China Blamed For Global Slowdown
China’s accession to the World Trade Organization in 2001 had a far greater global economic impact than 9/11. It was one of the most important events in modern history. A warning America detailed in a 100-page report submitted to Congress by the Bush administration to mark the end of China’s five year accession to WTO on December 11, 2006. Bush and company identified “troubling indications that China’s momentum towards reform has begun to slow” according to Susan Schwab, the U.S. trade representative, who went on to accuse China that its “incomplete” reforms were “creating massive distortions that could leave the Chinese and global economies at risk.”
The fact is China has changed more than 3,000 regulations to comply with WTO requirements. It also reduced tariffs on goods of great importance to U.S. industry from an average of 25 per cent in 1997 to seven per cent today, with similarly significant reductions for agricultural products.
In addition, it has reduced or eliminated numerous non-tariff barriers, increased market access for international service providers and improved the transparency of its governmental procedures. These steps have expanded economic growth in both countries and contributed to a roughly 190 per cent increase in U.S. goods exported to China over the past five years. Today, China is America’s fourth largest export market ─ up from 15th a decade ago. Wal-Mart operated 66 stores in China at the end of 2006. Home Depot paid $100 million for a majority stake in China’s HomeWay to get a piece of China’s vast consumer market as it goes head-to-head with U.K.’s B&Q. Home Depot, like many other U.S. companies is counting on China to provide fresh growth as it runs out of room to expand in America.
When China joined WTO in 2001, its current account surplus (trade plus a few other cross-border payments) was a modest 1.3 per cent of gross domestic product. But in 2006 China’s surplus hit a breathtaking nine percent of GDP. In absolute terms, it has overtaken Germany’s surplus and even Japan’s, despite the fact that Japan’s GDP remains more than twice the size of China’s.
America’s repeated lectures to China and China’s reaction remind me of the “Chinese Sick Day” joke. Hung Chow calls into work and says “Hey, I no come work today, I sick, headache, stomach ache, legs hurt, I no come work.” His American boss says, “You know something, Hung Chow, I really need you today. When I feel like this, I go to my wife and tell her to give me sex. That makes everything better and I go to work. You try that.”
Two hours later Hung Chow calls again. “I do what you say, I feel great. I be work soon…. You got nice house.”
The fact is America’s problems were created by its career politicians, not the Chinese.
The fact is China has changed more than 3,000 regulations to comply with WTO requirements. It also reduced tariffs on goods of great importance to U.S. industry from an average of 25 per cent in 1997 to seven per cent today, with similarly significant reductions for agricultural products.
In addition, it has reduced or eliminated numerous non-tariff barriers, increased market access for international service providers and improved the transparency of its governmental procedures. These steps have expanded economic growth in both countries and contributed to a roughly 190 per cent increase in U.S. goods exported to China over the past five years. Today, China is America’s fourth largest export market ─ up from 15th a decade ago. Wal-Mart operated 66 stores in China at the end of 2006. Home Depot paid $100 million for a majority stake in China’s HomeWay to get a piece of China’s vast consumer market as it goes head-to-head with U.K.’s B&Q. Home Depot, like many other U.S. companies is counting on China to provide fresh growth as it runs out of room to expand in America.
When China joined WTO in 2001, its current account surplus (trade plus a few other cross-border payments) was a modest 1.3 per cent of gross domestic product. But in 2006 China’s surplus hit a breathtaking nine percent of GDP. In absolute terms, it has overtaken Germany’s surplus and even Japan’s, despite the fact that Japan’s GDP remains more than twice the size of China’s.
America’s repeated lectures to China and China’s reaction remind me of the “Chinese Sick Day” joke. Hung Chow calls into work and says “Hey, I no come work today, I sick, headache, stomach ache, legs hurt, I no come work.” His American boss says, “You know something, Hung Chow, I really need you today. When I feel like this, I go to my wife and tell her to give me sex. That makes everything better and I go to work. You try that.”
Two hours later Hung Chow calls again. “I do what you say, I feel great. I be work soon…. You got nice house.”
The fact is America’s problems were created by its career politicians, not the Chinese.
posted by Peter de Krassel's Custom Maid Politics at 10:53 PM
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