China gets bad rap for U.S. woes
By Mike Clendenin
EE Times
October 31, 2003 (2:58 p.m. ET)
I have been learning Chinese for five years, ever since coming to Taiwan. It's been a slog, and I'd say I can't debate the finer points of Ulysses, but I get by pretty well.
I never thought of studying the language, and many foreigners here still don't. But I realized that to remain competitive, I needed a reasonable level of competency.
One thing I didn't do was bellyache about how the Chinese are taking over everything. I felt there was opportunity in it. Unfortunately, there has been a lot of political bellyaching recently about the loss of jobs in the U.S. That's understandable. But what strikes me as disingenuous is blaming it on the Chinese.
At the moment, China seems to be the source of all of America's troubles. If only those Communist bureaucrats would let their currency float, like in a real market economy, then good ole American blue-collar workers, and some white-collar ones, too, would stand a better chance of competing.
Baloney. Even a 20 percent appreciation in China's yuan - far from what would probably happen — wouldn't make American workers competitive with the ridiculously low wages paid to China's unskilled laborers or the comparatively low wages paid to rank-and-file white-collar workers, such as engineers.
More important, remember that China, despite its growing military influence and consumer market potential, is still a house of cards. There are an estimated 200 million unemployed. Its banking system is sitting on one of Asia's highest bad loan ratios, while at the same time driving a consumer credit bubble. (It's possible for a person making $10,000 a year to gain credit approval for a $15,000 car.)
All this has Beijing's central planners unnerved. Their economy needs rapid growth to soak up the unemployed and to stem social unrest. But, on the other hand, unwise loans, inefficient investment and overcapacity helped trigger the Asian financial crisis of 1997.
A China financial crisis would serve nobody's interest, for such a slowdown would defer its grand potential as an end market.
So, here's a little campaign trail advice: It's not China, stupid. The U.S. will have to do a better job of looking within to find solutions to its problems. If it can't, then it has more to worry about than some Chinese teenager soldering circuit boards in a Dongguan sweatshop for $1 a day.
Taiwan bureau chief Mike Clendenin can be reached at mclenden@cmp.com.
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