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Can you list these unfair trade practices, or is this another Humpty-Dumpty phrase where everyone just knows what it means?
"Unfair" as in focused central subsidies, and currency devaluation. Both of which we do or can do. China is simply better at it. Their political/economic systems make it easier.
"Unfair" as in focused central subsidies, and currency devaluation. Both of which we do or can do. China is simply better at it. Their political/economic systems make it easier.
Fair enough (your point, not the practices). But as pointed out earlier, China is very different from most other industrialized players, and we are not likely to bend them to international compliance simply because it suits our sensibilities. We need to deal with them as they are, and as they evolve, and not go off on stupid tangents because government and industry are more entangled for them than for us.
Can you list these unfair trade practices, or is this another Humpty-Dumpty phrase where everyone just knows what it means?
Are you joking? A little primer for you.
1). Endless tech/intellectual/corporate/research espionage. Some Chinese researchers were busted just the other week selling medical research info. to the Chicoms. From hacking to copyright theft and more.
2). Norinco uses North Korean and other slave an near slave labor.
3). Steel and other dumping......sometimes using direct ownership Chinese companies are directly subsidized or indirectly induced to sell into the US (other countries too) at predatory prices.
4). Decades of currency manipulation.
5). The Chicoms throw-up all kinds of non-tariff trade barriers on US goods as well. Generally speaking China has enforced higher taxes, often much higher, on Americans imported into China that the reverse. China enforces a 25% tariff on US cars for example. IIRC the reverse is 2 or 3%.
Well, I suspect China will take a much simpler approach. They'll just charge $1.35 for their $1.00 object, hand over the 25% tariff, and make 2 cents on the deal.
In aggregate, before the tariff, let's say China sold 100,000,000 of those widgets. After the tariff, they might only sell 75,000,000, albeit at a higher price. They will lay off about 25% of their production staff as a result.
The 25% tariff is on $200 billion of $500 billion imports from China. China exports to the US is only 20% their worldwide exports. 25% x 20% x 40% = 2% impact on China’s exports, they can easily manipulate own currency exchange rate lower by a few penny to get around this, which probably already done last year. This isn’t going to hurt China.
American consumers, on the other hand, will pay every dollar and cents of Trump tariff plus stock market jittering. China stop buying soybeans to zero, that’s $16 billion a year loss.
In aggregate, before the tariff, let's say China sold 100,000,000 of those widgets. After the tariff, they might only sell 75,000,000, albeit at a higher price. They will lay off about 25% of their production staff as a result.
If it was a centrally favored business I wouldn't worry at all.
China and Chinese do not share our western sense of "fair play." Intellectual property theft is encouraged, rampant and not seen as something wrong.
Attempting to enforce patent protection in China is nothing like attempting to enforce it in the USA. In the USA, you go to court. In China, you have a meeting behind closed doors with a government magistrate or mandarin. There is nothing like what we would consider "due process."
The dominant operating system in used on PCs in China is Windows. The ration of licensed copies to pirat4ed copies asymptotically approaches zero. Chinese don't see that as a bad thing. They don't see it as doing anything wrong.
India isn't far behind. I recall a political cartoon in the Times of India; it showed a plaintiff in front of a judge sitting on high, and this judge was speaking. The text: "OK, so you've proved this official took bribes, steered official business to family members, embezzled large sums of money, punished his enemies, etc. But you said he's corrupt. I don't see any corruption. Where is this corruption you speak of?"
There is a very influential book in China regarding intellectual property including patents, trademarks, copyrights, licenses, trade secrets, etc. This book hasn't been translated into English as of yet, but has been distributed to mandarins across the country. The book presses the case that intellectual property was the West's way of attempting to suppress Chinese economic development.
Famed Intel CEO Andy Grove once told me, "China will begin to respect intellectual property (IP) as we know it in the West about the same time China has significant IP that they need to protect."
This would all be fixed if we didn't have any trade relations with China....large corporations would complain, but the average citizen would survive.
Uh... right.
Go around your house and count the items stamped MADE IN CHINA. Do a search for equivalents made in the US or by any other 'spectable trading partner.
Survive away.
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