Concerning US-China Trade
Panelist Yukon Huang Economic and Trade Relations with China See Cracking the China Conundrum: Why Conventional Economic Wisdom Is Wrong
1. Economic Misconceptions
Concerning America's Poor Attitudes Toward China.
2. Tensions are leading to inappropriate policy.
3. Tensions grew as China became a significant world power.
4. Specifically, Tensions caused by
China's trade surplus causing US trade deficit leading to
Perceived Excess US investments in China
US Intellectual property loses
5. Exploring China Trade Surplus
US deficit and China Surplus are not interrelated
US negative trade balance began about seven years before China increased surplus
Most of China's US measured manufacturing trade surpluses leaves China
as payment to Asian the supply chain providers and the product's owner like Apple
So China's trade surplus is a Gross amount, before distribution.
It is not like profit, a measure of gain. Of the $800 recorded as Chinese trade surplus from an iphone,
only $25 stays in China. Apple gets $400 dollars.
Asians work hard, save a lot, sells well-made products at very low costs to the US consumers.
US consumers pay with borrowed dollars which go overseas to be the world's money.
The US is the world's banker and can print money.
Want to steel a lot of money, own a bank.
In effect, US deficits are paid for by foreigners.
6. Exploring US Investment in China
Most comes from Europe which makes in China what it sell in China. Example: Airbus.
US China Investment is minimal because major exports like agriculture and Boeing are US made.
US companies invest where they get the highest return and will not invest in low margin manufactured
goods unless they can offshore manufacturing to pay both lower wages and taxes.
US invests around the world in services related to finance, health care, insurance
and education because profit margin are large.
Services are blocked by the Chinese though investment services may be opening up.
7. Intellectual Property Loses
China excels at generating profit using foreign technology
Foreign companies use their tech in china
China imports, buys and steel technology.
Steeling is difficult and stops at personal income of about $30,000.
China is poor and will be steeling for a long time. It is a problem.
8.US has gained from China's lowering the cost and investment requirements in
See Reform Contradictions Facing China's New Leadership, Yukon Huang