Congressman Craig’s ‘bathroom tapes’ and the Chinese products scares…?

[amicus]

Neither issue is worth a separate thread in my opinion, but I do so like to comment on current issues, so call me a news junkie.

I am neither Republican or Democrat and I distrust both, well, almost equally.

I went from channel to channel, trying to escape the continual broadcast of the ‘bathroom tapes’ that dominated the news channels today and finally just let it blab away.

It smells strongly of ‘entrapment’ to me, a set up, inspired by a newspaper and of course, the ‘political season’ that is upon us.

Just as the Republicans hounded President Clinton almost out of office over a sex scandal, the Democrats are making it clear that they can play that game as well. I trust neither.

And the China issue, free trade and all that, is it really an issue or is it a political tool to damage trade agreements between China and the rest of the world?

Could it be a huge political conspiracy with those opposed to outsourcing, free trade and the whole range of political issues? Does it indicate that both China and the US need more stringent inspection and control over products coming from China?

Maybe ‘Handprints’ would care to weigh in on the second issue with an insider’s point of view?

The still curious….Amicus…

 

[Handprints]

And the China issue, free trade and all that, is it really an issue or is it a political tool to damage trade agreements between China and the rest of the world?

Could it be a huge political conspiracy with those opposed to outsourcing, free trade and the whole range of political issues? Does it indicate that both China and the US need more stringent inspection and control over products coming from China?

Maybe ‘Handprints’ would care to weigh in on the second issue with an insider’s point of view?

The still curious….Amicus…

I'll take a hack at a couple of parts of this but, I expect, pretty unsatisfactorily. I'll point out the more glaring faults with my comments as I go along and leave the unnoticed ones to someone else.

On quality control: From 1995-2004, according to the US Commerce Department (I think, could it have been State?), goods returned from China to the US because they were damaged or defective, as a percentage of total export volume, were about the same as goods returned from the US to China. I have no idea where to find evidence of that number, which I've seen quoted for years in marketing literature designed to attract foreign investors to Chinese manufacturers. It's not on Bloomberg's otherwise comprehensive list of trade numbers and I don't know the Commerce Dept website well enough to be sure I could find the number in a reasonable amount of time. (Perhaps someone who does know it will hop in here.)

A huge proportion of Chinese goods exported to the US are low-cost purchases likely to be bought more heavily by the more "vulnerable" members of society. A huge proportion of the US' exports to China are high-tech or high-capital-intensity goods used in infrastructure building. Those buyers can fend for themselves.

Is there a growing problem with quality control in Chinese manufacturing? I'd suggest that the overall trend is going the other way - better goods with less variable quality - but the overall trend doesn't raise all companies' games.

Should imports be subject to greater scrutiny? If both sides feel they are taking an appropriate amount of time and care, are willing to pay the price in speed and cost pass-ons, and the amount of scrutiny doesn't result in a non-tariff barrier to trade (ie: "Sure, we'll look at your fresh cabbage sometime next month!"), then I don't really mind if they do or they don't.

Should China be taking better care of its "Made in China" brand equity? You bet, and if things get tough on the PR front, shooting the factory owners is always an option here...

On free trade: You either want a piece of China's growth or you don't. If you do want to invest here, allowing free trade seems like a fair concession.

You either want to sell to China's 800m proto-consumers, who have rising incomes and enough of a surplus now to make shopping the national hobby, or you don't. If you do, free trade seems like a fair concession.

You either want to buy China's cheap goods or you don't. If you like the effects that a disinflationary pressure puts on spending power and labour costs in your own country, free trade seems like a fair concession.

But let's say you either don't want any of those things or are worried that accepting them will expose you to risks you're unwilling to take. Don't trade. Your 300m people are a highly desirable market but there are 7.7bn others who look pretty good themselves. You'll break China's heart but she'll get over you...

We've already been through the effects on America of slamming the door shut in another thread. How about some of the effects of just plain spitting at each other for a decade or so?

Taiwan is a problem that isn't going to go away. You're going to want a China that, at a minimum, cares to listen to you if that pot starts to boil. China's the only country that North Korea will, at least on occasion, listen to. China cares every bit as much as you do about global energy security; they're going to be useful guys to team up with if anyone needs to be leaned on. Finally, China's significantly more likely to take advice from - and make concessions to - its friends (face is everything here).

I think, and it appears than Hank Paulson thinks, if you have any time for him, that good trading relations with China will make all of those potential advantages more available to America. That's the carrot.

If you want to compile a list of economies that have dropped down the development scale in the last hundred years, you need look no farther than those nations who erected a robust set of trade walls to grow their own little economic hothouses. The farthest left-wing development economists you can find are now preaching against this approach.

Not wanting free trade (or at least as free as you can stomach), in my view, means trading the majority of tomorrow's actual and potential gains to postpone the current (and, eventually, unavoidable) pain.

Hope that's of use.
H

 

[amicus]

Of great use and thank you.

Even more so as I find myself in agreement with most that you offered and it, in a small way, confirms my understandings and the success of my small attempts to remain current in world affairs many long years after active involvement.

A pleasure once again to read your posts.

Amicus...