Why do we have to buy from China?

[The Big Al]

With the recent scandals over chinese products I think this should be up for debate.

Why should we HAVE to buy from China?

Everything is made in China right now. It's hard to go through a year without buying something from China. The computer I'm typing on right now was made in China.

Here's my opinion of on the subject.

We don't HAVE to import this stuff from China.

Right now we have millions of people either unemployed or underemployed. We have factories laying idle. If the United States had the political will we could make everything China imports ourselves.

This would be great for the country. Not only would it ensure safety with products being made with by U.S. standards but would also put people to work, lowering unemployment and underemployment. Tax revenues would increase with people making more money and consumer spending would increase as well. Granted prices would be higher but with people working and making more money they're buying power would increase.

It's win, win, win except for China and the companies that exploit their labor.

Obviously there are those who disagree with me.

 

[Fig]

I do. While you are correct that increased employment would likely result, the general quality of life of most americans would actually take a significant hike in the down direction (ie, less ability to purchase the things they want to purchase).

 

[The Big Al]

Actually, I've seen the opposite. The loss in wages caused by outsourcing is greater than the decrease in prices. Also, more employment would mean higher wages due to increased demand for workers. Though, this is in Michigan which has been hit the hardest by outsourcing.

Granted just cutting trade with China wouldn't fix all the problems in the economy but our trade policy sucks and I think these latest problems are only the symptoms of a much greater problem.

 

[Argy]

Business owners are going to look for the cheapest labor possible, and China is of course going to be cheaper than America. That's the bottom line.

 

[Jeff]

The loss in wages caused by outsourcing is greater than the decrease in prices.

Which is exactly why outsourcing happens. You could tell all the companies "hey guys, hire in America, it will make the quality of life here better", but they won't listen, money talks.

 

[Fig]

The losses of wage are greater than the drops in prices, but they affect far fewer people.

Even if you talk about increased wages, you are still only looking at a single economic sector - factories. White collars, farmers, shop clerks, and virtually anyone whose job was never under threat to go to China in the first place won't benefit nearly as much, if at all.

 

[The Big Al]

You're forgeting there is a finite work force.

Right now the people in the occupations you named are competing with factory workers for their job. With people competing for jobs wages go down. If the factory workers go back to the factories they aren't competing and insted are competed over and the wages go up. It simple supply and demand.

And I know the whole "money talks and bullshit walks" line. But the race to the bottom line is the true bullshit. What's happened recently is just a symptom of this terrible economic policy.

 

[Archaic]

Sorry Al, but economic theory pretty much disagrees with your entire arguement here. The factory workers in America are competing against the factory workers in China for jobs, and the costroductivity ratio of Chinese workers is significantly better than what it would be if those jobs were in America. Wages might go up, but it's in a relatively small percentage of the population, while the price increases impact on practically everyone, causing an overall drop in the quality of life. You'd see a lot of low and middle class families who didn't have factory workers as their bread winners suffering badly.

The race to the bottom line, really, is what drives economic growth. The issue is when you have people making short-sighted decisions that give inefficient long term results. Moving work to China is not one of those though.

 

[Talon87]

Here's my opinion of on the subject.

We don't HAVE to import this stuff from China.

Somewhere in this world, Keynes is rolling over in his grave.

Right now we have millions of people either unemployed or underemployed. We have factories laying idle. If the United States had the political will we could make everything China imports ourselves.

Yes, we could. But as Archaic explained, it would be at a greater cost. Right now, we are able to purchase a RadioShack alarm clock for $20 or a Panasonic TV for $100. The prices would rise (for sake of argument; using hypothetical values) to $30 and $120, respectively, if you were to "force" the market to employ American craftsmanship over Chinese. With no noticeable increase in quality. If you want an increase in quality, that will drive the prices up even further. The point is, bringing the job market to America will not magically "raise quality while lowering cost." I really don't see how you could have believed that. :\ It is because the Chinese work for wages much less than their American counterparts do that the prices of these goods can be as low as they are, putting quality of craftsmanship to the side.

consumer spending would increase as well. Granted prices would be higher but with people working and making more money they're buying power would increase.

No, it wouldn't. You have more people who are able to buy (i.e. unemployed), but previously-employed individuals are still making the same wages as before. Their buying power has moved nowhere. In fact, because prices of everyday goods are now higher, people can afford to buy less with your plan. Sammy used to be able to get two Wii games for Christmas for $100, but now he can only get one Wii game for Christmas since the price of Wii games doubled after we passed your bill into law making it so that Wii games have to be manufactured in the US.

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[size=-2]Let me offer you a real-world example of how the Free Market operates. You don't have to like it; I don't like the example I am about to tell you myself! But the fact of the matter is, this is how the world works:

In the computer industry, we have a particular technology X. Let's say "a hard drive which can store 500 GB of information and retrieve it at 7200 rpm." For sake of argument, let's say this technology is classified as "normal" or "average" today. Not the best, not the worst. There are two directions future R&D can take:
Path 1 - find a way to store more data and retrieve it faster
Path 2 - find a way to make the existing technology more stable

You see, the HDD described above will die after approximately 10 years of average use; 5-6 years of use by your typical gamer; and as little as 2 years of use by somebody who uses BitTorrent daily. So it is in our interests (as a society) to try to find a way to make this HDD more stable. To try to find a way to make HDD technology better capable of handling the strain placed upon sector writing by BitTorrent; or the damage caused by moving the HDD around while it is in operation (something that laptop users frequently do).

However, the market of Today doesn't care about any of that. If you look around, computer technologies "get better" by increasing their performance barriers, not by increasing their quality barriers. HDDs that died in 2003 after two years of torrenting will still die today in 2007 after two years of torrenting; nobody cares. All of the effort has been put into finding ways to cheaply manufacture technology. The care for quality HDDs is completely absent from today's market. Nobody but me, you, and the paranoid few would purchase HDDs from a company who says, "We're four years behind the competition in terms of max specs, but we're four years ahead of them in terms of durability. " They'd be out of business overnight.

The Free Market demands products that are cheap but get the job done. If the product is cheap enough, then the Market will support it even if it dies within a year because it can be affordably replaced. (Real world example: light bulbs.) The same is true of hard drives. If I buy a SeaGate 500 GB hard drive today, it will cost me $169 at Fry's. Now sure, it might die in two years after all the torrenting I do, but in two years' time, that same HDD will be on the clearance shelf for just $69.99. I can either buy it again at an even lower price, or I can upgrade to a 1 TB drive that (by 2009) might be $169 itself. So long as the product works, today, people don't mind cheapness.[/size]

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People want things now. People want things cheaply. People want things to work. The difference in Chinese craftsmanship is not much different from that in the United States (at the factory level, e.g. making DVDs or cotton t-shirts). Since the difference in quality is minimal, while the difference in cost is extreme, it is a no brainer why the entire planet would benefit from allowing the Chinese to make the goods instead of the Americans.

 

[The Big Al]

That's the problem. People don't think about the long term anymore. They don't think about the costs beyond the price tag. They don't think that in two years they're going to have to buy a new HDD. That's half of the problem.

I said we could. I said we would be better for it. Will it ever happen? No. Which is sad.

 

[Archaic]

You seem to have missed the point there Al. The quality issue is separate from the country of manufacture. You could make the HDD's from that example in higher quality without moving them back to America. The whole point was that, to make something for exactly the same quality in America as it's currently being made in China, it costs more.

And honestly, while it's off the main point of this discussion...a person who buys a HDD and uses it enough that it'll fail in 2 years is more than likely aware of that fact, and quite happy with it, given that they're likely early adopters of technology anyway, and expect to upgrade within that time frame.

 

[Talon87]

And honestly, while it's off the main point of this discussion...a person who buys a HDD and uses it enough that it'll fail in 2 years is more than likely aware of that fact, and quite happy with it, given that they're likely early adopters of technology anyway, and expect to upgrade within that time frame.

Today, that is very true of me. But the first time I got nipped in the butt by that, I lost my laptop. :\ Still dead, still completely ruined HDD. ^_^; Hooray, torrenting.

Also, thanks for clarifying what I was saying (since I'm so rambly ) -- while keeping quality the same, the Chinese offer to do it for less payment. We could increase the quality of any given good in America and say, "That's reason enough to bring it over here," but the Chinese could easily witness consumer demand for high-quality products and rise to the challenge. The only way for a market to exist in America and not China is if the Americans can (by some means) produce something of a higher quality for a price so low the Chinese cannot compete, i.e. if the Americans have access to a technology the Chinese do not. This is true for many specialized technologies in medicine and physics (e.g. you don't see many MRIs being purchased from the Middle Kingdom), but when it comes to shoes, radios, and alarm clocks, you're S.O.L.

 

[The Big Al]

I'm not talking about the quality. I'm talking about the affects on our economy. While the cost might not show up dollars or the product itself.

It might show up with Joe Shmoe factory worker going after your store clerk job because he has a wife and kids to feed.

It might show up with local economies going in the toilet because the manufacturing base evaporating throwing people onto unemployment and welfare.

Lower prices =/= lower cost. Cost represents everything lost in gaining something. If anything, the cost of making it in China is more. It's just that we don't see it on the price tag and we can ignore it.

 

[Talon87]

I'm not talking about the quality. I'm talking about the affects on our economy. While the cost might not show up dollars or the product itself.

A valid and interesting point!

It might show up with Joe Shmoe factory worker going after your store clerk job because he has a wife and kids to feed.

Joe Shmoe cannot get "my" store clerk job even if he wanted to. Normally, a sane man with a wife and kids to feed, clothe, and house does not choose the lower-paying, more mundane, more dangerous of two jobs. And that is certainly true of blue collar factory work vs. white collar clerical work. :| The reason Joe Shmoe is a factory worker today is because he can't cut it as a clerk. It's that simple. If he could cut it as a clerk, then he would be a clerk.

In the real world, when Joe Shmoe's job goes to China, he doesn't steal mine. He becomes unemployed and applies for Welfare. That is the typical situation in the United States. 10 times out of 10, blue collar workers who lose their jobs to overseas markets either get new blue collar jobs or declare unemployment and apply for Welfare.

So while your first example is interesting, I don't think it's realistic.

Lower prices =/= lower cost. Cost represents everything lost in gaining something. If anything, the cost of making it in China is more. It's just that we don't see it on the price tag and we can ignore it.

I agree that companies are free to undercut their prices (e.g. the PS3 costs more than $599 per unit to construct), but I think you're wrong to suggest that China as a whole is employing this strategy to get their foot in the door. China has been making goods cheaply for foreign markets since before I was born. Growing up in the 1980s, I used to point out to my mom how "everything is made in China or Hong Kong! " Growing up in the 1990s, my sister pointed out that everything was made in China. And now, in 2006 and 2007, China has once again become a hot topic for a new generation and everybody, young and old alike, is noticing how many things say "Made in China." But ... it's not a 20-year-old experiment in price cutting. ^_^; Nor is it a recent trend which American xenophobia can combat. I believe it is a century-old practice in regular ol' economics. They make things cheaper than we do because their workers' wages are much less. That's all there is to it.

There are also serious repercussions to cutting China off. Repercussions I am sure you've considered but which I may as well list. Things like losing trade with them for rare exports that only China can offer. Losing political friendship with them where it matters (Korea, Japan). Setting a bad example to our other trade partners -- Russia, Britain, France, etc. -- that "we're happy to trade with you but only so long as you're not stealing our jobs. If you do that, we're cutting you off!" Foreign countries have no incentive to participate with such a selfish nation, and they would happily cut us off and mutually exclude us from their wares. In short, your plan could have the disastrous consequence of making America "an isolated country with no friends, economic or political." In such a world, nobody would raise a finger if an alliance of nations decided to try to invade or destroy us.

 

[The Big Al]

Brother.

I'm just saying Americans can make the things the Chinese can albeit more expensive. I'm not saying embargoing China. Such a feat would be impossible and right now unjustified.

Though, we could reinstate the tariff system we used for more than two hundred years. It made it so whether it was made in America or overseas you didn't see the difference in price so there was no incentive to outsource to cut costs. I doubt China would object. So your concerns would be moot.

I think it's not so much we trade with China as to how we trade with China. It's clearly a one sided policy with China reaping most of the benefits. Why do you think America's trade deficet is so outrageous? Should we cut trade? No. Should rework our policy? Hell yes.

 

[the gadfly]

Sorry to muck things up.

The factory workers in America are competing against the factory workers in China for jobs, and the costroductivity ratio of Chinese workers is significantly better than what it would be if those jobs were in America.

In high-tech fields, the U.S. is still dominant. China imports our airplanes, super-computers, biotech products, etc. Where we've taken hits are in the low-tech commodities like clothing, electrical appliances, home electronics and increasingly food items.

However, in light of the recent problems with Chinese products in the U.S. and elsewhere concerning pet foods, toothpaste made with anti-freeze, toy trains with lead-based paint, defective tires, and farm-raised fish contaminated with banned antibiotics, there's a good chance Chinese products will be increasing in cost, getting nearer to international costs.

Even if you talk about increased wages, you are still only looking at a single economic sector - factories. White collars, farmers, shop clerks, and virtually anyone whose job was never under threat to go to China in the first place won't benefit nearly as much, if at all.

Ah, but white collar jobs are being outsourced too. Hell, even medical diagnoses are being outsourced. Farmers? It seems to me more and more products are imported. Part of the reason is due to seasonality, but mostly it's because of cost. I don't remember when I last bought seafood that wasn't caught or raised by an Asian or South American country.

Honestly, the only jobs safe from outsourcing are service jobs that require hands-on work.

We don't HAVE to import this stuff from China.

No, we don't have to.

That's the problem. People don't think about the long term anymore. They don't think about the costs beyond the price tag.

I'm glad to hear you don't have to worry about how much you're paying for whatever you're buying. Most of us don't have that option. We have to make ends meet with whatever we get in our paycheck while allowing room for taxes.

 

[The Big Al]

I wish I didn't have to worry about prices. I'm still buying Chinese products. I just don't like it and wish I could buy American. But that has to do with the value of a dollar and the cost of living which is another debate.

 

[Talon87]

I wish I didn't have to worry about prices. I'm still buying Chinese products. I just don't like it and wish I could buy American. But that has to do with the value of a dollar and the cost of living which is another debate.

Only you can explain to us what your frustration is, precisely. So rather than put words in your mouth (which I fear I've done once or twice already), I'd like to ask you to clarify ... what exactly is it that you want to buy which cannot be purchased "Made in USA" or at the very least made in any non-Chinese country?

America has enough (a) xenophobes and (b) "Patriots" that, for years, there has been a market for "Made in America" goods. It's how Ford and General Motors made their names. "Ford, an American Revolution" and all that corporate bullshit. "Don't buy Toyota or Honda unless you're anti-American." It reminds me a lot of LittleKuriboh's parody of Bandit Keith. ^_- So ... I'm having a hard time understanding what day-to-day goods you can't find Made in USA. The only ones which come to mind are ...

- electronics, but you won't be able to change that. Japan gets to decide where they want their electronics made, not America. And most electronics made in China are technically the products of Japanese corporations, e.g. Sony or Toshiba. As I am not a PC nut, I have no clue where AMD, Intel, SeaGate, Western Digital, ATI, NVidea, etc. etc. produce their goods. If I had to guess, though, it'd be China.

- gasoline, petrol. But that's OPEC, not China.

That's it, actually. ^_^; Books, printed in America. Produce, grown in America. Fish, you can find American fish. (Not every aquatic species, but enough to satisfy your inner fisherman.) Beef, lamb, chicken, USA, USA, USA. Textiles, made in America (or get homespun!). Cars. Glasses. Pocketknife. Trampoline. Playing cards. Sports equipment. I mean ... so many things which come to mind can be found being made in American factories or grown on American farms. Right?

I mean ... I must be wrong, otherwise you wouldn't be so frustrated. ^_^; So like I said ... I guess I'll have to wait for you to explain what precisely is frustrating you.

 

[The Big Al]

It's mostly the electronics. Both my laptop and datastick were made in China.

And you haven't watched a manufacturing sector evaporate like I have. You haven't seen what it does to not only the factory workers but the service sector that depended on their business. All for what? So that it costs a dollar less to buy something?

Granted a lot of things are made in America but less and less is made here as time goes by. I also see less "made in America" on the shelves of stores most people visit.

 

[Sapphire Version]

China is the inventer of Pokemon