Shikha Dalmia writes for Forbes and says, China Bashing is for Losers. My first thought was, who is this sensible person?
After all, China bashing is a popular sport in America and ranks slightly below basketball, baseball and football. Whenever Americans lose jobs or there is a national election, it is China bashing season— before China it was Japan or some other country or race or religion.
I discovered that Dalmia is a senior policy analyst at the Reason Foundation, a nonprofit think tank. She is also a columnist at Forbes and won the first 2009 Bastiat Prize for Online journalism for her column in Forbes and Reason magazines.
What she says about China bashers is true. Since I started writing iLook China, I’ve discovered that most of my critics know little to nothing about China and base their flawed opinions on stereotypes that should have died with Mao in 1976.
Instead, ignorance rules the day and politicians love that because it leads to votes from people who shouldn’t vote.
However, Shikha Dalmia knows what she is talking about. She points out that protectionism doesn’t work.
Dalmia provides evidence to make her point.
She writes that between 2005 and 2008, the yuan rose 21% but the trade divide, instead of going down, went up by $66 billion because while a strong yuan increases the dollar price for Chinese goods, it also lowers the yuan price of foreign raw materials.
She then uses the iPod as an example. The iPod, Dalmia says, is designed in America and its 451 parts are made in dozens of countries. When all those parts arrive in China to be assembled, that adds only $4 to the price if a $150 item.
This means if the US punishes China by erecting trade barriers, people lose jobs all along the manufacturing line, which starts in the US at Apple’s Cupertino headquarters.
Dalmia concludes by stating a truth few know—that Republicans and Democrats are sowing the seeds of their own destruction, which will lead to more suffering when the US economy drops lower.
I suggest you read Dalmia’s piece at Forbes to understand why global trade is too complex for simple minds to understand.
Learn more about the Chinese Stereotype Alive and Rotten in America
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