Walmart's push for USA made stuff hits snag

[werepossum]

Because they pay their employees shit wages..and...wait for it...their money is not even close to being on equal footing with ours. Let China's currency float against the US dollar and quit using the Chinese government to keep it pegged to the dollar and see where all of this goes.

Yep, China has built in a structural labor cost advantage, and given that they have a demonstrated willingness to kill or imprison people who don't play along I doubt that's going away because the Chinese people demand it. One thing on our side though is expensive oil, as increased shipping costs help equalize the cost of products. Doesn't make much difference to have 20% lower production cost if shipping adds it right back.

 

[werepossum]

Thats gloomy.

You miss 1 major thing though. What is the reason that China can produce a blender for $10?

Once you get wealth pumped into China, you get people wanting more things, just like you see in every other developed country. That grows Ag demand, and you then see the US fill the demand. There are no profits in the long run right, so this is simply an adjustment in the global economy. China is consuming massive amounts of stuff right now, and its growing. Its middle class is also growing, and they will want people to produce things.

In capitalism there are winners and losers. The losers lost because they could not compete, and the winners won because they did it better. You can have illegal activity, and government regulation can be inserted there, but on the whole, we want global competition.

China concentrated hard on consumer goods, so they can produce pretty much anything they want to allow their people. True, as they can afford more and better food we can fill that void, but it's hard to not project a repeat of World War II when the heavily industrialized USA and Soviet Union out-produced Germany, Italy and Japan. This time around it's Red China with the industrial base and our role is reduced to selling them food and raw materials. Effectively we're functioning as a Chinese colony - which is amusing given the vast disparity (at the moment) in military strength.

I wouldn't so much mind global competition except that since Clinton removed the bans on technology transfers, our only means of competing with China and like nations is with increased productivity or with matching their wages. The first is extremely difficult as they not only have access to the same production equipment but are rapidly becoming the people building the production equipment, suggesting that soon they'll have the productivity advantage. The second is a race to the bottom.