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February 5, 2010
Week in Review: China and the United States

Sino-American relations have faced a turbulent few weeks, as the Obama administration appears to be adopting a less conciliatory approach to Beijing.

The United States approved the sale of missiles to Taiwan despite Chinese opposition, and President Obama has also agreed to sit down with the Dalai Obama, despite warnings from the Chinese government against such a meeting.

Trade is another point of contention between the two nations, and China today announced that it would place a duty on imports of American poultry. This move is retaliation for an American tariff placed on Chinese tires by the Obama administration in September.

And Obama, this week, also promised to become “much tougher” on Chinese trade.

David Andelman, editor of the World Policy Journal, and Ian Bremmer, president of the Eurasia Group, join us for our weekly roundtable to talk about Chinese-American relations.




If there were effective IP protection in place high-tech exports to China would increase trade between China and the rest of the world. But as Zho precisely points out in his posts patent protection would have to be granted in China for IP rights to be protected. Its very likely that the information provided to the Chinese Patent office would be relayed to Chinese industry for duplication and development before a patent application was granted.
For example, Chinas High Speed Rail system is being sued by the French owner of the technology that was pirated to build the Chinese system.
Although the train-tecnology may have been improved upon by China the underlying property is not owned by China –it is French property.

America and China needs to find balance and cooperation to build a long and prosperous relationship based upon respect and property rights.
We stood together to defeat imperial Japan, we should now return to the friendship that existed between our two nations by slowly equalizing our trade relationships and helping freedom of law to thrive in China.
Americans have never ben afraid of hard work. In fact, there is large segment of the American work-force who are not equipped or who prefer a job that is labor intensive. Not everyone can be retained. Americas labor-intensive work force is waiting to resume their occupations and earn a living the way they always have– through hard work. We want to return to a time where there was an equal share of Made in America products on our store shelves. Where have those jobs gone ? Simple, look on the store shelves– everything reads “Made in China.”
As Zho points out “The rise of China and a strong American economy are not incompatible.” Both side need to find a way to resolve our issues without them developing into a full blown trade war.


Re: @ Zhu Bajie Post #14 {(1st Paragraph)(1-28-10)} “Who’s actually paying for protectionism? Under the current regime,the Chinese factories make typically 10-15% difference (exchange?) between,”Cost-of-Goods (COGS) Sold”,and the retail price in the United States. The rest (balance?) mostly goes to American companies working in various phases of the distribution chain. My question being;…who owns these distribution chains,and does the entire bottom-line fall into the American companies coffers, assumming a phenomenal 85-90% profit,minus (overhead,etc.?)variables? Could you please elaborate on just how much these companies actually make on both sides on the isle. Thanks again,earle.


Price of underwear:

Sometime ago a official from China spoke about why those unskilled jobs are leaving America. He flatly stated that if a worker in America was being paid $15 hour to weave cloth and you could do it for $5 an hour in Mexico you would goto Mexico. That same loom that weaves cloth today weaves it in China where the worker gets paid 0.50 an hour, is on time for work, speaks the same language, and is willing to work longer hours for the same pay. So that Americans can get their underwear at a cheap price. All of those looms as old as they were that used to be in America are being used in China to weave that cloth. In reality all those cheap jobs have been moved off shore and they ain’t comeing back folks. China has replaced the term Ugly America with the term Ugly Chinese as China’s wealthy Communist Party members travel the world taking in the sites and looking at new Tibets to conquer. What country outside of America would devalue their currency toward another country. The US dollar is by all accounts not even worth the paper it is printed on. Even drug dealers have found that the US Dollar does buy what it used to buy in America and it buys even less overseas. It is like French wine, the best is not going to America it is going to China where it will fitch a better price.
Look at all of the ads on TV where China is buying up America peoples gold and in this China will use it in their industries. Maybe resell it back to Americans at a very higher price.
America wanted cheap goods they got cheap goods.


It is ironic that the communists are displacing the US as an economic power using capitalism.


Actually I think China WILL revalue the RMB, but on China’s terms. Not being bossed around is a very important factor, if only for domestic consumption – very much like in the U.S. It is very much in China’s national interest to see a strong American economy.

The rise of China and a strong American economy are not incompatible, as pointed out in the new book SUPERFUSION. America has LOTS of innovation and entrepreneurial talents, and America has private capital (it is only the government that is broke at this time). America actually also has a manufacturing sector that makes high tech things that China would love to buy. But Cold War silliness has prevented that high-pay-job sector of the American economy from thriving. Instead, the modern McCarthyites insist that it IS those specific low pay (high labor intensity) jobs that flowed out of America in the last few decades, that America has to get back – it matters not to them that even China is not holding on to those jobs, as they flow down the development stream, to even lower wage countries such as Vietnam, and now the African continent.

Don’t look only back with nostalgia. Look at TODAY. Does China look like a pariah in the world?


China and the United States

Obviously US officials including Obama are whistling in the wind if they think that China will make concessions on currency. And even if China was to revalue its currency upward against US dollar, US officials are deluding themselves if they think revaluation of Chinese currency will lead to reduction in US trade deficit with China or increase in US jobs.

Nixon’s embrace of China to counter Soviet Union in 1972 has come back to haunt US with a vengeance. US has nobody to blame but itself for the rapid rise of China.

Afterall China was a pariah country in the world just like today’s North Korea until anti-Communist Nixon’s 1972 visit when Mao‘s cultural revolution was in full swing killing millions of innocent Chinese. All the West European and East Asian countries stayed away from China following the US lead until 1972 and embraced China after Nixon’s visit. While US would not give MFN status to Soviet Union (remember Jackson-Vanik amendment?) unless Russia shed Communism, it had no problem giving it to China’s Communist dictators with a capitalist mask. Trade with China expanded by leaps and bounds during 12 years of Republican rule beginning in 1981. Bush Senior had NO problem sending his national security advisor to China within two months of Beijing massacre in 1989. After campaigning against butchers of Beijing in 1992 elections, even Bill Clinton became enthusiastic supporter of trade with China once he took lessons in foreign policy from Nixon in early 1993 during a special Whitehouse-arranged meeting. US also promoted China to a super power status by accepting it as a permanent UNSC member.

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