 |
SwiftVets.com
Service to Country
|
| View previous topic :: View next topic |
| Author |
Message |
SBD
Admiral
Joined: 19 Aug 2004
Posts: 1022
|
 Posted: Sat Dec 10, 2005 9:57 pm Post subject: THE CHINA TRADE SOLUTION |
 |
|
| Quote: |
To The Point News
THE CHINA TRADE SOLUTION
Contributed by Neal Asbury
Tuesday, 06 December 2005
President Bush’s visit to Beijing on November 20th was a tremendous disappointment in achieving any tangible progress on easing our trade crisis. Our stratospheric trade deficit is clearly one of the gravest national security threats we face – and no one in Washington seems to have a clue on how to deal with it.
Our overall trade deficit in 2005 is tracking to exceed $700 billion up from $612 billion in 2004. Our trade deficit with China will exceed $200 billion up from $162 billion in 2004 and $124 billion in 2003.
Our import of crude oil this year is tracking at $220 billion up from $168 billion in 2004. This rise is largely because of the huge increase in the cost of crude oil to an average of $60 per barrel as a result of refinery closings on the Gulf Coast due to Hurricanes Katrina and Rita.
Consequently, our merchandise deficit in 2005 is expected to exceed $480 billion of which China accounts for over 40 percent. Even with the dramatic rise in the cost of crude oil, our trade deficit with China alone is equal to 90 percent of all our oil imports. This is a staggering and sobering statistic.
When Presidents have no vision or plan to tackle the pressing issues of our time, they fall back on Human Rights. President Bush made his recent trip to China all about the freedom of worship and the printing of Bibles. This is no doubt an important and noble undertaking. It is estimated there are up to 80 million practicing Christians in China and this number is rapidly growing. Many of the Chinese Christians are well educated and successful business people.
The second most distributed book in China today is the Bible. In the next few decades China could become the largest Christian country in the world. The Christianization of China will have a profound impact on all of us. For one thing it will deliver China out of communism and into democracy. This is certainly something to look forward to and will change many things for the better in US-China relations. However it will still take years with a dangerous and unpredictable road ahead.
When Jimmy Carter had no strategy to deal with the Soviet Union, he made Human Rights the cornerstone of his diplomacy. It took Ronald Reagan and the Reagan Doctrine (for which Dr. Jack Wheeler is credited as being the originator), to believe we could win. President Reagan then went out and did something about it.
We need a new “Reagan Doctrine” and leaders willing to fight and win the War of Trade. It is beaten into us everyday by the media, academia and traitorous CEOs that we have already lost and our manufacturing industries doomed. To believe this is to accept America is in decline and its best days over.
Let us rise above this nonsense and dispel the doomsayers. Let us regain our confidence and will to fight. Let us defend the millions around us whom need jobs and opportunities and futures for their children that only a productive America can sustain. Let us not shirk our responsibility to keep America strong and prosperous.
It may surprise many, but there are a number of actions that can immediately be taken that in the short term will have a dramatic impact to turn around our trade crisis with China.
The RMB (the Chinese currency, also called the Yuan) must be revalued to reflect its true worth. The RMB is undervalued by 40%. This simple truth can not be challenged. This makes Chinese imports significantly cheaper and American exports substantially more expensive. The Chinese Communist Government as a matter of policy uses their exchange rate to manipulate trade thus robbing millions of Americans their jobs and futures.
Under pressure from the world community the Chinese government made a high profile announcement in July to float the RMB in a trading band of 0.3 percent per day. Since then the RMB has risen against the US dollar by a mere 0.4 percent. At this rate it will take 50 years for the RMB to reflect its true value.
US Treasury Secretary John Snow this Monday issued the administration’s long-awaited currency report in which it said China did not meet the “technical requirements” to be designated as a country that is managing its currency to gain unfair trade advantages. He sited the 0.4 percent revaluation as a factor in his decision.
Although the Bush Administration obviously blinked once again, the next report due to Congress is next April. Let’s hope Secretary Snow has the guts to acknowledge the obvious and set into motion the actions that could eventually lead to significant punitive tariffs on Chinese products.
Chinese duties on American products are on average seven times more than on Chinese products entering the United States. In addition to this, there is a 17 percent Value Added Tax (VAT) that is paid on top of landed cost which includes freight and duties.
This “multiplying effect” has a huge impact on the cost of American products in the Chinese marketplace. We must insist our exports are given the same privileges as theirs. We must establish a flat tariff to land goods that eliminates the “multiplying effect” and gets rid of costly hidden barriers.
The RMB 40% under valuation and the multiplying effect of excessive duties and taxes that American products pay to enter the Chinese market means that US products today are 70 percent artificially over-priced in China. Another way to look at it, for every RMB100 that a Chinese consumer pays to purchase an American product, they should only be paying RMB30.
As an American exporter for the past 25 years I can emphatically state our sales to China would skyrocket overnight if our products were priced as they should be.
We must immediately trash the Foreign Corrupt Practices Act (FCPA) that makes it against US law to pay any sort of “facilitation fee” to foreign government officials for some trade advantage. Transparency International based in Berlin, Germany in their recently published Corruption Perception Index (CPI), ranked China as seriously corrupt.
For Americans running China subsidiaries promoting American exports or for Americans competing in China to win contracts, it is simply impossible to avoid corruption. Let American businessmen police themselves just like the Europeans, Japanese and Asians.
Get ready for the battle of the marks. In America, there are the UL (Underwriters Laboratories) safety standards and the NSF (National Sanitation Foundation) sanitary standards. UL and NSF are independent testing agencies that certify products meet the applicable specifications.
Forget about any such independence in China, which has just implemented its CCC Mark (China Compulsory Certification) to certify products being sold in its market. China and its government of “Technocrats” (over 70% of China’s political elite have graduated from engineering school, hence the term “Technocrat”) will use the CCC Mark to manage trade.
China will insist on unfair and unreasonable standards with one purpose in mind, to keep foreign products out of its market. The testing will be done by Chinese government controlled laboratories. The US government has a woeful record of protecting its exporters from such shams. The model of pretending to reduce duties while erecting walls of bureaucratic red tape was first mastered by Japan and its “non-tariff barriers”. China is replicating the model and this time we must be ready.
Provide tax incentives for American exporters. In this time of national crisis it is certainly appropriate to encourage and nurture entrepreneurs who are America’s frontline soldiers. Our European and Japanese competitors offer a number of tax and financial incentives to their exporters. This could be in the form of personal income tax exclusions for Americans living overseas that are promoting American exports, to businesses that are investing in their export infrastructure, to trade financing.
Counterfeit products produced and sold freely at markets in China and exported around the world cost Americans an estimated 750,000 jobs a year and American businesses $250 billion. The bulk of the world’s pirated material comes from China. If China for whatever reason can not close this down, then the Chinese Government must make restitution to US companies and workers being cheated because of their ineptness to govern.
Continue to invest in and build further the U.S. Export Assistance Centers. America’s back bone has always been its small businesses and entrepreneurs – whereas many of our Fortune 500s have defected to the other side in this great time of need. The world is a big and daunting place. The U.S. Export Assistance Centers and the Commercial Sections of our Embassies overseas are a huge resource in helping American exporters reach potential customers overseas. Our European and Japanese competitors get tremendous assistance and support from their governments.
The Commerce Dept.’s Gold Key program now in place is a wonderful tool for exporters to quickly find new markets and meet new customers. However the U.S. Department of Commerce is considering increasing the cost of the Gold Key program as much as 500%. This will put it out of reach by many who depend upon it and benefit most.
The Fortune 500s have bargained away the “American Dream” of millions of ordinary Americans in pursuit of their “China Dream” of short term profit opportunities. An interesting example of this is Wal-Mart. Wal-Mart’s founder, Sam Walton was staunchly supportive of his American vendors. The following is a quote from a Wal-Mart promotional piece in 1994:
“The ‘Buy American Program’ is both a commitment and a partnership”.
Today over 70 percent of items sold in Wal-Mart stores have Chinese content. Wal-Mart will purchase from China for its US stores over $20 billion in 2005 which accounts for 10 percent of our total China trade deficit. Total US exports to China in 2005 is expected to be just $35 billion.
Wal-Mart’s purchases from China are equal to 42 percent of everything China purchases from the US. If Wal-Mart were a country it would be China’s eighth largest trading partner ahead of Australia, Germany and Russia.
The “Buy American” program has vanished as well as millions of US jobs. Wal-Mart is contributing significantly to the eroding of American incomes. It is ironic with American incomes in decline because of actions of those like Wal-Mart; Americans in the future will only be able to afford the dirt cheap things Wal-Mart imports.
As President Bush arrived in China for his brief visit, Beijing announced a deal to purchase $4 billion worth of Boeing Aircraft. Let us not be fooled.
This is a variation of the old Asian nightclub trick. They invite you for a fun night on the town, get you all sloshed up and continuously tell you things you want to hear. They throw you a few crumbs to feed your ego as they pick your pockets. The Boeing deal amounts to drops in a bucket. This was only a diversionary tactic. Many in the US Government and media were dumb enough to take the bait.
Don’t get your hopes up for any changes soon if we simply follow the same muddled, non-confrontational path we have been stumbling down. Chinese President Hu offered “flexibility” but no concessions. He promised to reduce the trade deficit and product piracy but gave no specific steps.
It should be blindingly apparent by now the Chinese strategy is to offer plenty of face but no substance while perpetuating and growing our suffocating deficit. In reading tea leaves what is not said is always more important.
It is time we stop dwelling on the magnitude of the problem and implementing solutions. Contrary to what many may believe, real solutions exist. |
Are we ever going to wake up and take action?
SBD |
|
| Back to top |
|
 |
dusty
Admiral
Joined: 27 Aug 2004
Posts: 1264
Location: East Texas
|
| Posted: Sun Dec 11, 2005 1:48 am Post subject: |
|
|
In a word SBD. No.
_________________
Left and Wrong are the opposite of Right! |
|
| Back to top |
|
|
GenrXr
Master Chief Petty Officer of the Navy
Joined: 05 Aug 2004
Posts: 1720
Location: Houston
|
| Posted: Sun Dec 11, 2005 6:33 am Post subject: |
|
|
SBD, read the report again.
It is not honest.
Just another attack upon Walmart. The author assumes our country should be in the business of manufacturing what? Textiles and toasters? Screw that, America is a technology/services society and as such we must focus on education as opposed to giving the ignorant a crap job of sewing a pair of blue jeans together.
_________________
"An activist is the person who cleans up the water, not the one claiming its dirty."
"All that is necessary for evil to triumph is for good men to stand by and do nothing." Edmund Burke (1729-1797), Founder of Conservative Philosophy |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
Powered by phpBB © 2001, 2005 phpBB Group
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
