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[This post was edited by Donald_Trump at 2016-1-8 11:42]|
At one time, many Americans shivered in their boots over China’s perceived world economic dominance and the threat it posed. Well, that paper dragon has lost its teeth.
The supposedly booming Chinese economy has hit the wall. A new Wall Street Journal story reveals that as the Chinese economy falters, strikes and labor protests throughout the country have nearly doubled during the first 11 months of 2015 to 2,354 from 1,207 during 2014.
How is Chinese manufacturing coping? The news may surprise you – some are moving their operations to America.
The upshot is that China is transitioning from low value-added goods, such as socks and underwear, towards more advanced goods and services, according to Marketplace.
So Chinese companies need more of the kinds of skilled labor available in the United States while staying closer to their customers, especially in auto manufacturing. The message to Chinese manufacturers is that they can actually cut costs in the long run by setting up shop in America. Jason Kirby, a columnist and business editor at Maclean’s, notes that the blunt talk and tactics policy-makers once deployed are no longer an option. “The stimulus may have kept factories open, but wasteful investment spending spawned massive oversupply of capacity in many industrial sectors, created credit and housing bubbles that make even 2005-era America look thrifty and left China at risk of a Japanese-style lost decade of deflation.”
To save face, Chinese authorities continued to communicate flawed economic numbers, claiming that China’s GDP is on track for seven per cent growth. This is sheer fantasy considering electrical consumption in China expanded just 0.2 per cent from the year before. Based on that metric, experts estimate that China’s true GDP growth may be no more than one to three percent.
According to a Gallup Study, forty percent of Americans regard the economic power of China as a critical threat to the vital interests of the U.S., down from 52 percent in both 2013 and 2014. Since last year, Americans have shifted more toward viewing China's economic power as an important but not a critical threat, or as not an important threat.
The study also revealed that 12 percent of Americans name China when asked to say which country they consider the United States' greatest enemy. That is down from 20% in 2014 and 23% in 2012. China currently ranks behind Russia and North Korea, after topping the list in 2014 and finishing second, to Iran, in 2012.
The study suggests that a slowing Chinese economy is a possible factor in Americans seeing China's economic power as less of a threat than in recent years. And as Americans grow more confident in the health of the U.S. economy, their views of what threatens the U.S. may shift more to security concerns than economic ones.
Want other signs that China is floundering economically? The Chinese government's top steel-industry forecaster says production will fall this year for the first time in two decades, a drop that could cost the central government more than $6 billion over the next two years.
It seems to me that this is long overdue retribution after China helped destroy the U.S. steel industry by flooding the U.S. market with cheap steel that was heavily subsidized by the Chinese government.
We’ve been down this road before. Back in the 1980s we believed the Japanese were ten feet tall and had all the answers. We could not read enough Japanese management books.
It seemed that if we were to survive, we had to change our businesses, culture and ourselves to imitate the keiretsu. We watched as the Japanese flaunted their wealth, gobbling up iconic landmarks such as Rockefeller Center and Pebble Beach and paying ridiculous sums for Picasso and Rembrandt paintings.
The Japanese government felt they could indefinitely manipulate the markets to their benefit. When asked why multiples paid for Japanese stocks were many times higher than those paid for American stocks, they would smugly answer that “Japan was different”.
This was code for their fervent belief that Japan was superior.
In 1989 the Japanese economy and stock market crashed faster than a waxed toboggan down Mt. Fuji. As a result they have been limping along ever since.
Sound familiar? The Chinese also feel they are “different”; that their iron fist control over their country and people is superior and they have the wherewithal to manipulate global markets forever.
Looks like the chickens are coming home to roost. The U.S. has a legacy of economic prowess and grit and just as Japan’s power waned, so will China’s. This is not the time to fear China. It’s time to realize that America has an opportunity to ascend once again to its rightful role as the engine that drives the global economy.