someone posted this article recently and I found it very interesting.
fpeng.peopledaily.com.cn
should we be separating true imports, such as French wine or Lexus, from essentially American products with labor elsewhere, such as China, Sri Lanka, Indonesian etc etc.
For example, I know China is a huge toy manufacturer but the majority are OEMs. How are all the Barbie's counted? Are they "imports" from China? How about the Nike's? I assume Nike pays Michael Jordan more than a factory of workers combined. Are those shoes counted as imports from China?
Now let us assume some of these great economists are correct and the RMB is, say, 30% undervalued. OK, let us magically float the RMB. The cost of a pair of Nike's just went up, same for the Barbie, would that help our economy?
On the other side of the trade, Boeing just went up 30% in cost. Hello Airbus?
While China had come a long way, I would hardly qualify them as a competitive threat, not for now. I do not know if floating the RMB is the answer but I at least gave it some thought. I doubted if those senator who were asking those questions have a clue. and we know Greenspan has been clueless for years. |
