{"id":807,"date":"2007-10-13T00:00:00","date_gmt":"2007-10-13T00:00:00","guid":{"rendered":"http:\/\/chisnell.www216-119-142-248.a2hosted.com\/chizblog\/?p=807"},"modified":"2017-08-06T05:15:02","modified_gmt":"2017-08-06T05:15:02","slug":"feeling-chinas-lead","status":"publish","type":"post","link":"https:\/\/www.chisnell.com\/chizblog\/feeling-chinas-lead\/","title":{"rendered":"Feeling China\u2019s Lead"},"content":{"rendered":"

Last Sunday I heard the women in the restaurant booth next to mine complain about toys from China.\u00a0\u00a0One, in particular, was loud and vehement in her opinions.\u00a0\u00a0\u201cI\u2019m going to buy American from now on!\u201d she practically yelled. \u201cChina should just leave us alone!\u201d<\/p>\n

And no, I didn\u2019t set down my bite of feta cheese omelet (which was pretty amazing), to counter her points.\u00a0\u00a0Angry as she was, she would never have heard me.\u00a0\u00a0More, her comments revealed some pretty basic misunderstandings of consumerism, free markets, and our trade deficit.<\/p>\n

I won\u2019t write here about the faulty\u00a0inspection system in China (which does need to be addressed) or the poor inspection systems in the US.\u00a0\u00a0No, I won\u2019t remind anyone about the Tylenol scare of the 1980s or the Firestone tire worries of 2000.\u00a0\u00a0I won\u2019t talk about Sharp\u2019s 2006 fiery battery recall or of the pet food recalls this past spring.\u00a0\u00a0It would be wrong of me to write about the Nestle recall of chocolate bars with plastic in them this past April, or Gerber baby food recalls this summer, or that for the\u00a0second<\/em>\u00a0time in three years Topps Meat Company was cited for poor inspections and this fall\u2019s beef recall is the second largest in US history.\u00a0\u00a0(Topps finally closed a couple of weeks ago.)<\/p>\n

What\u2019s that?\u00a0\u00a0These aren\u2019t toy recalls?\u00a0\u00a0Okay, so I also won\u2019t write about K-Mart recalls of toy rattles which choke babies, Hi-C drink recalls of \u201cCool Cuffs\u201d toys, Kenner\u2019s recall of its Colorblaster paint guns, or Lionel Train\u2019s recall of its Snoopy train.<\/p>\n

But none of that is really the point.\u00a0\u00a0The fact is, China products are cheap, US consumers want cheap products fast, and free markets supported by US trade policy allow and encourage US companies to find their products and parts from China.\u00a0\u00a0Put simply, the US buys far more from China than it sells<\/strong>\u00a0<\/strong>to<\/em><\/strong>\u00a0<\/strong>China, creating a trade imbalance or deficit<\/strong>.\u00a0\u00a0As the US total trade deficit approaches $1 trillion (yes, that\u2019s\u00a0trillion<\/em>), about one \"\"quarter of that is trade with China.\u00a0\u00a0I mean really, what do you think Wal-Mart means when it talks about \u201cPrice Rollbacks,\u201d \u201cBeware Falling Prices,\u201d and \u201cSave Money. Live Better\u201d?\u00a0\u00a0\u00a0It\u2019s only those last two words which are cautionary.<\/p>\n

And many of us do benefit.\u00a0\u00a0America\u2019s poor can afford $35 DVD players, Microsoft and Mattel can move more products, and Chinese workers get jobs.\u00a0\u00a0US companies which haven\u2019t outsourced to low-wage countries lose, of course, as do children who chew on their Barbie Dream Houses, but that is the price of a US policy (and an ignorant consumer-demand market) which perpetuates an unsustainable trade deficit.\u00a0\u00a0[China made almost $25 billion in September alone as a trade surplus while the US lost nearly $60 billion the same month.]\u00a0\u00a0According to BBC<\/a>, even with all the toy recalls, the US purchase of Chinese toys continues to increase.\u00a0\u00a0Worse, our US economists call these numbers \u201cGood news,\u201d because they are slightly better than the summer imbalance.<\/p>\n

Truly, economics is complicated, far too much for a simple blog entry this evening, but there are bigger issues about the Chinese lead in its trade than some paint. (Yes, read that every way you want.)\u00a0\u00a0Here are a few big-ticket issues which we should address now in order to better secure our global position with China:<\/p>\n