Showing posts with label China. Show all posts
Showing posts with label China. Show all posts

Is China ending its relationship with Capitalism?

I am listening to the head of GE speak in Toronto at an off-the-record speech to my secret handshake club.
His remarks on China at a private function were disclosed last month and have continued to stir up debate about China and America's relationship. Here is a terrific comment in response to an article on China:

I've spoken with executives at American companies that tell me they have "their own factories" in China, and they seem proud of it. But then when I ask, "Doesn't the Chinese government own 51% of your factory?" they'll then say "Yes, well, err, that's the way they do things over there, but it's our factory!"  
Not really. Since we began on this road to globalization, that is, free and mostly unregulated trade, just about the same time that Chairman Deng was opening China to Western capitalism, China has played us for fools. We've taught them how to make everything we know how to make, from steel to computers, iPods to cell phones, giftware to American-style furniture, and all the fittings and components and add-on's as well.When we decided to invade Iraq, Congress and the Bush Administration decided to keep the costs off the books and out of the budget, so we borrowed as much as $200 billion each year from China and Saudi Arabia, and a few other countries here and there. This, at the same time we were running a trade deficit with both countries and had to borrow from them to be able to afford importing all those great things we buy from China and all that Saudi oil. So while we were forcing American businesses to set up factories in China that brought in labor from the countryside at a whopping $5/day for 60 hours/week (no labor unions in Communist China, I suppose), we were exporting our manufacturing base and all of our manufacturing technology to that country and in the process enriching the Chinese government with virtually every dollar we spent. Now we're in a so-called Great Recession in which we're having to face the fact that we've lost literally tens of millions of good-paying manufacturing jobs, and China is doing great, up 10% a year, raising its general wage to another whopping $6.50/day and building what will become the second strongest naval, air and armed forces in the world. Not to mention their advanced missile technology, which they'll sell to anyone with money to buy it.
We've been such chumps.
Of course, Obama says he has a plan to create great jobs that can't be outsourced. Nonsense. The Chinese are way ahead of us in wind and solar technology. They've taken their riches and put it into vast new infrastructure projects and research, and when we finally have the resolve to build those new highways or create that new electric grid it will be with Chinese machinery and technology.
The Republicans are no help either, as they don't seem to have a clue about how to create jobs. They just want to protect the banks and Wall Street so they have the money to win elections and make it easier for the rich to get richer while denying any help at all to everyone else.
I see no future for this country unless and until we confront the outsourcing of jobs to China head-on. Globalization doesn't work for us when overseas labor is so cheap. China doesn't play by the same WTO rules in any case. It's time to establish bilateral trade agreements with key trading partners under which they can't export to us very much more that we export to them. At the same time, we need to protect key industries that are vital to our national security, like steel, metal fabrication of all kinds, shipbuilding, electronics with military uses, on and on.
There's no other way out of the downward spiral of cheap goods forcing Americans out of work, so they have less money and have to buy cheap Chinese goods, which leads to more layoff's, and down we go to being a third world country. It's time someone in Washington, and in the media, had the courage to call a spade a spade. The loss of our manufacturing base is what's killing America and unemployment won't go down until we begin to restore it.