Page 6 of 6 FirstFirst ... 456
Results 51 to 52 of 52

Thread: House Votes to Impose Tariffs on Chinese Goods

  1. #51
    Equal Opportunity Hater
    obvious Child's Avatar
    Join Date
    Apr 2008
    Location
    0.0, -2.3 on the Political Compass
    Last Seen
    12-09-14 @ 11:36 PM
    Lean
    Other
    Posts
    19,883

    Re: House Votes to Impose Tariffs on Chinese Goods

    Quote Originally Posted by Objective Voice View Post

    I'd be interested in hearing your point of view on the matter. Drop me a PM if you please.
    Nah, no need PM.

    To understand how to get Beijing to stop playing with its currency, one must understand why they are playing with their currency.

    The Communist party in China has staked its legitimacy upon economic growth while it denies political freedom. Seeing the failure of Perestroika coupled with Glasnot in the USSR had a powerful impact upon the PRC leadership. The PRC fully understands that it will only survive if it can provide economic growth to its people. The massive stimulus bill they quickly enacted to counter the recession recently and the use of currency reserves to stabilize the country during the late 1990s East Asian Financial crisis are evidence of this. Not to mention the public use of the massive industrial banks to provide state support to business. The future of the PRC is entirely tied to economic growth.

    With China's domestic market effectively nothing compared to its export oriented sectors, China has relatively little means of providing domestic demand. Couple this with the utter lack of any real safety net results in savings rates well beyond what most Americans can even comprehend. The problem is that domestic consumption is comparatively low on a per capita basis even when controlling for income compared to Western Nations. It's exceptionally hard to produce a thriving domestic market like the US and Europe. So China falls back on its export orientation that got it to where it is now.

    Thus, to promote growth, stability and its own survival, the PRC plays with its money to keep it artificially low and to promote exports and jobs. The PRC realizes this cannot continue forever and hence why it it has been spending rather large sums of cash on the Western provinces to promote domestic consumption and industry there.

    Basically, to get China to stop blatant currency manipulation it needs to really do one thing: produce a domestic consumption market to rival its export market. To do that it needs to produce a safety net to reduce savings and boost domestic consumption. But to have a real viable domestic market, it needs a large middle class. While that is happening, it's not happening fast enough for the rest of us in the US. Oddly enough, to actually make that go faster, we (US and everyone else) need to buy more and invest more in China. When the PRC feels that it has achieved a level of economic expansion and growth driven more by domestic spending rather then exports, it will lay off the manipulation as its own survival is no longer tied to largely the export market.

    This on a side note is related to why the PRC keeps buying dollars. By sending Yuan overseas, it can reduce the impact of inflation which tends to result in unrest. China is effectively using US bond markets as inflation sinks.

    I bet maybe 20 people here will understand all of that.
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

  2. #52
    Equal Opportunity Hater
    obvious Child's Avatar
    Join Date
    Apr 2008
    Location
    0.0, -2.3 on the Political Compass
    Last Seen
    12-09-14 @ 11:36 PM
    Lean
    Other
    Posts
    19,883

    Re: House Votes to Impose Tariffs on Chinese Goods

    Quote Originally Posted by Hicup View Post
    Well, taken literally, shifting the burden of what NASA, does is technically unconstitutional. Last time I checked, foreign affairs was handled by the US Federal Government, particularly the executive branch.


    Tim-
    Well, technically, NASA is unconstitutional.

    Still, we only hear the GOP talking about job killing taxes until someone starts to cut spending in their district. The Democrats should adopt the "Job-killing cuts" line.

    "The Republicans want to slash spending. Sounds like a good idea on the surface. But it will cost your neighbor his job. And your best friend. And your brother. And will they go out like they use to? Of course not. Your local businesses will hurt. And they'll layoff people. The GOP wants to save their retirement funds by taking your jobs. Oppose the job-killing cuts for the sake of your neighbor, your friend, your brother and your local business. Vote ____"
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

Page 6 of 6 FirstFirst ... 456

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •