I've mentioned, Japan is not popular in Asia in the best of times. Miners can be perfectly willing to not to export to Japan without government intervention. Now, if your point was that individual companies (outside of government influence) can act politically, I agree. But if that were the case, I hardly think a moronic theory of "China," by which I think means the Chinese government, is "rare man dangerous" as Krugman tried to peddle, has any actual substance. I think you've officially replaced Deckard as the clown of this thread. Let's not start with the "if actually had been disrespectful" bullsh1t. Your posting history is clear for all to see. It's not like I didn't give you a chance. Heck, despite your shear lunacy I've always addressed your points, no matter how pathetic, despite my better judgment. I've taken each of your "argument" and thoroughly thrashed them. Now if I was only being "disrespectful," you might actually have a point. No, you're printing money like crazy to cheapen your way out of debt and into an economic recovery. Because quite frankly, you've ran out of options. What I absolutely love is how some in the US always like to present the image of a united global front in the face of Chinese "currency manipulation" and "unfair trade practise." Want to know what the REAL WORLD actually think about your theory? http://www.bloomberg.com/news/2010-...chases-risks-jimmy-carter-like-inflation.html
For your sake, I seriously hope you're joking, because you can't seem to get the basic problem right. This isn't a chicken or egg problem here. Things aren't "really bad for us right now" because the Chinese supposedly reduced their holding in Treasuries. The Chinese supposedly reduced their holdings in Treasuries because "things are really bad for us right now." In other words, they perceived that the US and Treasuries specifically is a really bad place to invest right now, and I can't say I disagree with that opinion. Your rant reminds me of a couple of Indian morons saying that the Chinese economy is growing faster because it receives much FDI. No dumbass, the Chinese economy receives better FDI because it has a better economy and is a better place to invest.
