China as a Scapegoat in America's Political Campaign Ads
Quite interesting article in the New York Times this weekend about how China is emerging as the villain in America's political ad campaigns.
Both parties are shown to be playing up the threat of China, the ideal scapegoat for the west's persisting unemployment problems. Take a look here.
Aaah, do nations always need an enemy?! I guess it helps keep us little people together and in check...
bodaweiOctober 11, 2010, 03:03 AM
Just remember that the arguments are nonsense. Well, except for those people in the West who lose their jobs - but this is primarily because they are used to a much higher money income and resist taking a pay cut. They should of course come and live and work in China. This is exactly what happened when the 'New World' opened up. European farmers could not compete with the Americans so many migrated to where their labour could be put to better use. The wheel has turned.
Sure, I appreciate that the question of unemployment is sensitive and complex, but it is just interesting how politicians rally people (deflecting criticism) by drawing on foreign scapegoats, time and time again. It's a timelessly powerful tool.
johnbOctober 11, 2010, 03:12 AM
do nations always need an enemy?!
I wish the answer were no, but we (the US) certainly did seem to have it together a bit better when we were facing down the big bad Soviet machine.
No, see, that's the thing. You can prepare to bomb the ever living crap out of a country (USSR), but it's tough to do the same versus an idea (terrorism). Not saying it's a good thing (how many trillions did we waste on the Cold War) but it does seem to have a calming effect on American politics.
xiaophilOctober 11, 2010, 04:50 AM
I don't get the Chinese currency devaluation problem. If Chinese can devalue their currency and become so competitive, why cannot every other country do the same? And if they can, why don't they?
Another thing. From what I heard, the Chinese devaluation of their currency is actually a kind of subsidy from their government. Does this subsidy break any treaties? Or is it just that other countries don't like it?
At last .. a thread discussing economics! What's the matter with everyone, bored?
The reason 'everyone' doesn't do 'it' (it being some kind of manipulation of the currency) is that in a well-balanced economy you hurt as many people as you help. Well, actually more, but that is getting too technical. If you make your exports cheap for the world it is paid for by all domestic consumers (that is everyone) in higher prices. You hurt everyone except the owners of export businesses.
China is competitive basically because it can produce lots of things more productively than in the West. Primarily to date because of relatively low wages.
China has a very smart economic system in the sense that it plays to its strengths. You can think of it as selling 'embedded' labour. Even its trade in food stuffs is pretty smart - buying in stuff that other countries are better at growing, and exporting stuff that it is better at growing.
Australia by comparison - don't start me. China's trade policies are far more beneficial to its natural environment than Australia's trade policies.
'subsidy from their government'
There is no such thing as 'government' - it is people, you and me. Taxpayers' money. It is a subsidy to the owners of export industries (typically politically influential people.)
There are international laws that come into play particularly for members of the World Trade Organization, including China. But it is hard to prove China 'dumps' anything in other markets when its competitive advantage is so high. You have to prove that stuff is sold in the US, for example, at lower than the Chinese production costs. (It is nothing to do with US production costs.)
The reason "why doesn't every other country do the same" is that the last time everyone tried at the same time, the Great Depression happened. Since then there's been a gentleman's agreement not to do this. Any new rising economy of importance has been also convinced not to do this, most recently Japan. Japan was caught keeping its currency low, and after a stern talking to during the Plaza accord, got with the program and allowed 50% overnight appreciation. Well, over 2 years, but you get the idea. It appears China is not responding to the talking to, so we'll see what happens. The thing that got the world out of the Great Depression was WWII, let's hope it doesn't come to that this time.
I don't want to pick but I don't think that protectionism caused the Great Depression - it was rather a response to the Great Depression. A natural response you might think. In fact, go back 100 years and you'll find global trade much freer than today.
People love talking about this stuff. Today's news in Australia is that the A$ is nudging the US$ (99 cents today) and the protectionists are advocating taking the Aussie down to US 60 cents. Like in the good ole days. :)