Thursday, October 18, 2012

The political debates on China

Both presidential candidates blame China in the debates, since both do not have solutions to our problems. It is politically correct but actually is dead wrong.

* Will not gain jobs back from China.
The $20 per hour wage can never compete with the $2 wage.

To illustrate, Apple will not gained a lot of jobs returned to U.S. for too many reasons:

1. There is a huge difference in wages. You cannot live with a $2 per hour wage in U.S.
2. Our unions will never allow those forced overtimes, monotonous jobs and dormitory conditions.
3. Apple's products depend on rare earth elements that are only available in that scale and prices in and from China.
4. Our taxes are getting higher due to the generous entitlements and welfare, expenditures on the two Middle East wars, and the high cost (as a % to GDP) to service our public debts that is getting higher and higher.
5. There are about 40,000 technicians and engineers to support these manufacturing jobs at peanut wages. Where can we find so many qualified folks in U.S.?
6. China's internal market for Apple's products will be potentially larger than U.S. Chinese do not mind to pay for double the U.S.'s prices to boost their social status.
(Victoria Secret's could make a big hit if CCP allows folks to wear underwear only) :)

* If we continue to bash China, we will suffer from consequences which are bad to the U.S.
1. They will withdraw the public debts, which would cause us a deeper and longer recession.
2. We'll lose a good trade partner, since our major products do not compete with each other at least for now.
3. When you treat them as enemies, they will become one.
4. When we stop to let their products in, they will be replaced by other low-wage countries at higher prices and less quality. The recent tariff in tire does not gain us any jobs but the consumers suffer dearly, while the politicians declare 'victory'.


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