After establishing relations with the United States and imposing the One-Child Policy, China, in 1986, opened the country to foreign investments and encouraged the development of a market economy and private sector.
China also started the long process to join the World Trade Organization (WTO). It took China another 15 years of diplomatic struggle to became a full member of the WTO. To join, China had to significantly change its economy. These changes were difficult steps for China and conflicted with its prior economic strategy. Acceptance into the WTO meant China had to engage in global competition according to rules that it did not make
The BBC reported, “China’s formal membership comes exactly one month after the 142 members of the World Trade Organisation (WTO) ratified its application at the world trade talks in Doha in the Gulf state of Qatar, and the Chinese government formally approved the deal.”
What happened to China after joining the WTO?
WTO.org said, “in 2001, China’s trade in goods was valued at $0.51 trillion, ranking 6th in the world, but by 2014, it reached $4.3 trillion, growing over 8 times.”
By 2016, China was exporting $2.27 trillion in goods and importing $1.23 trillion,” and OEC report said.
China’s top five export destinations were the United States at $436 billion (19% of the total), $250-billion (11%) to Hong Kong, $148 billion (6.6%) to Japan, $99 billion (4.4%) to Germany, and $87.2 (3.8%) billion to South Korea. If we subtract the United States, China exported $1.834 Trillion worth of goods to the rest of the world.
China also buys products from the United States and other countries. It’s top four import countries were the United States at $122 billion (9.9%) in goods, $121-billion (9.8%) from South Korea, $120 billion (9.8%) from Japan, and $83.7 billion (6.8%) from Germany.
If we subtract what China buys from the United States, China imports good worth $1.08 Trillion from the rest of the word, and did you notice that China has a trade deficit with some countries? If we focus on just South Korea, China bought more goods than it sold by $33.8 billion.
What goods does China want from other countries? China’s highest value imported goods are electronic circuits and micro-assemblies, crude oil, iron, cars, mobile phones, and then soya beans.
In 2017, China exported $2.2 trillion of its production. The EU exported $1.9 trillion that year.
There is also a common misconception that the United States doesn’t make anything anymore, and it doesn’t help that Donald Trump, a malignant narcissist, and serial liar, reinforced that thinking during the presidential debates in 2016.
What do the facts say?
The Balance reports, “2017, total U.S. trade with foreign countries was $5.2 trillion. That was $2.3 trillion in exports and $2.9 trillion in imports of both goods and services.” China exported $2.2 trillion to the world that year, less than the United States exported from its manufacturing sector.
How many jobs in the U.S. does that $2.3 trillion in exports support and how many jobs are at risk in the United States due to Mr. Trump’s trade war?
CNN Money says, “analysts say that tens of thousands of American workers are likely to lose their jobs—and upwards of two million jobs are at risk—more or less as a direct consequence of the Trump administration’s trade policies, and the retaliatory tariffs that follow.”
Lloyd Lofthouse is the award-winning author of My Splendid Concubine, Crazy is Normal, Running with the Enemy, and The Redemption of Don Juan Casanova.
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* Per a 2008 Congressional Research Service report, a “potentially serious short-term problem would emerge if China decided to suddenly” sell its holding of U.S. government debt. Possible effects could include:
“a more general financial reaction (or panic), in which all foreigners responded by reducing their holdings of U.S. assets”;
“a sudden and large depreciation in the value of the dollar”;
“a sudden and large increase in U.S. interest rates”;
a stock market fall; and/or
* The same report states:
The likelihood that China would suddenly reduce its holdings of U.S. securities is questionable because it is unlikely that doing so would be in China’s economic interests. First, a large sell-off of China’s U.S. holdings could diminish the value of these securities in international markets….
Second, such a move would diminish U.S. demand for Chinese imports…. A sharp reduction of U.S. imports from China could have a significant impact on China’s economy….
* During a visit to China in February 2009, Secretary of State Hillary Clinton said:
By continuing to support American Treasury instruments [i.e., buy U.S. government debt] the Chinese are recognizing our interconnection.
We have to incur more debt. It would not be in China’s interest if we were unable to get our economy moving again.
The U.S. needs the investment in Treasury bonds to shore up its economy to continue to buy Chinese products.
* In August 2007 during a currency dispute between the U.S. and China, two leading officials of Chinese Communist Party bodies suggested that China use the threat of selling U.S. debt as a “bargaining chip.”
* In February 2009 during a dispute over U.S. arms sales to Taiwan, a Chinese general made the following statements in the state-run magazine Outlook Weekly:
Our retaliation should not be restricted to merely military matters, and we should adopt a strategic package of counterpunches covering politics, military affairs, diplomacy and economics to treat both the symptoms and root cause of this disease.
For example, we could sanction them using economic means, such as dumping some U.S. government bonds.
* One month later while appearing before China’s parliament, the head of China’s State Administration of Foreign Exchange said:
the U.S. Treasury market is important to us. … This is purely market-driven investment behavior. I would hope not to see this matter politicized.
The question and answer to ask: “How many people will lose their jobs/income in each country?”
To discover the answer we must know how much China exports and imports with the world and then subtract that number from what it exports and imports with the United States.
“China is the largest export economy in the world. In 2016, China exported $2.27T and imported $1.23T, resulting in a positive trade balance of $1.04T.”
US exports to China in 2017 were $129.9 billion
US imports from China to US were $505.47 billion
Conclusion, even if China stopped trading with the US, it would have a surplus of exports to the rest of the world of more than $1.766 Trillion and imports of more than $911 billion from the rest of the world. In fact, the odds support that imports might not drop that much because manufacturers in the rest of the world are in a position to offer similar products to China to replace what they were buying from the U.S.
What happens to people when US workers lose their jobs in the US vs China?
US exports to China support 1 million American jobs every year.
For sure, more than a million jobs will be lost in China but — China had a history of finding other jobs for those workers and even retiring workers early and sending them back home to rural villages where they pay no rent, property tax or mortgage payments. In China, most rural homes are owned by the collective (government and workers), and most of those rural homes also have land they grow food on. Early retirees go home with a Social Security check showing up every month and they don’t have to worry about losing their house. The younger Chinese factory workers are hired by state-owned factories or sent to work on infrastructure projects throughout a country that is building new cities, dams, solar and wind energy power project, highways, etc. And China is doing the maintenance necessary to keep its newer infrastructure working. China is now the world’s leader in wind and solar power production and is building newer power plants with better filters to clean the air so they don’t pollute as much.
In the U.S. workers go on unemployment until it runs out and then many of them will lose their homes or rentals and possibly end up homeless (if they don’t have family or friends to take them in) and begging to survive if they can’t find a church soup kitchen that feeds the homeless. Back in the U.S. infrastructure projects are being neglected, the railroads are in horrible shape with hundreds of not thousands of train derailments annually, bridges are wearing out and collapsing, dams are in need of repairs, schools are decaying and falling apart, airports are not being maintained and modernized, the electrical system is also in need up updating and most of the power plants are old and should be replaced.
We are in pretty bad field position and running out of time that is how New England beat new Atlanta falcons on the superb-all as well the New York Giants beat the New England Patriots tuice runing oír of time . Now the last one , The Eagles 🦅 beat the patriots with a lot of time left , I mean the game it’s not over ,
In sports the clock always runs out and the game ends. In politics and govenrment, the game never ends.
Until God stop those corrupts Goberment . Daniel 2:44 .
Thanks Lloyd what a caudal OF Knowleage hope you doing well and I hope your information will play a great role in the next move because it’s amazing, to be honest I think it’s time you knows that you can run this country and no many inside the goberment are the kind of Person you are
I don’t think I want God to step in. Last time He did that, the only survivers were on Noah’s Arc after the great flood killed everyone else.
Well by there 8 people should be compared with millions or billions only God knows but as you very well knows my friend Lloyd the global crisis it’s not easy/imposible to fix by the tipe of Government we have .
The ice melting , greeds people are controlling everything it’s the fact Lloyd it’s sad but true , you are smart ENAFF to agreed and I’m more than happy that be blessed to meet you , the promise land could be ready for you , don’t worries be happy it’s the best thing Mr. It’s very hard and critical times not many people went to the schooll an a few knows what you knew