America Funding its Own Downfall
Chen Dongqi, vice president of the Academy of Macroeconomic Research at the National Development and Reform Commission, predicts that China's economy will continue to increase its GDP at the red hot rate of 8.5%-9% next year. This will be a slowdown over the past three year growth of 9.5%. Although China is known for deliberately predicting lower growth rates in order to try not to draw to much attention to itself from people in competing countries (like the US).
The drop in the growth rate was attributed to an expected drop in the growth of China's trade surplus. Again, this has been predicted for the last several years, and we are still waiting to see a drop in the surplus’s growth rate (I’m not even talking about a drop in the actual surplus). The most important part about China's growth is that it is achieved thanks to its manufacturing industry, which in the end is a countries lifeline.
Many of my readers like to point to the growth of the Chinese economy in order to show that the PRC is not a threat to the US. They reason they give is that, “China needs the US more then the US needs China,” and following this logic we can expect that China would do nothing that would hurt its best customer.
While this was true years ago, today this assumption is wrong. Thanks to US investments, technology, and manufacturing China is now able to make everything it needs for its own market, which we should remember is more then four times greater then the entire US market.
The large Chinese market was the reason given to the American public for why we should trade with the PRC. It was sold to us that Americans would first help China get on its feet and later the Chinese were going to repay us by buying our goods.
Well they are certainly going to repay us by buying our goods, except those goods will be manufactured in China by Chinese companies, and the American public will be left jobless and in crisis.
The drop in the growth rate was attributed to an expected drop in the growth of China's trade surplus. Again, this has been predicted for the last several years, and we are still waiting to see a drop in the surplus’s growth rate (I’m not even talking about a drop in the actual surplus). The most important part about China's growth is that it is achieved thanks to its manufacturing industry, which in the end is a countries lifeline.
Many of my readers like to point to the growth of the Chinese economy in order to show that the PRC is not a threat to the US. They reason they give is that, “China needs the US more then the US needs China,” and following this logic we can expect that China would do nothing that would hurt its best customer.
While this was true years ago, today this assumption is wrong. Thanks to US investments, technology, and manufacturing China is now able to make everything it needs for its own market, which we should remember is more then four times greater then the entire US market.
The large Chinese market was the reason given to the American public for why we should trade with the PRC. It was sold to us that Americans would first help China get on its feet and later the Chinese were going to repay us by buying our goods.
Well they are certainly going to repay us by buying our goods, except those goods will be manufactured in China by Chinese companies, and the American public will be left jobless and in crisis.
posted by Aleksandr at 11:03 PM
1 Comments:
Yes, China is quickly becoming a independent economic power. However, much of their growth is based on the ability of their labor and manufacturing markets to provide rock-bottom prices on manufacturing services for western markets. At some point in the future the price of Chinese labor and manufacturing will become expensive enough that the attractiveness of China as a source for cheap manufacturing of American goods will decrease. Furthermore, the environmental toll that their growth is having on the environment is not sustainable. China will have to confront these environmental issues when they begin to threaten human life at a significant level.
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