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Wednesday, August 13, 2008

Trade with China

You probably already know that China is one of the United States's largest trading partners. Likewise, you probably also know that the US has an enormous trade deficit with China, annually importing hundreds of billions of dollars more worth of goods than it exports.

Do you know what the US imports from China and what it exports?

I ask because the standard answer does not provide the full picture.

Yes, the US imports lots of toys, clothes, and shoes from China. If you don't believe me, just check the labels on these products.

However, by doing business with China, "American" companies are also required to comply with many Chinese political practices that would be unacceptable in the US. Companies like Google, Cisco, and Microsoft essentially help China monitor and censor information. Clyde Prestowitz:
In fact, the global corporation acts as a conveyor belt to carry non-democratic values into democratic societies. This is not to say it can't work the other way around, but the power relationships are such that it's more natural for a Google to yield to China's Internet police than to defy them.
The US exports machine, appliance and airplane parts, seeds, and plastics to China.

However, the US also exports its inequality. Twenty-five years of integration into the global economy has made the distribution of wealth in China increasingly unequal. The World Bank recently reported on this topic, but the fact is obvious to anyone watching the Olympics. Consider all those empty seats in sold out sports venues:
Officials and observers offered several explanations for the empty seats. Some speculated that tickets reserved for sponsors and VIPs might be going unused in preliminary or qualifying rounds as officials with a claim to them wait for the finals.
I face the same problem every time I attend a AAA baseball game in Louisville. The overwhelming majority of box seats are empty -- sold before the season begins to local corporations and elites -- but the outfield area is often packed with fans like me who hold tickets only to that day's game.

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