Does the U.S. need China? [Most Commented]
Reduce the trade deficit with China -- and clean up our economic mess. That's what Peter Navarro, business professor at UC Irvine and CNBC contributor, argues in an Op-Ed in Tuesday's pages. This would significantly reduce the overall trade deficit, he writes, as the U.S. owes China more than $1 trillion, while China holds more than $3 trillion in foreign reserves. Further, he points out that China doesn't just use cheap labor; it also employs practices that are illegal under free-trade rules and prohibited by the World Trade Organization. Navarro cites examples including the piracy of U.S. technologies and trade secrets, duplication of brand names, undervalued and manipulated currency, and export subsidies.
Make no mistake. All of these real economic weapons have led to the shutdown of thousands of American factories and turned millions of American workers into collateral damage, all under the false flag of so-called free trade.
The second myth we must expose if we are to ever reverse the job-killing trade deficits we now run with China is the idea that free trade always benefits both countries. That doesn't hold true if one country cheats on the other. Instead, when a mercantilist China uses unfair trade practices to wage war on our manufacturing base, the American economy is the big loser.
Here's what readers are saying about the U.S. economy and its relationship with China.
American corporations and consumers are also to blame
Very nice, but remember that it is American corporations that produce their goods in China and import them for the U.S. market, and it is American consumers that want them at low cost. There is room for drastic improvement, but don't hold your breath waiting for it, as none of the players in this game have the muscle and fortitude to do anything about it.
Decreasing oil importation is also key
Great article, except I don't know why you took out oil imports. Eliminating the importation of oil would also almost eliminate our trade deficit. It's time to do so. Using NG to power semi's would be a great and cost effective start.
Stop supporting poor working conditions
If American execs had any ethical standard, they would not export jobs to countries which allow their citizens to work under unsafe conditions for slave wages.
The U.S. should cut China off
Why is it that so many Americans feel that only the United States is to blame for the mess in the world's economy? There isn't any doubt that China plays hard ball and its about time that the US and all of its citizens recognize that we need to play just as hard as they do. We need to restrict their imports just like they restrict ours. Why are we so willing to let them kill our pets, kill our sick, and poison us with bad dry wall. Every time there is a mess with their imports, somehow its our companies fault. Lets cut them off from the largest economy in the world and be done with it.
The U.S. needs China
Can't cut off China completely. We need their money. Without it, the US Government can't borrow and would default on her debt. If we can't borrow, we can't maintain our social security and defense spending. Almost every major countries is running a trade deficit with China just like almost every major countries ran a trade deficit with Japan in 80s. Remember how scary Japan looked to us on those Japan bashing days? China is playing a clever game with outright violating WTO rules. We have a lot of anger and little will to impose an effective solution aimed at reforming ourselves.
*Spelling errors in the above comments were corrected.
Photo: China's currency controls have been blamed for an unexpectedly large global trade surplus that widened to $11.4 billion in April. Credit: How Hwee Young / EPA