The U.S. monthly trade imbalance with China was $23.2 billion in January 2011 vs. $18.3 billion with China in January 2010. Yet, China's monthly trade surpluses were $6.5 billion in January 2011 and $14.17 billion in January 2010. Put another way, the world (excluding the U.S.) ran a trade surplus of $16.7 billion with China in January 2011 vs. 4.13 billion in January 2010.
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I believe the reasons are fairly complex, as even if one puts aside environmental/climate issues, there are very strong geopolitical reasons to pursuing energy supply diversification efforts. I suspect that a short-term orientation is at play. As a result, future risks/problems are left to be addressed when they manifest themselves. One sees that mentality at play in fiscal policy, corporate R&D (falling relative to such investment in numerous other OECD countries, not to mention China), and public investment e.g., a dollar of savings in cutting education expenditures is seen as equal to a dollar of savings from cutting purchases of, let's say, consumable goods. Yet, in the former case, long-term benefits are sacrificed, making the net lifetime savings from the decision much less, if not negative. In the latter case, few future benefits exist, so a dollar of savings there is actually close to a dollar of lifetime savings.
The U.S. is also increasingly--at least it appears that way--resigning itself to maintaining the status quo. With each energy crisis having receded and prices having returned to less costly levels, not to mention U.S. access to conventional energy resources still well-established, there is a sort of inertia that discourages making investments that could undermine that familiar and comfortable status quo. Today, the U.S. is very much acting as a status quo power. It is becoming increasingly risk averse (short-term risks) even as that approach could erode its future strategic flexibility (range of choices) and lead to much greater long-term risk exposure. In the absence of the kind of acute resource challenges facing China that would make energy supply diversity a near-immediate necessity, the U.S. has even less incentive to be bolder on that front.
Today, those decisions are still largely matters of choice. However, should the long-term trends in educational attainment in the U.S. (especially in critical science, math, technology areas, etc.) not be remedied, the latitude for choice will shrink. An undereducated workforce can only do so much. Then, structural barriers that are no longer matters of choice could undermine the nation's capacity for innovation with broad adverse economic, fiscal, social, and geopolitical implications.
Under such a scenario, national renewal would be required, and that would be a long, difficult, and uncertain process. Fortunately, that outcome is not assured. In general, democratic systems have far greater capacity for recovery and renewal in the face of changing environments than non-democratic ones do. The U.S. still has a reservoir of innovative firms and people. But today's choices will shape tomorrow's opportunities and risks. If the current political atmosphere characterized by excessive short-sightedness prevails, the probability of bad choices leading to reduced future strategic flexibility would increase.
Quite frankly I think the electorate needs to do the same thing too.
For the national renewal you speak of, the country would have to go through hard times. And people don't seem to want to give up what they have for any period of time.
There are a number of high-tech businesses in my area still alive and kicking simply because they can manufacture things that are physically or financially impossible to manufacture in China.
Right now they're going in for high-volume-cheap-****, and around here we're doing low-to-mid-volume-weird-****.
I'm already gearing up for Finger Vote 2014.
Just for reference, means my post was a giant steaming pile of sarcasm.
Efforts to rein in or contain China as some pundits recommend or to otherwise humiliate China will be very destructive to the bilateral relationship, not to mention very likely unsuccessful. That's a course the U.S. should avoid, as it is that course that creates perhaps the greatest prospect of a hostile China even as China's power is growing both in absolute and relative terms. Differences should be handled carefully through diplomatic channels, but both parties will need to be cognizant of one another's critical interests and constraints. Some careful balancing will be required.
Furthermore, as the political leadership largely reflects the attitudes of the public that elects it, I agree with you that the electorate is a big part of the problem or solution, depending on how things play out. The electorate is not some helpless group of bystanders who have no influence or voice. Whether the electorate choose that role is a different matter, but ultimate responsibility still resides in the electorate even if the electorate chooses to neglect its obligations.
Right now, I don't believe the U.S. needs true national renewal (a kind of internal revolution that shatters existing institutions/norms and fashions new ones), though difficult choices are needed in some areas. Some of those choices will entail a measure of sacrifice and pain. When the country's fate is much less a matter of choice e.g., an undereducated workforce has resulted in its having lost competitiveness, degrading living standards (relative to many other countries), and loss of economic/military capacity due to technology gaps, then such renewal will be needed. The pain during that period would be much greater than what is required if the nation tackles some of its difficult choices in the near-term and medium-term. Moreover, prospects for success would be much less certain than if the U.S. addresses its great problems prior to the onset of such a situation.For the national renewal you speak of, the country would have to go through hard times. And people don't seem to want to give up what they have for any period of time.
Last edited by donsutherland1; 03-30-11 at 09:33 AM.
Many say that is the calculation was corrected to show only the value add of China on products shipped here the number would be much smaller. My sense is that it is better politcally to be able to blame the Chinese.