China gets mad at Donald Trump, threatens to ruin Apple China says the rhetoric of US President-elect Donald Trump could lead it to block the sale of products by Apple and other US tech companies. An editorial from the state-run Global Times news outlet suggests that, should Trump make good on his campaign promise to declare China a currency manipulator and raise tariffs on …
The US recognised this problem at the begging of the 1980s and tried unsuccessfully to turn it around. Things have only gotten more precarious since then. Will Trump be able to stimulate American manufacturing to the levels of 40 years ago? I doubt it. So the only way forward it to be very, very careful. I personally think that the best case scenario is that he learns that lesson. Hopefully before it is too late.
Will Trump be able to stimulate American manufacturing to the levels of 40 years ago? I doubt it.^H^H^H^H^H^H^H^H^H^H^H^H Not even in an infinite number of concurrent simulations.
There is no going back, regardless of the rhetoric or blustering. There is no earthly reason why anyone would ever produce underwear and shirts in the US, nor the cheap electronics that fill Wal-Mart to bursting. Short of paramilitary forces holding people at gunpoint to produce for pennies a day, there will never be a profit.
Of course, the dirty secret is that in terms of value of goods produced, the US manufacturing sector hasn't looked this good in 15 years; the difference is it's being done through automation or with minimal human interaction. But that's not what The Donald ever meant, and that's definitely not what his supporters heard.
EO "...cheap electronics that fill Wal-Mart to bursting..."
Our Mall*Warts in eastern Canada have 'next to nothing' in the Electronics Department. Their entire display inventory could just about fit in a van. Anyone with a 'Gold' credit card could buy one of everything.
They do have a lovely display of bubblegum on the sidewalk just outside the entrance. It's unlike any other retail store. Like the beginnings of a future Tar Pit, ready to trap Mastodons or Giant Sloths. Strange.
Our Mall*Warts in eastern Canada have 'next to nothing' in the Electronics Department. Their entire display inventory could just about fit in a van. Anyone with a 'Gold' credit card could buy one of everything.
You don't HAVE real Mal-Warts in Canadia. You DO have Tim Horton's
holding people at gunpoint to produce for pennies a day
They already do that. And I think Trump plans to increase the prison population...
This is exactly my thoughts. Consumers want cheap goods, and corporates want profit. There is no way to produce goods in USA (or UK) which have a retail price suitable to consumers, yield a high enough salary for workers and return a high enough profit for the share holders.
The USA and the UK want their cake, and to eat it too if they expect cheap goods, manufactured locally paying good wages and returning good dividend on the shares which shore up their pension funds.
"The USA and the UK want their cake, and to eat it too"
I know it's not your fault, but why do people use this blatantly incorrect saying?
I damn well can have my cake and eat it. In fact, if I don't have the cake, how can I eat it?
What I cannot do however is eat my cake and have it.
This and other examples are such a pet hate, I plan to write a book called "The phrases we use that make no F#@!*:^ sense..."
"The proverb simply means, 'once you have eaten your cake you no longer have any cake.'"
I know what the proverb means, but it means the exact opposite of what is said. That by any stretch of the imagination is a stupid idea. Was the proverb invented by a politician?
"It's the 'have your cake and eat it too' brigade that you should be irritated by."
The user I was replying to posted:
"The USA and the UK want their cake, and to eat it too"
Well lets not forget the one ray of sunshine in the US, the forced labour in prisons making goods for pennies. That's at least one place where they can still be competitive:
"According to the International Labor Organization, in 2000-2011 wages in American prisons ranged between $0.23 and $1.15 an hour. In California, prisoners earn between $0.30 and $0.95 an hour before deductions."
"Over the years, the courts have held that inmates may be required to work and are not protected by the constitutional prohibition against involuntary servitude. They have also consistently held that inmates have no constitutional right to compensation and that inmates are paid by the "grace of the state."
Well lets not forget the one ray of sunshine in the US, the forced labour in prisons making goods for pennies. That's at least one place where they can still be competitive:
Yes, they get paid $8 a day, but the taxpayer pays $150 to some private correctional company to house them and give them laughable "medical" care.
Automation is now in the process of impacting traditional white collar jobs. At least traditional manual work has a cost trade off with it -- people cost money but so do the machines that replace them. A lot of white collar work doesn't have those tradeoffs. We've already experienced the first wave as jobs like typists and secretaries disappeared; we didn't really notice what was going on because we all thought we had been promoted. Now AI is starting to eat into serious jobs, jobs that we might have thought skilled, in fields such as legal and medical.
There are only two ways out of this problem and they're really two sides of the same coin -- government spending. The first is the socialist utopia, something that's been elusive. The second is, unfortunately, war. War has traditionally been the fix for over production and surplus population; unless we get a handle on our world - fast - this will be the preferred solution going forward.
Actually, manufacturing may start moving back to the US. As producing countries get wealthier the local wages start rising. This happened with Japan and Korea. It is happening in China and India. At some point the local wages, etc. plus freight costs are high enough that there is little or no advantage to manufacture overseas. So the manufacturing migrates back.
In modern times, this always happens with a new President:
China complains about trade and makes financial threats, looking for trade concessions.
North Korea makes noises about nuclear weapons, looking for $billions under-the-table.
Iran shouts about their nuclear program, looking for economic concessions.
Russia makes military threats towards some nearby former-Soviet territory, just for fun.
In all cases these four nations are using PR as a weapon against the new administration.
"The US recognised this problem at the begging of the 1980s and tried unsuccessfully to turn it around."
How so, where, what exactly did they do to reverse this. You are aware that the iPhone is manufactured at the Foxconn plant in China, as is the BlackBerry, Kindle, Nintendo, PlayStation, Xbox, Nokia and Wii. The same was done with the automotive industry, top US companies all moved production to Mexico. The US megacorporation are quite happy to move production overseas if it'll make them a few extra points on the bottom line. The decimation of manufacturing in the US being an irrelevancy. It's be interesting seeing if Trump will reverse any of this with his promises to renegotiate NAFTA and TRIPS.
"Will Trump be able to stimulate American manufacturing to the levels of 40 years ago? I doubt it. So the only way forward it to be very, very careful."
There's another tried and tested method that the country has used in the past. Sadly, it's war. Without the word "trade" in front of it.
>This might be posturing to secure a deal.
Nope it's the currency manipulation accusation. China's stated aim in the medium term is to displace the Dollar with Yuan in international exchange - tariffs pale in comparison. The $1.2 trillion in US treasury debt held by the Chinese Government is a much bigger stick than the US's $330 billion trade deficit with China.
If Trump had got elected in 1980, maybe his posturing could have made a difference - back then Shenzen was a sleepy market town with a population of 30,000 and the US had an industrial base. It's a little too late to stop the ride now and there are plenty of other fare paying passengers if he tries.
My guess is that you are not a negotiator. Or, at least, I hope I get to negotiate with you if you are.
The loser out of a trade war with the US is China. It will be unpleasant for dainty snowflakes in California and New York who might not be able to get the latest shiny, shiny as inexpensively as they do today. But there is a reason there is a trade imbalance. US$ are funding the process of lifting China out of the sorry state it was in by the 1970s.
There are some 300m relatively wealthy people in China, mainly in the large coastal cities, but it is still a dirt poor place with average GDP per person of just $6K vs US at over $50K. If China does not have the money from the US its growth will fail almost overnight. There are just not enough wealthy Chinese to keep the economic engine running well enough to lift the country out of poverty.
Since 2008 China has been on a suicidal investment binge. The investment has delivered infrastructure and new cities to the country but it has piled up humongous debt. Where will the money come from to service this debt if not from the US? Not sure you believe me? Here's a link to a program by a UK journalist called Robert Peston who, at the time, was economics editor for the BBC. His assessment may be overly pessimistic but it illustrates the scale of the potential problem.
https://www.youtube.com/watch?v=CNu4AoHdNTE
Meanwhile, China cannot feed itself and has almost no natural resources. It needs to buy those from other countries. This is why China has been making friendly with much of Africa and South America where it can. But it needs US$ to spend.
Without US$ the human cost in China will be horrific. Even with the one-child policy the Chinese population is 1.3bn. One in every 6 people on the planet is Chinese. Without US$ China will be unable to support itself.
So the Chinese may have a significant stake in the US. But the impact on the US of China wielding its stick is unpleasantness for US citizens. For many Chinese it can be life or not.
>If China does not have the money from the US its growth will fail almost overnight.
You have this backwards - China is the US's largest foreign creditor.
>Even with the one-child policy the Chinese population is 1.3bn.
It's now a two child policy as China needs growth due to an aging population.
>Without US$ China will be unable to support itself.
82% of China's trade is with other countries than the US. Inward investment from the US certainly helped with the infrastructure boom a decade ago, but don't confuse that with debt - it was bought and paid for with cheap shiny shiny. China plans in decades, 4 years is an Age in US politics.
I would ask where you get your information, but then I saw the ref to the Honourable Robert P and laughed out loud.
"There are some 300m relatively wealthy people in China, mainly in the large coastal cities, but it is still a dirt poor place with average GDP per person of just $6K vs US at over $50K."
So what's the average GDP of the USA without the "dainty snowflakes in California and New York" and large coastal cities?
So what's the average GDP of the USA without the "dainty snowflakes in California and New York" and large coastal cities?
It's much easier to just drop whole states rather than trying to cherry pick "large coastal cities" so if you remove the states of CA and NY as well as DC (because numbers are reported for it) the GDP per capita is $53K which is less than a 5% drop. Funny story, if you actually look at the list you'll see states like Alaska, North Dakota, Wyoming making the top 10 while California only makes 10th place if you exclude DC. If oil goes back up it wouldn't be hard to imagine California being bumped down the list, maybe not as far as 17th like it was in 2012 but certainly lower than now.
Of course it's hardly a proper metric as Florida is fairly loaded with pensioners fleeing the cold weather of places like New York which likely drags Florida's numbers down and boosts New York's up. Plus you wind up involving all sorts of things that probably shouldn't contribute due to entanglements with Federal funds like does a military base raise or lower the number. Worse it doesn't normalize the value of a dollar based on purchasing power parity which would bring some of the lofty numbers of DC and other "large coastal cities" down substantially as a dollar in DC goes only about 80% as far as it does in the nation as a whole and about 65% as far as the cheapest places in the country.
If I owe the bank $1 its my problem, if I owe them $1m its the banks. The US can simply not pay.
Well that might work, except that the US needs to borrow more (and more and more) and where is it going to borrow all that from if potential lenders see them defaulting on their debt. Sadly the US is a lost making business at the moment.
Remember it was Regan who ran such a massive deficit that has led to the the Chinese largely owning the US, a deficit that still shackles US policy. Something Trump still has to understand. There was a reason Regan economics was labelled Reganomics, it was economics of the make believe, of the innumerate, of the fantasist.
Remember it was Regan who ran such a massive deficit that has led to the the Chinese largely owning the US, a deficit that still shackles US policy.
LOL! It's what I do every time I see the old "the Chinese largely owning the US" chestnut. China holds a whopping 6% of the U.S. debt. Hardly what one would call "largely owning". Notice in the first link that Japan is right up there with 5.8%. I grant it may be more common for people to make it look worse by comparing China's portion with only the foreign held total in which case it looks somewhat more impressive at 19.1% of the $6.2 trillion but still not exactly up to what one thinks of as "largely".
While we're on the topic, let's have a look at the other side of the coin and see what the U.S. is holding in foreign securities. Huh, the U.S. holds $9.4 trillion in foreign instruments and owes $6.2 trillion to foreign countries. It seems the "largely owned" by China theory is rather exaggerated.
The Democrats in Congress promised Reagan $3 in reduced spending for every $1 in tax increases he allowed. The spending reduction never happened. That's not to say Reagan bore no responsibility for the deficit during his years, but it has to be viewed in context.
There's no doubt that Reagan took us from double-digit inflation and high unemployment (a situation that's not even supposed to happen according to Keynesian theory under which the Democrats labor) and gave us the largest sustained peacetime growth we've ever seen. Increasing military spending brought us the so-called peace dividend after the Soviet Union tried and failed to keep up and collapsed under its own weight. That's quite a lot, but even Reagan had limits-- Congress was owned by the Democrats for all eight years Reagan was in office, and it's Congress (the House, specifically) that sets the budget.
Obama doubled our national debt in eight years, largely a function of the actions he undertook in his first two years, when his party owned Congress as well as the White House. The debt load went up more under Obama than it did under Reagan, Bush, Clinton, another Bush, and the previous 39 presidents combined. The last eight years equaled or exceeded the first 232. And unlike Reagan's relatively meager deficit spending, we have little or nothing to show for blowing all of that money.
"Yes, but no. Reagan would be considered centrist these days, like Thatcher."
HAAAAA, Reagan began the process that ended up with the subprime mortgage crisis of 2009. All build on imaginary financial 'products' like CDSs, CDOs and the Black–Scholes magic formula for generating money out of thin air.
"It's just our parents and other old people don't understand things have changed since the 80s"
We understand too well, we understand we were sold a lie and the current quantitative easing strategy (basically borrowing from the future) is one your grandchildren will be working long and hard to pay back.
Typical libtard speak:.. oh it can't be done, we can't change the world... Industrial production can't be done here anymore... ... yeah right, Germany and China are after oil states the richest in the world because of it.
We can, we just need to stop reading the liberal propaganda paid for by George Soros and his mates: http://www.politico.com/story/2016/11/democrats-soros-trump-231313
Germany rebuilt itself after being bombed to bits in WW2, it just take the will to triumph over the odds.
If German can, USA can, and with Trump it will get the jobs back stolen from us by a handful of greedy billionaires.
You do realize the donald is one of those greedy billionaires ... who has yet to show he cares about the avg American. He manufactures all his stuff overseas, his subcontractors buy Chinese steel.
He could have made at least some of his "premium goods" in the US, even as a token gesture, he could have speced American steel as well, it happens all the time by companies that truly buy American. That is what patriots do, not blame someone else who is doing the exact same thing he is doing.
Germany and China do not have the profit before all ethos displayed by US companies in their drive for "shareholder value". In Germany, labor has a spot at the table and helps plan the future. In China labor is cheap and currently almost limitless.
We manufacture as much as we did 40 years ago, automation has taken most of the jobs, productivity is at all time highs, but wages have not kept up. Who's fault is that?
The used car salesman trump will not be able to bring the promised jobs back... lets just hope he doesn't start a war because of his lack of skills and blaming someone else.
He could have made at least some of his "premium goods" in the US, even as a token gesture, he could have speced American steel as well, it happens all the time by companies that truly buy American. That is what patriots do, not blame someone else who is doing the exact same thing he is doing.
Yes, HE especially could have,
The Trump Organization is not a publicly-owner corporation, there is no REQUIREMENT to maximize shareholder profit by reducing costs to a minimum - just sheer unadulterated greed
2 things
First Libtards is a word that labels you as someone who reads Drudge and Breitbart and believes it so will be ignored by most.
Secondly after the war Germany and Japan had their industry rebuilt with money from the countries that beat them. Who is going to pay for the US to rebuild ? they have to service their debt first or the rest of the world wont sale them the machines and tools they would need to stock the factories they would also have to build, and guess what they would have deported most of the cheap skilled builders back to Mexico.
There we are, typical libtard behave. Discredit people who disagree as deplorables, repeat it can't be done and go to facebook to share liberal "news" articles implying the world is going to end with president Trump.
Luckily US citizens were smarter than this, most Europeans are still unaware of the massive scale they are being lied to by the billionaire owned mass media and the puppet politicians they are allowed to "elect".
>Germany rebuilt itself after being bombed to bits in WW2, it just take the will to triumph over the odds.
No - West Germany was rebuilt under the European Recovery Program very much from the outside - Merkins usually refer to this as 'The Marshall Plan'. East Germany did not fare so well until more recent times. Read some history.
> Germany rebuilt itself after being bombed to bits in WW2, it just take the will to triumph over the odds.
Oh, you mean like the will on display in Triumph of the Will by Leni Riesensthal?
China could ruin quite a few American companies. So could the Koreans and several other copy cat economies.
The focus is usually about the jobs going overseas, but the real crime is and was sending proprietary machinery, a vast storehouse of manufacturing knowledge gathered over several hundred years, access to millions of patents and vast intellectual property absolutely free of charge.
We simply gave it to them, in return for cheap socks that fall apart fast and electronic gizmos that mostly don't do much of anything productive.
I truly believe it could all be stopped but it would need to be done in a way to save next big thing inventions here, the related jobs and for godsakes the innovative knowledge of new stuff right here, not to mention jobs. The Germans are somewhat skillfull at this, and a world export powerhouse.
As for the socks industry, or completely copied designs for electronics, that's a lost cause.
We need to keep the next big thing at home and let them pay us for a change.
Not commenting on the discussion at large, just some of the numbers:
The $1.2 trillion in US treasury debt held by the Chinese Government is a much bigger stick than the US's $330 billion trade deficit with China.
That $1.2 trillion is only 7% of the US federal debt and similar to Japan's holdings. Foreign holdings of US government debt are 32.5% of the total. For the most part, Americans own American government debt.
and the US had an industrial base.
The US was the largest manufacturing nation in the world through 2010 by dollar value, when China finally overtook it. However, American manufacturing strength shifted away from TVs, appliances, and other everyday goods starting in the 1970s. Its manufacturing workforce also notoriously shrank during the period. But it very much had - and has - a sizable industrial base.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
