Why U.S., China Destined to Clash

[Battle of Bach Dang River]

The products that Americans spend on that made in China are mostly low end daily necessities like apparels and household needs. It benefits America more than China. Without these supplies from Chinese, a pair of dungaree would cost three times as much compare to 30 years ago. That same pair of dungaree now only cost a little more for the same time span.

Yes, and Chinese businesses only earn 45 cents for every Dollar of their goods sold in the U.S market, while American businesses benefiting 55 cents.

Over the years I’ve heard many Americans fret about buying goods that are “Made in China,” since they want their cash to go to American companies instead of Chinese ones. A new study, however, finds that a majority of the price consumers pay for goods labeled “Made in China” actually does go to American businesses, not Chinese ones.

The study, from the Federal Reserve Bank of San Fransisco, estimates that of every dollar consumers spend on a product labeled “Made in China,” about 45 cents goes to China for the cost of the original import.
On the other hand, about 55 cents of that dollar pays for services produced in the United States, such as the transportation for the product, rent for the store where the product is sold, the salaries of the salespeople at the store, the cost of marketing the product, the profits for shareholders of the retailer selling the product and so on.

What’s more, the fraction of a retail product’s price going to American services is higher for Chinese-made products than for products made in other foreign countries. For retail prices on overall imported goods, only 36 percent — or 36 cents on the dollar, instead of 55 cents on the dollar for made-in-China goods only — goes to American companies and their workers.

That difference is largely caused by the types of products American import from China versus other countries.

“The fact that the U.S. content of Chinese goods is much higher than for imports as a whole is mainly due to higher retail and wholesale margins on consumer electronics and clothing than on most other goods and services,” write Galina Hale and Bart Hobijn, the authors of the study.

Bear in mind that there are other ways that American consumer spending gets channeled to China, among other countries. That is, many American-made products or services use imported goods as inputs. These types of imports, which are used as parts and not sold directly to consumers, are called “intermediate goods,” as opposed to “final goods.”

Given this, the San Francisco Fed’s study also looked into what share of total personal consumption expenditures in the United States goes to imported final goods (again, consumer products) and intermediate goods (parts).

http://economix.blogs.nytimes.com/2011/08/15/made-in-china-but-still-profiting-americans/

 

[longyi]

Despite what the American congressional members and medias claims, the lost or stagnated growth of jobs lies on 3 main factors and China is far being one of them. They are automation, computers and cost of oil.

Because of automation and computers a 'Little Debbie', a pastry maker, worker hardly ever touch the flour substances that are being make. A 1000 workforce factory is reduced to about 30 technicians and managements personnel.

Because of energy cost, all manufacturing companies are forced to drastically cut cost and make efficiency or close shop. But by following some sound advices, they moved oversea and China happened to be one of the destinations.

It was an opportune time for China too, so she wisely and swiftly remade her infrastructures and educated her workforce to meet such demands while other countries are still sleeping.

How ironic though, China is being blamed all these years just for being smart.

 

[Hello_10]

Why U.S., China Destined to Clash

By Minxin Pei

Forty years after Nixon’s extraordinary visit to China, a clash of political systems exists that not even shared economic interests can mask.
...

So this past week, four decades after the Nixon visit, the verdict is in: China has been the clear winner. Luckily, the U.S. didn’t lose, either. It has been a rare win-win game in geopolitics. Nevertheless, even in this win-win situation, China has undoubtedly gained far more than the United States. The tallying of such relative gains makes one wonder why so many Chinese elites should harbor such anti-American resentments today.
...

The underlying reason for the mutually beneficial U.S.-China relations since the Nixon visit is quite clear. The two countries shared important interests: security against the Soviet threat during the Cold War and growing economic benefits from trade and investment after the Cold War.
...

But today, the structure of U.S.-China relations has changed beyond recognition. In terms of security, they have become quasi-competitors, instead of quasi-allies, each viewing the other as a potential threat and planning their national defense strategies accordingly. Their economic relations have grown interdependent and have formed the most solid basis for continuing cooperation. But even here, strains have emerged, in particular in the form of massive bilateral trade deficits originating in part from China’s undervalued currency and restrictions on market access by U.S. firms.

The ideological conflict – between American liberal democracy and China’s one-party state – has grown sharper in recent years. Those who advocate engagement with China have based their argument on the assumption that China’s economic modernization and integration with the West will promote political change and make the one-party state more democratic. This “liberal evolution” theory has sadly not panned out. Instead of embracing political liberalization, the Chinese Communist Party has grown more resistant to democratization, more paranoid about the West, and more hostile to liberal values.

As a result, of the three pillars of U.S.-China relations, security, economy, and ideology, only one – shared economic interests — remains standing. In the realm of security and ideology, U.S.-China relations are growing more competitive and antagonistic. If anything, strategic competition will most likely become the principal feature of U.S.-China relations for the foreseeable future – as long as China’s one-party state remains in power. The underlying cause isn’t difficult to identify. Because genuine strategic trust is impossible between an America infused with liberal democratic values and a China ruled by a one-party state, the security competition between the U.S. and China will only intensify. Chinese leaders shouldn’t bemoan the so-called “trust deficit” because they know very well why it exists. In addition, the political economies of a liberal democracy (which favors free competition) and an autocratic regime (which favors state control) are fundamentally at odds with each other. Such institutional differences are responsible for economic policies that are bound to collide with each other. So the risks that even shared economic interests between the U.S. and China could erode as a consequence of the clash of their political systems are real.

Such a pessimistic forecast of the future of U.S.-China relations may not be appropriate for marking the 40th anniversary of the Nixon visit. Yet, if one accepts the premise that the persistence of one-party rule in China, not American desire for containment of a rising power, is the fundamental obstacle to an enduring cooperative and friendly Sino-American relationship for the foreseeable future, we will do ourselves a huge favor by acknowledging this reality and trying to change it.
Why U.S., China Destined to Clash | The Diplomat

Two lions can’t live together in one jungle . even if Russia has a lead in defence/ nuclear and space research field, China is the country who wants all the best technologies of the world, including defense/ space research etc. US won’t like to see a day when they will import high tech products from China, while China is determined to reach that level. US won’t like to become a country who will make cheap quality products in future while China the best ones, while China is determined to reach that status. US won’t like to see the day when J20 will be regarded as a better combat aircraft than F35/ F22 while we may see that day very soon. US wants to put missiles in space but they dont want the China to do the same while China also is determined to come in the position to hit every part of US from space, if required. Whites lived many generations while thinking they are the superior race than Chinese but now Chinese are set to reverse this old belief. All these factors all together will definitely result in a straight face to face between US and China in future.

 

[gambit]

Despite what the American congressional members and medias claims, the lost or stagnated growth of jobs lies on 3 main factors and China is far being one of them. They are automation, computers and cost of oil.

Because of automation and computers a 'Little Debbie', a pastry maker, worker hardly ever touch the flour substances that are being make. A 1000 workforce factory is reduced to about 30 technicians and managements personnel.

Because of energy cost, all manufacturing companies are forced to drastically cut cost and make efficiency or close shop. But by following some sound advices, they moved oversea and China happened to be one of the destinations.

It was an opportune time for China too, so she wisely and swiftly remade her infrastructures and educated her workforce to meet such demands while other countries are still sleeping.

How ironic though, China is being blamed all these years just for being smart.

And you continue to live in the 'inferior' United States.

 

[longyi]

Two lions can’t live together in one jungle. even if Russia has a lead in defence/ nuclear and space research field, China is the country who wants all the best technologies of the world, including defense/ space research etc. US won’t like to see a day when they will import high tech products from China, while China is determined to reach that level. US won’t like to become a country who will make cheap quality products in future while China the best ones, while China is determined to reach that status. US won’t like to see the day when J20 will be regarded as a better combat aircraft than F35/ F22 while we may see that day very soon. US wants to put missile in space but they dont want the China to do the same while China is determined to come in the position to hit every part of US from space, if required. Whites lived many generations while thinking they are the superior race than Chinese but now Chinese are set to reverse this old belief. All these factors all together will definitely result in a straight face to face between US and China in future.

Perhaps these struggles for betterment are good for both countries if it's done prudently and humbly. But don't forget there are many countries too that are equal ambitious and able as well.

So if anyone believe the future of this world relies on the competitions between these 2 giants are being myopic.

 

[longyi]

And you continue to live in the 'inferior' United States.

United States being Inferior? You must be kidding me.

What I said above iterated my position that Americans can adapt and change no matter how difficult the environments are. Despite all the rhetoric by our politicians, moving manufacturing oversea by our companies is a very smart move for survivals.

In fact American economy is improving now and before long, hopefully, we can pay back some of the bills from our wars.

 

[FairAndUnbiased]

The products that Americans spend on that made in China are mostly low end daily necessities like apparels and household needs. It benefits America more than China. Without these supplies from Chinese, a pair of dungaree would cost three times as much compare to 30 years ago. That same pair of dungaree now only cost a little more for the same time span.

It may surprise you but South Korea is #2 in textiles manufacturing, after China.

 

[longyi]

It may surprise you but South Korea is #2 in textiles manufacturing, after China.

No kidding. If so she must be a distance second. I heard they lost all their sneaker business to China a decade ago. Still, it is an accomplishment for such a small country. I always thought India or Indonesia .......

 

[Battle of Bach Dang River]

Two lions can’t live together in one jungle. even if Russia has a lead in defence/ nuclear and space research field, China is the country who wants all the best technologies of the world, including defense/ space research etc. US won’t like to see a day when they will import high tech products from China, while China is determined to reach that level. US won’t like to become a country who will make cheap quality products in future while China the best ones, while China is determined to reach that status. US won’t like to see the day when J20 will be regarded as a better combat aircraft than F35/ F22 while we may see that day very soon. US wants to put missile in space but they dont want the China to do the same while China is determined to come in the position to hit every part of US from space, if required. Whites lived many generations while thinking they are the superior race than Chinese but now Chinese are set to reverse this old belief. All these factors all together will definitely result in a straight face to face between US and China in future.

But the Chinese government has recently said that Pacific wide enough to contain both giants, the U.S and China.
That could happen?

 

[Hello_10]

Perhaps these struggles for betterment are good for both countries if it's done prudently and humbly. But don't forget there are many countries too that are equal ambitious and able as well.

So if anyone believe the future of this world relies on the competitions between these 2 giants are being myopic.

Longyi, one day I passed my message, that, "Nothing ever came from sky and nothing will ever come from sky. whatever is new today will be old tomorrow and it’s the people who made this world and we need those high skilled people who may make new techs and improve the existing ones."

You are based in US and Im in Australia and I can tell you that I found no environment of competition in education in Australia, then how Western people will make ‘competitive’ products if they don’t have competition for education in their society? In India, if you don’t get 'cut off', you cant get admission in engineering/ medical or in top Management institutes. Just go through the ‘cut off’ of IITs, medical institutes of India and compare with rest of world. see the 'cut off' of IIMs, GMAT score of 760 to 780 is needed, while in Australia/ US, if you are citizen then you may easily get admission there for any engineering/ medical or MBA studies and we find average GMAT score of only few US’s institutes above 700 which is also because of those migrants who got admission there due to very high GMAT score under scholarship programs. If China is going to become super power then its because of their own people who work for their Institutions but for US/ West, they want migrants to lift them up.

Just have a look on the labs of US’s technological institutions like NASA, MS, GE, US’s defense sectors etc, almost all the professionals/ technical experts working there are migrants, mainly Indian origins. Just have a look on the international exams like GMAT/ GRE and for medical ones, almost all are dominated by Indians who are then offered to work for US’s/ Western firms. It’s the people who can make their nation proud by their performance and take their nation up, under high school pass population of US/ UK/ Australia and illiterates of Congo/ Afghanistan have not much difference . And if Congo and Afghanistan are low population but big land countries, US would also fall in the same category after 10-15 years, if they don’t get highly qualified migrants.

Only organizing new wars to make different colonies is the only way for US to maintain superiority. As, we now find highly qualified migrants to first work for Western firms and back to India and then work for their home companies. Its very likely that India may become a research hub for new techs in future but how under high pass people of US/ UK/ Australia type countries may take their nation up? “struggles for betterment” is possible between those countries who have those people who may make their nations fighting the competition, its not true for the country like US/ UK/ Australia/ Canada etc. only by fighting different wars and enslaving the top professionals to work for US, is the only option for US to maintain their current status.

 

[Hello_10]

But the Chinese government has recently said that Pacific wide enough to contain both giants, the U.S and China.
That could happen?

naah, have a look on the trade, is it true? today we find high energy consuming jobs in China/ VM and high techs in OECD nations but soon countries like China, Vietnam, Thailand, India, etc will have catched up and will then make high tech products. can you include the space in "Pacific wide" difference where US has put missiles targeting Russia and China, and now Russia and China both want to do the same? I read India has planned for a share with Russia in this project. Also, if US now wants to come to South China Sea with putting their troops in Australia then it simply means that they know that they gotto have their leg in Asia

 

[longyi]

Hello-10:

I read the 'return rate' of Chinese students back to China is less than 50%. I don't know what's the rate for Indian students. But nevertheless US has a net gain for brains which ever way you count it.

US is always been a country that build on immigrants. Because the opportunities and the living environments here, this trend is unlikely to stop any time soon. The new arrivals can easily adapt into the mainstream societies and before long they will treat this as their adopted country even though their fondness of their mother country are still strong.

 

[FairAndUnbiased]

Hello-10:

I read the 'return rate' of Chinese students back to China is less than 50%. I don't know what's the rate for Indian students. But nevertheless US has a net gain for brains which ever way you count it.

US is always been a country that build on immigrants. Because the opportunities and the living environments here, this trend is unlikely to stop any time soon. The new arrivals can easily adapt into the mainstream societies and before long they will treat this as their adopted country even though their fondness of their mother country are still strong.

many of the children of long time Chinese immigrants were also major troublemakers. The successful Chinese immigrants are mostly the recent immigrants from the 80's and 90's from Taiwan, and 90's 00's from mainland.

California uses more gasoline than all of China combined, despite a GDP 1/8th the size and 1/40th the population. In fact, California uses more water than any other country in the world excluding the US as a whole. The water is predicted to go dry in 15 years, and no projects have even been started. The Great Plains are on verge of desertification and a permanent dust bowl will return within a decade when the Ogallala Aquifer dries up.

don't worry about the return rate TODAY, the important part is the trend and what it will be in 5-10 years. That is because the return rate TODAY (actually, latest data was from 2007) reflected the attitudes of 5-10 years before that day; that's how long degrees take to get, anywhere from bachelor's alone, to bachelor's + PhD, and some PhDs are 10 years alone. from what I observe, TODAY the return rate is going to be much higher than in the past, and it will continue increasing in the future.

 

[Hello_10]

Hello-10:

I read the 'return rate' of Chinese students back to China is less than 50%. I don't know what's the rate for Indian students. But nevertheless US has a net gain for brains which ever way you count it.

US is always been a country that build on immigrants. Because the opportunities and the living environments here, this trend is unlikely to stop any time soon. The new arrivals can easily adapt into the mainstream societies and before long they will treat this as their adopted country even though their fondness of their mother country are still strong.

good post. hmmmm if you go though the news then thousands of Indian professionals are now coming back from US/ West. average salary of an professional is around 100k to 200k in Western countries but even if they may secure 20lacs+ in India, they prefer to move to India now as it is now believed that the companies would grow in India, not in US. even if you put your made in US products in high efficient/ less maintenance required etc category, clients are willing to buy the products made in China/ India as they are much cheaper than those which are made in West. Now companies are more willing to improve their production lines based in India/ China itself, as they know that either today or tomorrow, they gotto shift their production lines to India/ China. there is no sign that industries based in US/ UK/ Australia would grow but ROI in India will always be higher, companies would always grow in India and it will be more likely that you may have higher career progress in India, not in US where the companies are struggling to just maintain their current revenue.

yes Indian professionals are still keen to go to US as US$ is more valued than Indian rupees but it is also true that 100s of thousands of Indian professionals have backed to India during last 3 years, since the recession in late 2008. as, after securing a level of good foreign experience, it is now more worth to be in India and work for those Indian companies who would grow in future, not for those US's/ Western firms who are waiting for their death

 

[Battle of Bach Dang River]

naah, have a look on the trade, is it true? today we find high energy consuming jobs in China/ VM and high techs in OECD nations but soon countries like China, Vietnam, Thailand, India, etc will have catched up and will then make high tech products. can you include the space in "Pacific wide" difference where US has put missiles targeting Russia and China, and now Russia and China both want to do the same? I read India has planned for a share with Russia in this project. Also, if US now wants to come to South China Sea with putting their troops in Australia then it simply means that they know that they gotto have their leg in Asia

In terms of security / military, it's more than what you think. The USS giant carriers often traveling across the seas West Pacific, from the Yellow Sea, Sea of ​​Japan, Taiwan's water, the Philippines sea down to the East sea (south china sea) ... They regularly exercises drill with Japanese, Korean, and upcoming with the Filipinos...
Meanwhile, the other "lion" is taking steps toward "bared its teeth" near that area.
So the question is whether the two "lions" can live in a "jungle"?