U.S. and China should be best trade partners. Most of their
major products are needed to each other. Today’s low transportation cost is
favorable even their distance is far away. EU countries produce many of our
products such as jet planes. Hence EU and U.S. are not perfect partners.
However, they are allies with similar ideas in cultures and governments. The
following are the benefits for both countries and what would happen for a
full-fledged trade war.
o
Agriculture. China has about 20% farm land of
the U.S. For example, U.S. is cheaper to produce one pound of beef in the U.S.
even the U.S.’s living standard is substantially higher.
o
Energy. Per capita, China is lacking in energy
resources. LNG would be one of the biggest export to China.
o
Technology. In general, China needs many high-tech
products such as chip technology to produce machines that produce memory.
o
China is good in adapting technologies to
applications / consumer products. China lacks of basic research that U.S. has
accumulated for decades.
o
China still has abundant of skilled labor and
sufficient infrastructure.
o
China has a huge market for U.S. products. To
illustrate, an approved drug could save thousands of lives in China.
o
It has benefitted many of the U.S. companies. It
may have saved GM from the second bankruptcy.
o
U.S. had a services surplus of $40.5 billion in
2018. The leading services are travel and education.
o
The cheap Chinese products are beneficial to the
U.S. consumers. If the trade war continues, many factories of these products
will be moved to other low-wage countries and our total trade deficit will not
change.
o
Many U.S. companies such as Apple, Nike and
Boeing are making good money from the growing middle class in China. When we
move the factories to low-wage countries such as Vietnam and India, they are
not wealthy enough to buy our higher-end products.
o
Traditionally China’s saving rate is high and
should be better as a lender. It is changing due to the debt bubbles in China.
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