You will forgive me if I vent a bit today. I guess we are all entitled to that now and then. But, I never vent until the needle on my gauge finally edges past the highest reading and enters the red zone. So, here we go — my Vent of the Week — red zone and all!
News Flash: China has criticized a decision by the United States to file a complaint with the World Trade Organization over copyright infringement. The Chinese Government says the move is ill-informed and will damage trade relations between the two countries.
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News Flash: China warns the U.S. that Congress tariff bills may force China to reconsider its policy toward U.S. investments in China.
News Flash: China snubs the G7 because it is angry about U.S. complaints to the World Trade Organization over Chinese trade practices.
News Flash: China expressed strong dissatisfaction with a U.S. decision to impose penalty tariffs on imports of Chinese high-gloss paper and urged Washington to reconsider the matter. "China strongly requires the U.S. side to reconsider the decision and make prompt changes," they said
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News Flash: China is now #2 in exports for the whole world!
Shall I go on? I could easily fill this column's pages with this sort of sophomoric dribble. China is made to look like a raging tiger about to devour the U.S., that tired old bull, and, for that matter, the rest of the world, too. It is lauded about its super know-how, super business sense, and absolutely is about to corner the market on world economic power very soon!
And to top it all off, China is constantly telling us how we should do business, it seems. They seem never to be wrong when it comes to business decisions, either. And, of course, it is the U.S. that is always at fault if some problem develops. It is the U.S. that is constantly cited as being (1) unfair, (2) a bully, (3) imperialistic, (4) militaristic, (5) wrong 98 percent of the time, (6) greedy, (7) pushy, — shall I go on?
Obviously, you are getting the drift of what has blown my head gasket here. The relationship between China and the U.S. has, since 1994 when they pegged their currency to a price 40 percent below the dollar, been all demand by the China powers that be and all acquiescence by the U.S. business sector and government.
Oh, not that there hasn't been a voice of protest off and on by an analyst or columnist here and there, or some hugely outnumbered congressman, but in the main, we have just rolled over and played underdog for the last 13 years when it comes to China. And for the life of me, I just can't figure out why this is allowed to go on.
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Now, let me say this before I go on. I am not interested in putting any one group or person on the carpet here today, I would just like to get a few HUGELY IGNORED facts on the table for all to consider. And while I can't say that I get to read every last single published document about China and the U.S., I really do read a lot of them and I have not seen any of these facts in BOLD TYPE anywhere in the media or government reports — or for that matter in scholarly papers or widely attended, well recognized national seminars.
But, let me start with these facts from the World Bank.
The world's GDP (official exchange rate basis) in 2005 was over $44 trillion.
In 2006, it is estimated that this grew by about 4.5 percent making the 2006 number about $46 trillion (final numbers are still not available).
Of this $46 trillion, the U.S. and the EU account for about $13 trillion each, or 52 percent of the total. Japan is about $5 trillion or about 11 percent. The United Kingdom (Britain) accounts for just over $2 trillion or about 4.5 percent. China comes in at about $2.5 trillion or about 5 percent.
All of these, a total of five countries account for nearly 75 percent of the world's GDP. The balance of 25 percent plus is distributed amongst 172 separate and economically accounted for countries.
Wait a minute! Did they say China was only $2.5 trillion? Did they say that their world share was a paltry 5 percent? Wait a minute! Wait a minute! How is it that a tiny fraction of the world's economic engine is "wagging the rest of the dog!?!" That makes no sense!
All I read about is how China is taking over everywhere as the world's economic power du jour, the engine that will run everything in 5-10 years! And we are told how they are pushing that old geezer called the U.S. out of its cat-bird seat as the number one economic power in the world!
Well, I say "Hardly!"
FACT: China has four times the number of citizens as the U.S., four times the number of citizens as the EU, 10 times the Japanese population and yet the U.S., EU and Japan outstrip the GDP of China by over 12 times, 2.5 trillion to 31 trillion. (And get out of here with using "purchasing power parity" comparisons. GDP is the only true measure of any economy. Period!)
FACT: China is proud of its $2.5 trillion GDP. But, listen to this hard fact. Since 2001 the U.S. has increased its GDP by $2.7 trillion. Yes, in other words, China's long trek to $2.5 trillion GDP was duplicated by the U.S. in 5 years. Now, that's a real 5-year plan!!
FACT: China has a GDP per capita of $7,600, compared to the U.S. GDP per capita of $43,500. That is only about one-sixth of the U.S. Do you expect that to shrink to parity anytime soon? Come on! The productivity of the U.S. worker is a phenomenon unmatched anywhere in the world! That huge disparity is not about to fade away.
FACT: China's government budget was estimated at $446.6 billion in 2006, with true expenditures estimated at $489.6 billion. The U.S. government budget was about $2.4 TRILLION, with a true expenditure of $2.66 trillion. If my math is correct that is $3.76 per person for China with a population of 4 times the U.S. and $8.96 per person for the U.S. If the populations of the two were equal, one could say that the U.S. amount was 4 times higher or $35.86 or nearly 10 times per person compared to the China level. Another disparity that won't fade very soon either.
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