Obama, China, and Wishful Thinking About American Jobs

[Crewleader]

Tuesday, November 17, 2009

Robert Reich's Blog

Obama, China, and Wishful Thinking About American Jobs

President Obama says he wants to "rebalance" the economic relationship between China and the U.S. as part of his plan to restart the American jobs machine. "We cannot go back," he said in September, "to an era where the Chinese . . . just are selling everything to us, we're taking out a bunch of credit-card debt or home equity loans, but we're not selling anything to them." He hopes that hundreds of millions of Chinese consumers will make up for the inability of American consumers to return to debt-binge spending.

This is wishful thinking. True, the Chinese market is huge and growing fast. By 2009, China was second only to the U.S. in computer sales, with a larger proportion of first-time buyers. It already had more cell-phone users. And excluding SUVs, last year Chinese consumers bought as many cars as Americans (as recently as 2006, Americans bought twice as many).

Even as the U.S. government was bailing out General Motors and Chrysler, the two firms' sales in China were soaring; GM's sales there are almost 50% higher this year than last. Proctor & Gamble is so well-established in China that many Chinese think its products (such as green-tea-flavored Crest toothpaste) are Chinese brands. If the Chinese economy continues to grow at or near its current rate and the benefits of that growth trickle down to 1.3 billion Chinese consumers, the country would become the largest shopping bazaar in the history of the world. They'll be driving over a billion cars and will be the world's biggest purchasers of household electronics, clothing, appliances and almost everything else produced on the planet.

So this will mean millions of American export jobs, right? No.

http://robertreich.blogspot.com/2009/11/obama-china-and-wishful-thinking-about.html?ref=patrick.net

[sandnsea]

1. That's not Obama's economic plan

This is:

"American firms are now helping China build a "smart" infrastructure, tackle pollution with clean technologies, develop a new generation of photovoltaics and wind turbines, find new applications for nanotechologies, and build commercial jets and jet engines. GM recently announced it was planning to make a new subcompact in China designed and developed primarily by the Pan-Asia Technical Automotive Center, a joint venture between GM and SAIC Motor in Shanghai. General Electric is producing wind turbine components in China. Earlier this month, Massachusetts-based Evergreen Solar announced it will be moving its solar panel production to China."

Since Reich also wrote this in that blog, I don't know what he thought he was accomplishing by blathering on about consumerism. Controversy=Traffic I guess.

[AdHocSolver]

5. Whoever controls the means of production controls the world's economy.

The American corporations are giving away the technology and production capabilities to China that will allow them to literally "rule the world", while, at the same time, convincing Americans that they have it good because they can buy a lot of "wonderful" cheap junk at Wal-Mart by going into debt.

Obama needs to get some new economic advisors.

[girl gone mad]

6. Scary.

Our business leaders are essentially giving away our technological know-how in exchange for cheap Chinese labor. Chinese manufacturers are very good at luring foreign businesses to build factories in China with the promise of unbelievable rates for finished goods. They are able to offer such low prices because they steal product formulas and sell identical goods to the Chinese market, substitute inferior ingredients into the items and frequently change the terms of agreements with no regard for signed contracts.

All of these technologies, many of which were developed with enormous subsidies from American taxpayers, will end up in the hands of Chinese corporations, selling around the globe for pennies on the dollar.

[skoalyman]

2. off to the greatest, as americans we should all be outraged.

:argh:

[notesdev]

3. How about rebalancing rights

There is NO WAY IN HELL we can have a sustainable, long-term healthy relationship with a Chinese economy staffed by slave labor and its equivalents. Just how many products is a "consumer" who makes $2/day going to buy?

[AdHocSolver]

4. Why would China buy goods from the U.S. when they can make the goods in China more cheaply.

The ONLY way the U.S. economy can survive is if we manufacture most of the goods that we purchase here in the U.S. using American workers.

It is the corporations who profit from this one-way trade. The corporations build factories in China and then import the goods into the U.S. It is the U.S. corporate cartels that fight tariffs and import quotas to utilize the cheap foreign labor and avoid paying taxes.

Until MFN status for China, NAFTA, the World Bank, the WTO, the IMF, and all of the other corporate cartel agreements are replaced with trade agreements that protect American jobs, this country will suffer economic depression and contraction and will never recover.

The push to develop "green jobs" at taxpayer expense will not help this economy if all the technology is offshored to Asia by the corporations, as has occurred for the past thirty years with the corporations building factories in China to produce goods that use existing technology, much of which was developed in America.

There is nothing that we can manufacture in the U.S. that the Chinese would want to buy that they can't make more cheaply in China. The U.S. corporations built the Chinese manufacturing infrastructure to get the use of cheap labor. Unless trade agreements are changed, the corporations will offshore jobs in "green" technology industries. Why are so many Americans in denial about this, including our politicians.

[ixion]

7. uh, we don't make things here anymore... how are we going to trade?

I mean, there are a few factories here, but by and large day-to-day things are made in China, India, Mexico, etc. Don't we, you know, have to make stuff here again before there can be balanced trade?

I don't consider a select group of global companies providing China with technical consulting to be trade, really, at least not in the sense that it will serve the broader markets.