China is America’s True Friend
RMB and China is America’s opponent? This is now the most controversial topic on Wall Street, economists are racking their brains to calculate the true value of the yuan, to find ways to make win-win China-US. In fact, China is not only not a villain but a hero or helper.
China’s accession to the World Trade Organization (WTO), the U.S. authorities had claimed that China is the most popular members. While some economists warn that China may embark in trade and business the opposite of the United States, but insisted the United States Trade Representative, WTO provisions to ensure that U.S. manufacturers are not for many years to the impact of cheap Chinese goods. The Clinton administration also said China’s accession to WTO is a major breakthrough. It opens the Chinese market, to protect the U.S. investment and technology in China, and will enable China to further acceptance of Western business values.
China did help the U.S. manufacturing sector. In 1988-1998, the U.S. manufacturing sector growth faster than any other country. Cheap raw materials imported from China by the U.S. machine parts, office supplies, plastic molds and other products in the global market has a huge advantage, making a great profit. China’s exports to the U.S., although China’s trade surplus is large, but the wages of Chinese workers is only about 4.5% of American workers, this must not mean that China is America’s villain. In addition, China holds 60% of U.S. bonds, which the U.S. government to drive down bank lending rates, their frequent acts of war overseas fund-raising. If China’s export surplus with the money earned to invest another U.S. counter-terrorism operations will not be carried out.
In addition, a Brookings Institution study, economists found that since 2000, unemployment in the U.S. manufacturing sector, the trade accounts for only 12% of practitioners. Most unemployment is due to weakening exports, not imports from China increase. There is also a curious fact that the U.S. trade deficit with China is due to the low savings rate of the American people. The personal savings rate continued to decrease and increase the budget because of the war unrestrained, but also expanded the deficit. Therefore, we can conclude, by cheap imports, increase exports and low domestic interest rates to keep cash flow, the United States from China in the multi-profit. This is for the United States is truly a win-win situation.
If the U.S. imposed high tariffs on Chinese exports, will once again be counterproductive. Middle-income families to the United States, this is tantamount to a direct tax, while those who rely on imported parts from China, raw materials and other commodities to ensure a competitive advantage in the global market for U.S. companies, their costs will greatly increased. U.S. domestic demand is not sufficient to complete U.S. manufacturing consumer goods.
U.S. government notes, the U.S. needs is a low cost of living and ensure that the value of the dollar. United States has been the exploitation of other countries and its own domestic people, and other countries criticized the economic strategy of big increases. At present, it is time the U.S. government to learn from other countries, and recognize previous mistakes.
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