Since I came to the US I am fascinated by one thing. Whatever store I go to, I see products with the "Made in China" label. And this is not a stray occurence. In stores like WalMart which caters to the middle class, almost all the products sold, are from China. I saw some clothes with the "Made in Bangladesh" tag too, never a "Made in USA"! But ofcourse, sodas are the obvious exception.
Amused, I started a game to myself, to find an article which has the words, "Made in USA". I searched and searched. Finally I found Zippo lighters carrying that etching.
USA, it seems to me, is a large consumer economy than a manufacturing one. In general, all products for the high end market come from Europe and for the rest down below the affluency line, it's the Chinks! It looks as if China has bought the manufacturing rights to all sorts of consumer durables!!
No doubt, the Chinks are leveraging their population as an asset.It is a controlled labour market as well. Important of all, China's exchange rate is artificially pegged down to the dollar, making it's exports to the US dead cheap.
I made an hypothesis. Let any US president restrict the imports from China.
Effects: 1.He will see a raise in prices.
2.It will result in public unhappiness and complaint over the prices.
3.Ratings down for the incumbent in the endless opinion polls they conduct.
That is why, No US president offends China. US will preach the whole world about signing NPT. They'll demand that all markets should be open to them. But when it comes to China, it is at the decision and timing if its own, does it relent. All the South East Asian tigers got plundered because of having their currency at free float. China and India as well, escaped then because of their relatively insulated economies.
US may be known as the super power but I wonder what will happen if China lowers the boom either through its currency rate or making its exports a bit costlier!! It'll hurt US badly. So who's the actual super power?
To be a big daddy, a country has to do two things.
One, create market dependencies. you control a nation's market, you control the nation!
Second, Go Nuke! It's the Insurance!!
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8 comments:
Emmm... not really. Its inter-dependency, not just dependency. Ever wondered where China's economy will go, if due to sanctions, its exports to the US are stopped? India, Bangladesh and other Asian countries will lower their export prices and run to fill the gap... I would think the impact will be much stronger for China than for the US. Yes prices will rise, but the US government is known for the subsidies it gives. Atleast in the short term, it would hurt them so bad.....
Hey good observation. and Must say that it really is a very strong point of view
@casablanca - There's interdependency alright. But for China's government, there's no opinion poll, nobody to answer to, in the short term. And how will US establish manufacturing units all of a sudden? Even other countries should have the wherewithal to meet the sudden demand. So the first round will go to China.
@viewer - Thx. And why there's no new post on your blog? :-)
I guess this debate could go on... but just one thing to say... China is being watched by the entire world. They are trying, quite hard, to be part of the global community once again.
Arent the 2008 Olympics a statement for that?
Nice ideas but i would'nt think that would be as simple as that.At such large scale, the dynamics is bound to be a little more detailed. Interesting idea, though
@casablanca - hmm....you might have a point there!
@totti - yes, there will be some more parameters like the ones casa mentioned. But i am looking at the big picture
The saying never fails does it... behind every successful man there is a woman... and behing Uncle Sammy it is Aunt Chinky...By the way i think that is the reason why you are not successful Silmisam...
Oh My God! I, after quite some time, blog a serious post on a nation's economy. And see what comments I get! :-((
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