Dunkirk101
05-21-2007, 06:23 AM
This is NOT good for the US :bombout:
U.S.-China gap widening
By Scott Wilson, Times Staff Writer
May 1, 2007
Concerned by the fast-growing trade deficit with China, U.S. lawmakers are pushing for sanctions and penalties to slow down the Chinese export juggernaut. But many economists and other experts warn that political action may misfire and only hurt American consumers.
Here's a primer on the issue.
How big is the trade deficit with China?
In 2006, the U.S. imported goods worth $287.77 billion from China and exported goods worth $55.22 billion to China, according to the Foreign Trade Division of the U.S. Census Bureau. Do the math and you get a $232.55-billion trade deficit.
Is that a lot?
Yep. In fact, it's the biggest trade deficit the U.S. has ever had with one country. Second place in 2006 went to Japan, with a paltry $88.44 billion.
Most startling is how fast the deficit is growing — it's up 180% in the last five years. Notably, U.S. exports to China grew by 188% over the same period, a rate that would normally be considered terrific. But imports from China have been growing nearly as fast. With exports just one-fifth of imports, they would have to grow five times as fast just to keep the trade deficit from growing.
It's been about 20 years — April 1986, to be exact — since the U.S. actually had a trade surplus with China.
It's not just the U.S. that is getting Chinese exports. The World Trade Organization reported last month that China had surpassed the United States to become the world's second-leading exporter, after Germany.
What are we importing from China?
The biggest categories are computers and related electronics, cellphones, shoes, video games, TVs, DVD players and toys.
What are we exporting to China?
Our biggest exports to China are aircraft, computer circuits and microprocessors, soybeans, cotton, copper waste and scrap, and aluminum waste and scrap.
Why are imports from China rising so fast?
That's the $232-billion question. Part of the credit goes to China's rapid industrial modernization and cheap labor. China is churning out more goods than ever using workers that earn an average wage that is one-thirtieth of that in the U.S. This helps keep prices low.
But some say China is cheating. Many in Washington, including some members of Congress, Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke, complain that China keeps its currency, the yuan, artificially low, thus keeping prices down. Some economists believe the yuan may be undervalued by as much as 40%.
Also, some U.S. manufacturers say China's companies are heavily subsidized by the government, giving them an unfair advantage. And groups such as the AFL-CIO and China Labor Watch have complained that Chinese workplace standards are lax, allowing underage labor and forcing workers to toil for long hours without overtime.
Is the trade deficit with China a bad thing?
It is, according to businesses, labor groups and members of Congress who blame the Chinese for the loss of 2.8 million U.S. manufacturing jobs in the last six years.
Since 2001, employment in U.S. textile mills and apparel manufacturing have both dropped by half, while jobs at toy makers have dropped by 40% and furniture makers by 20%.
See HERE (http://www.latimes.com/business/la-fi-chinatrade1may01,1,1513201.story?coll=la-headlines-business) for details :(
U.S.-China gap widening
By Scott Wilson, Times Staff Writer
May 1, 2007
Concerned by the fast-growing trade deficit with China, U.S. lawmakers are pushing for sanctions and penalties to slow down the Chinese export juggernaut. But many economists and other experts warn that political action may misfire and only hurt American consumers.
Here's a primer on the issue.
How big is the trade deficit with China?
In 2006, the U.S. imported goods worth $287.77 billion from China and exported goods worth $55.22 billion to China, according to the Foreign Trade Division of the U.S. Census Bureau. Do the math and you get a $232.55-billion trade deficit.
Is that a lot?
Yep. In fact, it's the biggest trade deficit the U.S. has ever had with one country. Second place in 2006 went to Japan, with a paltry $88.44 billion.
Most startling is how fast the deficit is growing — it's up 180% in the last five years. Notably, U.S. exports to China grew by 188% over the same period, a rate that would normally be considered terrific. But imports from China have been growing nearly as fast. With exports just one-fifth of imports, they would have to grow five times as fast just to keep the trade deficit from growing.
It's been about 20 years — April 1986, to be exact — since the U.S. actually had a trade surplus with China.
It's not just the U.S. that is getting Chinese exports. The World Trade Organization reported last month that China had surpassed the United States to become the world's second-leading exporter, after Germany.
What are we importing from China?
The biggest categories are computers and related electronics, cellphones, shoes, video games, TVs, DVD players and toys.
What are we exporting to China?
Our biggest exports to China are aircraft, computer circuits and microprocessors, soybeans, cotton, copper waste and scrap, and aluminum waste and scrap.
Why are imports from China rising so fast?
That's the $232-billion question. Part of the credit goes to China's rapid industrial modernization and cheap labor. China is churning out more goods than ever using workers that earn an average wage that is one-thirtieth of that in the U.S. This helps keep prices low.
But some say China is cheating. Many in Washington, including some members of Congress, Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke, complain that China keeps its currency, the yuan, artificially low, thus keeping prices down. Some economists believe the yuan may be undervalued by as much as 40%.
Also, some U.S. manufacturers say China's companies are heavily subsidized by the government, giving them an unfair advantage. And groups such as the AFL-CIO and China Labor Watch have complained that Chinese workplace standards are lax, allowing underage labor and forcing workers to toil for long hours without overtime.
Is the trade deficit with China a bad thing?
It is, according to businesses, labor groups and members of Congress who blame the Chinese for the loss of 2.8 million U.S. manufacturing jobs in the last six years.
Since 2001, employment in U.S. textile mills and apparel manufacturing have both dropped by half, while jobs at toy makers have dropped by 40% and furniture makers by 20%.
See HERE (http://www.latimes.com/business/la-fi-chinatrade1may01,1,1513201.story?coll=la-headlines-business) for details :(