Has Trade with China helped or hurt the US?

[Vigilante]

@Rivoli you might find some people are open to the basic premise that unfettered trade with China is a net negative, even if they don’t agree with all your conclusions.
That said, you communicate your ideas in a way that alienates instead of persuades. Calling @Vigilante names would be an example.
Have you read anything by Scott Adams? He a fan of the president’s persuasion ability and a very insightful person on how to communicate in a way that persuades instead of alienates.

There are a ton of people on the forum that agree with his basic positions, but that can never be mobilized because even after 337 posts, he still doesn't understand that the FastLane Forum operates with a different set of decorum. This place is an oasis from the rest of the wild web. We foster ideas, harness entrepreneurship, and springboard ideas. Along the way, we absolutely call out a lot of bullshit, but generally for the benefit not only of the OP but of people that come along behind us.

Before his inevitable banning, I can only hope what he takes with him is a recalibration. He's a super intelligent guy, but needs to spend some time at Toastmasters. When I was at Walmart, they sent me through Dale Carnegie class. One of the best takeaways from that paid "MBA in 8 weeks" was the book
https://www.amazon.com/dp/0671027034/?tag=tff-amazonparser-20

Best wishes @Rivoli. May you find what you are looking for out there. There are a million places for you and others to wage flaming ideological and political diatribes. This just isn't one of them. You've violated nearly every rule the forum has, and @MJ DeMarco has tolerated it hoping you'd calm down. You appear to be ramping up your personal assaults. Your most recent sparring partner is no friend of mine, but even he knows when enough is enough.

I wish you success. I wish you peace. And I wish you health.

 

[Rivoli]

Has trade with China hurt or help the US?

Three points need to be understood to explain this.

1. Why did Jobs leave?
2. Why do we need them?
3. How do we get them back?

Question 1: From the early 1900’s to around 1976, The US was the worlds factory. Why did the US dismantle its manufacturing and send it to China? What changed in 1976?

Part 1: China’s push

From 1949, to 1976, the number one issue of the Chinese communist party was feeding and employing its 100’s of millions of people. After trying communism for two decades and failing, a man named Deng Xiaoping, a leader of the CCP, initiated reforms to create a mercantilist society with some markets, with the government still taking ownership in the critical industries, subsidizing them with government investment with the end goal not of creating capitalist companies, but maximum employment.

Around the same time Nixon met with the CCP, to normalize relations.

This is key. This was not a poor nation opening itself up to trade. If that was the case, China would never have became what it did. There are plenty of poor countries with millions of cheap laborers.

The key is the mercantilist element. A corporation that is owned by its country with unlimited government funding with the sole goal of maximum employment.

Part 2: US free trade retardation

That was only one side of the coin. The nail in the coffin was free trade. Since the 1950’s, the competence of the US government has generally been in decline. It’s worst incompetence is in free trade. Free trade is supposed to be companies competing with other companies across the world to produce the lowest prices.

But when U.S. Steel competes with Baowu steel, its not free trade. It’s a privately owned (all though traded publicly) company competing with the entire Chinese government. Baowu could take losses without end. To the CCP, Baowu losing market share is the equivalent of increasing starvation and unemployment.

Part 3: China’s assault on our IP.

China is the worlds thief, stealing IP from our companies, spying, hacking (remember, they are the ones behind the equifax breach). The US is the leading innovator in the world, and gets no benefit of it because China steals without regard to international law.

The US, is a “free trade” economy, putting its companies against the Goliath of the Chinese communist party and losing.



Question 2: Why do we even need these jobs? Why do we need factories?


Part 1: Real wage growth


From the early 1900’s to around 1976, The US was the worlds factory. When Apple started making computers, they made them here in California. When you have a factory, you don’t just need assembly workers, you create an entire set of jobs. Accountants, engineers, product designers, marketers etc. When you have a restaurant all you need are a couple of high school drop outs. When you have a manufacturing economy, you have built in incentives for higher value degrees.

Look at economies where manufacturing is a leading sector of economy, and look at the % of grads graduating with engineering degrees (Germany, China etc). Now look at the US in the 1950s-1970’s vs today.

While previously 1900-1976, wages and standard of living was on a ceaseless rise. Now, real American wages have been flat for the last 40 years. Housing, education, and all other costs have increased, while the american worker is poorer than ever. Where before most people would buy a house out of college, now most millennials are basically serfs, who will never own a house and are becoming communist in droves.

Look at this chart of real wage growth. What happened in the 1970s? Dengs Reforms and the opening of China!

If us business owners do not start combating China, along with the smart people in office like Peter Navarro. Mark my words, millennials will be the most communist generation in history, and they wont be going to increase your taxes. They will be going for your assets.

Free trade has created a very raw deal for the average American, they think this is capitalism, when it reality its an crony capitalism where policy makers push “”””free trade”””” while off shoring jobs.

Part 2: Security

There aren’t just economic costs to allowing China’s trade war on us to continue. Two sectors are of critical importance:

1. Rare earth minerals: China has a stranglehold on the entire world tech economy. They have gutted and impoverished competition in this market with dumping prices to the point they are 90% of the world supply chain. This is extremely dangerous
2. Drugs: 90% of drugs are made in China. Penicillin isn’t even made in the USA now. China could cut us off in an emergency and kill us.

Question 3: How do we get them back?

1. End “””free trade”””, remove China’s PNTR status immediately. Tariff every single good from China that comes from a subsidized source and enact REAL free trade. Companies can compete with companies, but any state owned company is tariffed to oblivion. Do NOT listen to “””economist”””. They will say this will hurt “”American companies””””. They are right. This will hurt Wall Street backed corps who sold their souls to China, and have no problem with wages being crushed and China sucking the wealth out of the US. But when they say this remember two things 1) to look at that graph of real wages^ and ask yourself, how bad does it have to get to realize before we could have a serious discussion about “”””free trade””” and 2) since Trump has started tariffs, real wage growth has increased 3% in the US.
2. Mandate production of critical materials in the USA. 100% of drugs should be made here. Open up Mountain Pass and invest in it heavily, to bring back 100% of rare earth ores here in USA.

Do not fail for the “jobs will never comeback” meme. The data shows otherwise. And after implementing protectionist policies, they will come back.

 

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[G-Man]

@Rivoli you might find some people are open to the basic premise that unfettered trade with China is a net negative, even if they don’t agree with all your conclusions.
That said, you communicate your ideas in a way that alienates instead of persuades. Calling @Vigilante names would be an example.
Have you read anything by Scott Adams? He a fan of the president’s persuasion ability and a very insightful person on how to communicate in a way that persuades instead of alienates.

 

[ygtrhos]

Most of your arguments are pointless. Especially "There are plenty of poor countries with millions of cheap laborers.".

There are not many plenty of poor countries with millions of cheap laborers. There is China, India, Pakistan and Indonesia. Vietnam, Egypt, Turkey etc. are not really in a position to offer "millions of cheap laborers". There is a reason why China stuck out of these.

1. You are referring to an age before 1976 as America's golden age, where there was no Internet for masses, information was not so fluid and societies were not this connected.

We live in 2020, where everyone has access to any kind of information. Now U.S. and other industrialized countries like Germany, UK, France do not have that big of a know-how advantage anymore like previously. Where you are born matters less than in 1976.

2. Globalization did not happen because U.S. was dumb and you guys allowed it.

Globalization happened, because it could happen and it served capitalistic interests of people.

Manufacturing went away, because it could go away. Service jobs did not go away, because I would rather buy my insurance in person from Jack than on the phone from Chang or Ravanaphutam with broken English.

3. The other reason (and the reason why China and India could stick out) was that these markets are huge. Almost every second person on the planet is either Chinese or Indian. If they earn money, they can consume. If they can consume, they open up new markets, new opportunities for the benefit of the whole world.

The reason, why China has been better than India was because it has a more meritocratic method of governance. It is ruled by an educated elite of Communist Party, rather than democratically elected salesmen. You cannot make populism in China, because it is an dictatorship.

Also in China, there are not really high regards to human life. As a person, you are just an instrument for the government. If communists say, you cannot move to another city and work there, you just have to obey, or you get detained. So people can actually be marketed.

There are many more things to this like culture and so on, but these are the two things that stick out.

Summary: Many of the unfair advantages in the world vanished because of new technologies like Internet, vaccines etc. and other countries could do some of the low-quality stuff that westerners were too expensive for.

Now Jack has to work as much as Chang, because Jack does not have unfair advantages over Chang like his father or grandfather did.

And Jack complains on entrepreneurial forums because he now sees that he is as dispensable as Chang was in 1976, if Chang works harder or adapts to changes in the world more swiftly.

Jack also should not open up threads like "Chinese are our enemy" because Fastlane Forum is a global thing and Chinese, Indian or Indonesian (or in my case, Turkish) people hang around here as well. The world does not consist of United States only.

Jack should sit down, adapt to the world, build a work ethic and work.

 

[Tourmaline]

This seems like a fundamental problem of incentives. No amount of words will matter as long as the incentives continue to gives businesses a reason to use china as cheap labor.

 

[Kevin88660]

Its not even Chinese companies vs U.S. companies. Chinese are more like contractor working for U.S. MNC. Think of the Taiwanese Foxconn which provides our Apple phone parts. Their factories are in China.

Why China not elsewhere? Do you have an army of young grade 10 graduates (from village who moved onto cities to find jobs) willing to work 6 days a week, 12 hours a day for 8k U.S. dollar a year?

As cost is rising in China, Chinese factories are relocating to India and Vietnam for lower cost but many of the times the lower cost come with lower worker productivity and poorer infrastructure.

But with China moving up the value chain they are capable of doing more. They have many engineers that can help them build great companies like Huawei.

Whether China is a friend than a foe depends on who you are.

Billionaires wanted to suck up to China for their huge market potential.

Millennials...their issue is not China. They are not waiting for Chinese business owners to move the factories from Vietnam to U.S. so that they can make Nikki shoes. They are not waiting for jobs that even Chinese do not want to do. Therefore I totally disagree with OP’s view in drawing relationships to both. Millennials have too much invested in a middle class aspiration (script?) that no longer exist for most people. I agree that they will be grabbing the assets of the rich for sure if there isn’t a new safety net provided.

If you are in the Pentagon, indeed you could be worried about China. China is the only potential candidate to topple U.S. leadership like how U.S. took it away from United Kingdom...

 

[Rivoli]

There are a ton of people on the forum that agree with his basic positions, but that can never be mobilized because even after 337 posts, he still doesn't understand that the FastLane Forum operates with a different set of decorum. This place is an oasis from the rest of the wild web. We foster ideas, harness entrepreneurship, and springboard ideas. Along the way, we absolutely call out a lot of bullshit, but generally for the benefit not only of the OP but of people that come along behind us.

Before his inevitable banning, I can only hope what he takes with him is a recalibration. He's a super intelligent guy, but needs to spend some time at Toastmasters. When I was at Walmart, they sent me through Dale Carnegie class. One of the best takeaways from that paid "MBA in 8 weeks" was the book
How to Win Friends & Influence People: Dale Carnegie: 8937485909400: Amazon.com: Books

Best wishes @Rivoli. May you find what you are looking for out there. There are a million places for you and others to wage flaming ideological and political diatribes. This just isn't one of them. You've violated nearly every rule the forum has, and @MJ DeMarco has tolerated it hoping you'd calm down. You appear to be ramping up your personal assaults. Your most recent sparring partner is no friend of mine, but even he knows when enough is enough.

I wish you success. I wish you peace. And I wish you health.

But it starts with us. There are 7 million employing businesses in the US. We are the business owners. We owe it to our country to re-think this stance we’ve had. I spent time righting this specifically to post here. We need to wake up as entrepreneurs to the cause and effect of what we’ve been doing sourcing things on alibaba to sell on Amazon.

We can shut our eyes to it, but its still goin to happen.

Is anything I’m saying really that inflammatory? Maybe it really is pointless to talk about these things. If this isn’t worthwhile I’ll just go back to lurking I guess.

 

[ZF Lee]

if you go by the numbers, everyone appears to win from globalization... some people just win more.

Every single country is wealthier.

The number of people living in extreme poverty (defined as living on one dollar per day, inflation adjusted - as always) in the world declined by 80 percent between 1970 to 2006.

View attachment 31722

View attachment 31723


No. That's a myth.

You would like George Gilder's words on the matter.
I sub his free email newsletter, and he talks a lot about the US-Chinese relationship.

His solution on the matter in a few points:

1. Learn from China, on how it scales tech and does business.

2. Innovate on what is learned, and come up with better things to create new advantages.

3. An overall more innovative, peaceful and productive globe.

China is not 100% perfect, but those imperfections may give US entrepreneurs more ideas to continue innovating.

But if we are not to keep all manufacturing eggs in one basket, such as China's, might as well not do it.

EDIT: Found this article that quotes some Gilder, and shares his views.

If China Were An Enemy, It Wouldn't Be Improving Us So Much With Its Exports

Correcting some of the many American myths about China.

www.forbes.com

I like this quote on IP theft:
"To all this, the allegedly wise among us will say that “you just don’t understand, the Chinese are stealing our IP and business secrets. They’re not our friends."

To which I’ll respond that the lifting of ideas is as old as commerce is, that it’s the norm among all innovators; whether Thomas Edison, Henry Ford, the late Steve Jobs, Bill Gates, and every dynamic industry that’s ever prospered.

Show me a booming industry, and I’ll show you endless imitation.

Crucial here is that as any entrepreneur will make plain, most ideas fail, thus rendering what’s stolen worthless. But more important for this discussion is the basic truth that genius can rarely be stolen. "

 

[Kevin88660]

Has trade with China hurt or help the US?

Three points need to be understood to explain this.

1. Why did Jobs leave?
2. Why do we need them?
3. How do we get them back?

Question 1: From the early 1900’s to around 1976, The US was the worlds factory. Why did the US dismantle its manufacturing and send it to China? What changed in 1976?

Part 1: China’s push

From 1949, to 1976, the number one issue of the Chinese communist party was feeding and employing its 100’s of millions of people. After trying communism for two decades and failing, a man named Deng Xiaoping, a leader of the CCP, initiated reforms to create a mercantilist society with some markets, with the government still taking ownership in the critical industries, subsidizing them with government investment with the end goal not of creating capitalist companies, but maximum employment.

Around the same time Nixon met with the CCP, to normalize relations.

This is key. This was not a poor nation opening itself up to trade. If that was the case, China would never have became what it did. There are plenty of poor countries with millions of cheap laborers.

The key is the mercantilist element. A corporation that is owned by its country with unlimited government funding with the sole goal of maximum employment.

Part 2: US free trade retardation

That was only one side of the coin. The nail in the coffin was free trade. Since the 1950’s, the competence of the US government has generally been in decline. It’s worst incompetence is in free trade. Free trade is supposed to be companies competing with other companies across the world to produce the lowest prices.

But when U.S. Steel competes with Baowu steel, its not free trade. It’s a privately owned (all though traded publicly) company competing with the entire Chinese government. Baowu could take losses without end. To the CCP, Baowu losing market share is the equivalent of increasing starvation and unemployment.

Part 3: China’s assault on our IP.

China is the worlds thief, stealing IP from our companies, spying, hacking (remember, they are the ones behind the equifax breach). The US is the leading innovator in the world, and gets no benefit of it because China steals without regard to international law.

The US, is a “free trade” economy, putting its companies against the Goliath of the Chinese communist party and losing.



Question 2: Why do we even need these jobs? Why do we need factories?


Part 1: Real wage growth


From the early 1900’s to around 1976, The US was the worlds factory. When Apple started making computers, they made them here in California. When you have a factory, you don’t just need assembly workers, you create an entire set of jobs. Accountants, engineers, product designers, marketers etc. When you have a restaurant all you need are a couple of high school drop outs. When you have a manufacturing economy, you have built in incentives for higher value degrees.

Look at economies where manufacturing is a leading sector of economy, and look at the % of grads graduating with engineering degrees (Germany, China etc). Now look at the US in the 1950s-1970’s vs today.

While previously 1900-1976, wages and standard of living was on a ceaseless rise. Now, real American wages have been flat for the last 40 years. Housing, education, and all other costs have increased, while the american worker is poorer than ever. Where before most people would buy a house out of college, now most millennials are basically serfs, who will never own a house and are becoming communist in droves.

Look at this chart of real wage growth. What happened in the 1970s? Dengs Reforms and the opening of China!

If us business owners do not start combating China, along with the smart people in office like Peter Navarro. Mark my words, millennials will be the most communist generation in history, and they wont be going to increase your taxes. They will be going for your assets.

Free trade has created a very raw deal for the average American, they think this is capitalism, when it reality its an crony capitalism where policy makers push “”””free trade”””” while off shoring jobs.

Part 2: Security

There aren’t just economic costs to allowing China’s trade war on us to continue. Two sectors are of critical importance:

1. Rare earth minerals: China has a stranglehold on the entire world tech economy. They have gutted and impoverished competition in this market with dumping prices to the point they are 90% of the world supply chain. This is extremely dangerous
2. Drugs: 90% of drugs are made in China. Penicillin isn’t even made in the USA now. China could cut us off in an emergency and kill us.

Question 3: How do we get them back?

1. End “””free trade”””, remove China’s PNTR status immediately. Tariff every single good from China that comes from a subsidized source and enact REAL free trade. Companies can compete with companies, but any state owned company is tariffed to oblivion. Do NOT listen to “””economist”””. They will say this will hurt “”American companies””””. They are right. This will hurt Wall Street backed corps who sold their souls to China, and have no problem with wages being crushed and China sucking the wealth out of the US. But when they say this remember two things 1) to look at that graph of real wages^ and ask yourself, how bad does it have to get to realize before we could have a serious discussion about “”””free trade””” and 2) since Trump has started tariffs, real wage growth has increased 3% in the US.
2. Mandate production of critical materials in the USA. 100% of drugs should be made here. Open up Mountain Pass and invest in it heavily, to bring back 100% of rare earth ores here in USA.

Do not fail for the “jobs will never comeback” meme. The data shows otherwise. And after implementing protectionist policies, they will come back.

There are push and pull factors.

You forgot to mention unions that killed the manufacturing jobs. It is the deal that works for both until it doesn't. China gets the technology and capital investment. U.S. MNC get their high profit margin. U.S. household get the cheap goods that drive inflation low. Chinese trade surplus and turned into treasury purchase and drive deficit spending with low interest. In other words China played her role in affordable social welfare and low cost of living for many Americans.

Again why China. In one aspect It’s the replication of what many Asian economies did in the past. Move rural population urban factories. Capital always look for low cost centers. First Japan, then Asian dragons (Korea, Singapore and Taiwan), then Tiger economies, then China...

In another aspect China didn’t start from zero. Before Deng’s reform China already had decades of public education that eradicated illiteracy and had women participation in the workforce (which India yet has to achieve). A young population and people were motivated to work hard to improve their families living standard, which was sheer poverty back then.

The problem for U.S. was special interest aristocrats who block all reforms against them. Union is one. Retirees another one whose high social security payout is bankrupting the nation. Military industrial complex..Medical and pharmaceutical industries...China is hardly an issue.

 

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[hellolin]

So in this thread, we have someone that is not just against global free trade, but also suggested paying retail workers as much as a union steel worker, and also raise massive tariffs on one of our prime trading partners in the world.

MJ, am I in the T_D or Sandersforpresident sub on reddit, or am I on the fast lane forum? Can't actually figure this out now.

 

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[ChrisV]

Top5% are the winners of globalization

if you go by the numbers, everyone appears to win from globalization... some people just win more.

Every single country is wealthier.

The number of people living in extreme poverty (defined as living on one dollar per day, inflation adjusted - as always) in the world declined by 80 percent between 1970 to 2006.

let me ask like this, would you agree the middle class has been destroyed in the US? Would you agree with that statement?

No. That's a myth.

 

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[hellolin]

God if this is what the current voting political thinking about the world then we are F*cked, as consumers and citizens of the most powerful country in the world.

I actually grow up in socialist China, trust me most the young people here in the US are way too consumerist and soft for any kind of real communist revolution. They are best doing what they do right now, laying down and whine, while the best of them, the top 20%, are getting every single thing they want in life with the best of times human kind ever have.

 

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[Rivoli]

Edited a third time to remove any reference of “enemy”, because @Vigilante doesn’t think a discussion on China should be allowed.

 

[Rivoli]

@Rivoli you might find some people are open to the basic premise that unfettered trade with China is a net negative, even if they don’t agree with all your conclusions.
That said, you communicate your ideas in a way that alienates instead of persuades. Calling @Vigilante names would be an example.
Have you read anything by Scott Adams? He a fan of the president’s persuasion ability and a very insightful person on how to communicate in a way that persuades instead of alienates.

Let me just say I’m joking about Vigilante being a CCP commissary if that needs explained..obviously he is not.

But I have to say we have to really sober up about this issue. We are really in a geopolitical struggle with a very formidable enemy.

China wants to eat our lunch, and not only that, most of the flaring up of issues can be traced back to this real issue of wage growth.

I think the most dangerous aspect isn’t just the trade war. Its the interior affects. Theres a reason millennials vote for Bernie Sanders and we need to fix this issue before they have even more reason to hate capitalism, before its too late.

 

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[ChrisV]

Chris, my chart is REAL WAGES adjusted for inflation. Your’s isn’t.

For most U.S. workers, real wages have barely budged in decades

Adjusted for inflation, today's average hourly wage has about as much purchasing power as it did in 1978. Most wage increases have gone to the highest earners.

www.pewresearch.org

Yes that chart definitely is adjusted for inflation. It's in constant 2011 dollars.

You said it was "wage growth."

Look at this chart of real wage growth. What happened in the 1970s? Dengs Reforms and the opening of China!

That's a year-over-year difference from the last.

Think of if as if I'm measuring the growth of a plant every week. There are two ways to measure that. How tall it is, and how much it grew (growth) in comparison to the last time it was measured.

How tall: 4 inches, 7 inches, 9 inches, 11 inches, 12 inches
Daily difference: 4 inches, 3 inches, 2 inches, 1 inches.

The reality is that the plant is still growing, but it's just growing at a different rate.

My chart is the actual size, your chart is the weekly difference.

All that chart shows is that the rate of growth slowed a little, but people were still significantly richer.

 

[Rivoli]

@Rivoli I think this might be the chart you're looking for:

GDP per capita adjusted for price changes over time (inflation) and price differences between countries – it is measured in international-$ in 2011 prices

View attachment 31716

I wrote a thread on this not too long back

NOTABLE! - MINDSET - Required viewing: Why creating value is a *moral* imperative - Jonathan Haidt on the power of Capitalism

This was one of the most life changing talks I've ever seen. I think it should be required viewing for any Fastlane Entrepreneurs. Most people (even fastlaners) don't have an idea as to the shear magnitude of how utter miraculous capitalism is. I was always a believer of Capitalism, but when you...

www.thefastlaneforum.com

I would read Steven Pinker's Enlightenment Now (or at least watch this talk)

View: https://www.youtube.com/watch?v=piUqV0xo8us

That graph is meaningless to my point though. The US has gotten richer, but instead of the average person being a capitalist and participating in that increase, its all gone to the corporatist who can off shore jobs to China.

Thats why wealth inequality is so bad. The top makes money off of this scheme while the working class people have to compete with the CCP’s state owned companies.

You don’t pick that up in per capita analysis averages, because companies like apple are getting richer and throw off the average.

You have to look at real wages to see the story.

 

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[Tourmaline]

Which is about as good as it gets, and what is natural. The rich have far more leverage, and thus will naturally get richer at higher multiples. At least without government intervention.

But as long as the poor are also getting richer, to me all is well.

Income inequality is not inherently bad. It's just a stat. And an easy scapegoat for populists.

 

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[Rivoli]

Which has gone up an average of 15K/year.

Which is exactly what I said.. the rich are getting richer, and the poor are also getting richer.

Chris, you’re giving up.

look at the relational growth for all sectors preopening of China and post. look at the relative growths before and after.

the Top5% are the winners of globalization. That’s what I’ve been saying. The top 5%growth is way beyond the middle class.

let me ask like this, would you agree the middle class has been destroyed in the US? Would you agree with that statement?

I am not a communist, obviously. I’m just saying if we do not check this trend, the reaction to it will kill us all. Bernie sanders will look like Ayn Rand compared to what’s in the pipeline if this trend continues. And it all goes back to China!

 

[ZF Lee]

China literally just imitates or steals IP to grow...so not much to do there huh? Don’t even know about forced tech transfer or IP theft huh lee?

I know about these things. Yeah, it happens, especially forced tech transfer.

However, developing countries (such as post-Mao China) might need the new tech knowledge in order to produce more advanced goods.

Otherwise, they stay stuck at the low-cost labor and low-value goods level, and when they have to import more high-end products from outside, they burn themselves out by paying more.

Every country needs to grow and improve. Why not China?

Of course, any foreign investor that hands in his money (and knowledge) to grow a country's economy will create new competitors for himself.

The solution here is to ensure the investor gets paid, be it in market share or some dominance in certain sub-sectors (e.g. chips in Chinese smartphones/tech). And it's not for every business to enter China.

A more detailed article on this:

China's forced technology transfer is actually a pretty good idea

China may not need to require foreign investors to share their trade secrets anymore, but other developing countries should give it a try

theweek.com

Peter Thiel says the US is about 6 months ahead of China - meaning every time the US comes up with something, the Chinese will rip it off within 6 months.

I think Thiel is simply summarizing it in one statement.

Not everything, especially high-value products like tech or medicines, can be ripped off 100% in 6 months.

There's lots of testing and trials to be done.

Even if the Chinese knew the US have already validated the product hypothesis, and basically did all the lab work for them, they still have to modify and adjust them to their Asian markets. And by then, it may become an entirely different product that doesn't have to clash with the US.

Kinda kills the innovation drive when the CCP is hacking Lockheed Martin 24/7 huh? What are you even talking about man?

Instead of shooting wars, we should be able to settle differences in commerce.

As for the Lockheed hacking, I guess that means more need to toughen up the security.

BTW, innovation doesn't just reside in Lockheed alone, its military ties aside.

Just because one corporation gets hit, doesn't mean that innovation gets wiped out Death-Star style.

 

[Kevin88660]

Kevin, We could either take factory jobs back, union or non union, or we can deal with another 30 years of this de-industrialization, let millennials continue to be Russian serfs with no capital, and I promise you we will have reaped the whirlwind when Bernie Sanders 2.0 comes, not to raise taxes on us, but to tax ASSETS.

US households get cheap goods Is not better than US househoulds get good paying jobs and can actually afford houses.

Let me ask you, how far behind are millenials on home buying vs boomers and how do YOU explain that in you’re world view?

I just do not thinking that is the cure.

If you ban imports so that All americans can buy made in America goods. It is already an indirect tax

Secondly it is unlikely that the millennials are interested in manufacturing jobs.

A UBI is much better with minimum market distortion. Yes there will be taxes. But it is a lot less damage to the global economy.

 

[ygtrhos]

@Rivoli

You are still making arguments as if the United States can really isolate themselves from the world, put up barriers and can sit there in wealth while ruling the other countries.

You talk as if the whole world is dependent on United States or something. That is absolutely not the case.

EVERYBODY DEPENDS ON EVERYBODY. The whole world is way more integrated and global now. The world is a huge village of people, we do not live in times of Monroe Doctrine or Cold War anymore.

On long-term, you can only become North Korea by isolating yourself.

 

[Deleted78083]

Feeling lazy so i ll say it benefitted the consumer (cheaper products) but ultimately hurt the state (jobs went away, commercial balance deficit, etc). Although, had it not been China, it would have been another country. Pakistan, India and certain African countries are next to become the next China.

 

[ChrisV]

"Why can't we have the same jobs those white kid's parents had in the 50's america"

And if you read his arguments even further he thinks that the US was wealthier in the 1950's than it is in 2020, which is outrageous. The USA is significantly wealthier in 2020 than it was in 1950.

And the quality of life has risen on every measure.

 

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[ChrisV]

It's really simple. I have a time machine.... You can either go back to 1950 or 2050...no matter what income group you were in you would have a better quality of life in 2050 due to technological advances.

Imagine living in a home in 2020 with a black and white television, no internet, bare-bones telephones lines, and medicine from the 1950s. You can live that way in 2020 with a freaking $10,000/yr salary. The quality of life was not higher.

 

[Kevin88660]

you’re saying it’s bad to want millennials to work in factories MAKING THINGS but it’s good to just pay them for free.

Asset enhancement does not cause as much market distortion.

Market distortion like minimum wage, trade tariff, cause deadweight loss-inefficient production and lower quantity

I rather pay more tax to government than to pay a 6000 dollar I phone. Nothing is free. Be prepared to triple your daily expenses and business expenses since you cannot outsource.

It is basic economics. I haven't even factor in retaliation tariff that will lead to loss of export business for U.S. business.

Fascism rose in Germany and Japan because their business cannot have market access. UK and United States adopted protectionist trade policy after the great depression.

 

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[Kevin88660]

LOL! So unsubsidized US company SHOULD be able to compete with a 14 trillion dollar state backed corporation?

You’re not even being logical. You’re in Lalaland. Free markets have already shown they cant beat a state influenced market place. If they could Chinese wouldn’t be the dominate steel producer in the world. It’s not a fair fight.

When a bottom line doesn’t matter, you cannot win. It’s not two entities competing to make profits. One is competing for profit while the other is only focused about maximum unemployment.

The Chinese house of cards will collapse, but by then how many working Americans are going to be deprived of the jobs their parents got?





We’re not supposed to be political here, but I’ll just say this. I’m a first generation non-white immigrant. Look up what president has had the least black and Hispanic unemployment in history.

You‘ll fine that president is on the exact path I’ve been talking about.

The white collar salary in US is five x of China. The blue collar job salary is around 10x. Remove all state subsidy it wont make different in the productivity/cost gap.

The Trump trade war direction is not the solution. You can ban Chinese imports it will be replaced by Indian/Mexico..

The world needs greater integration not fragmentation. Instead we should be talking about RMB revaluation. That will make Chinese cost higher but also make them much more wealthier, something their manufacturing industry elites might not be happy but their people are very happy to accept-Remember Japan who went buying spree in U.S in the 80s. There should be a common world Minimum standard on labor and environment because no one can competes against exploitation and pollution. When wages and cost go higher in developing countries U.S. millennials can say “Hey we can figure out if I can just pack my bag and move to China to work because that is where the manufacturing network is in Shen Zhen.”

 

[Kevin88660]

LOL. I’ve imported things from China. My costs have risen since I started setting up supply chains here. How is it in my interest?

My point is the US is on a dark path, and the business community needs to change things To become capitalist again.

Manufacturing is very important shitty job that business owners and workers tend to avoid.

From a business owner point of view, why make stuffs when you can flip properties? Suppliers disruption, rental increase and difficult unions, anything those goes wrong can crush your margins which is not high to begin with. From a worker’s pov, why work in assembly line when you can work as an analyst in a major corporation? That’s why you took up the student loan and get the degree right.

There is a reason why manufacturing Center moved from Uk, then to U.S. then to Japan, transited with dragon and tiger Asian economies (Singapore, Korea, Taiwan, Malaysia, Thailand...) and eventually to China now. Germany maintained their manufacturing but thats exception rather norm.

This isn’t because manufacturing is lucrative. Manufacturing is the shitty job that no one wants to do. But you are willing to do it, there will be enormous long term advantage as a nation.

1) Trade, debt and wealth accumulation. Because most service cannot be traded, only small countries can make a living through service, eg financial centers. If you have to buy what you use, and cannot sell what other can use, you will accumulate debt and deficit. After one to two generations it will be on road to wealth depletion.

2) National security. Weapons and ability to wage wars. Saudi Arabia can sell oil for a living but they cannot produce a pistol. In war time you need factories to produce none stop. Just look at this virus episode to see who can ramp up the mask and ventilators production quickly?

Rivoli, you are right on the problem. But just trade war and subsidy wont work. Even Latin Americans tried protectionist policy to grow their infant manufacturing industries. Yes they have manufacturing but that is hardly competitive. It never lifted their living standard like the manufacturing powerhouses used to experience. They have tariffs like 50-100 percent. Good luck trying with U.S. where wages are multiples higher..which would require much more sacrifice with others which is an indirect tax. A 500 percent tariffs on oversea made products? Are the consumers ready for such a sacrifice?

German took a different approach. High emphasis on vocational training in education. Union reforms to cut benefits. Focus on only high tech manufacturing areas. Germany is much smaller then U.S. You cannot have such a big economy like U.S. with focus on high tech areas only. You wont have enough customers. You need those assembly lines packing mobiles phones and computer parts.

 

[Kevin88660]

We sacrificed the white working class for a better world for everyone else in the first and third world, case closed.

Deindustrialization is nothing new. UK-US-Japan-other Asian countries-finally China.

I am in Singapore and in the 90s we still have gadgets made in Thailand, Malaysia and Indonesia. After a few years it become all made in China.

 

[Kevin88660]

Yup, capitalism is about creative destruction, sectors that produces low value and still requires a large amount of input are constantly being gave away by sectors that do the opposite. Think about the politics and logistics that had to happen for things to be made in China...and it still comes out much cheaper than to manufacturing them in the States! That should tell you something about workers here..

A lot are historical circumstances that Are hard to repeat. All Asian manufacturing powerhouses went through the same circumstances. A poor population that is willing to work hard on shitty jobs feuled by rural to urban migration, a strong supportive government, friendly external environment that is willing to pour capital and technology in. Japan and Korea are U.S. allies. China fought a war with Vietnam at the border to prove her loyalty to the “free world” against the Vietnam backer-USSR. And after that all is history, U.S. poured in capital and technology. Oversea Chinese capitalists (HongKong, Taiwan and South East Asia) poured in management expertise and market channel experience.

Now even Chinese businessmen are trying outsource the low ends production to Indian/Vietnam and Burma. The Chinese strategy is to up to mid high end manufacturing. That’s why they talk up their plan China 2025.

The trump strategy is to terrorise MNC that stop outsourcing production or face my tarrifs. It is not working because it is too out of touch with the current global economic reality. A better way is to give work visa for Chinese workers who have minimum two years of work experience in manufacturing. Have a job number quota that every factory here have to hire a minimum of 50 percent American workers (admin staffs not included). America have capital, close access to consumer market and cheap electricity prices. All you need to do is to steal the workforce because production discipline, skill, quality control and management take time to get it right.

 

[Kevin88660]

We were going to do $10 million in sales this year, but the Chinese virus changed all that.

But I’m not mad.

This is REDPILLING the world on the CCP.

https://www.washingtonpost.com/opinions/2020/04/08/coronavirus-crisis-is-turning-americans-both-parties-against-china/

Democrats AND Republicans are going to come down harder than ever on China.

I tried to bottom fish in financial market a bit too early and got hurt. But I don’t think it is “China’s fault”. There are health science experts warning about this but I brush it off as “worst case is Sars 2003”.

Trump can get tokens of victories to get foreigners to buy some made in U.S. goods. Where is his plan for any long term solution? I need to see billions investment in infrastructures and vocational schools training to bar tenders to factory workers.

Poor health coverage, lack of financial reserves and the dismissive attitudes towards expert opinions are the causes exacerbating the pain in U.S. now. When you have no insurance you are afraid to get tested. When you can no cash and high liability you want to start work as soon as possible.

Sponsors from both parties have too much common interest with China. Once the election rhetorics is over don’t be surprised that it will be “business back to normal.” Even now many goods made in China but assembled in Vietnam are getting around with the tariffs. There is just so much incentive for Trump to score some easy points against China and declare an early Victory as we have seen.