Jay,
<Continuing in this way, US will lose more factories, along with Japan, but both plus China will have an improved lifestyle of less expensive DVD machines and Lexus SUVs, until not, I guess. Win win and win, or not.>
Yes, as long as the US and other Western nations, with their embedded costs of ergonomics (this word exists in China?), unemployment insurance, worker's rights, continue to use their wealth to buy products from workers who have no ergonomics and related costs, there will continue to be a permanent shift. Ergonomics and the like act as a tax and therefore China's input of labor, because it is 'free' of this tax, shall always be more competitive.
Therefore, as the shift becomes more unbearable, protectionism will increase. This is what is meant by 'American values'. Perhaps this is the only solution.
<pushing Japan to intervene>
Well even Japan has been beaten at its own game, for what they did to America China is now doing to them. Eventually Chinese domestic demand will be strong enough to be self-sustaining, but they will need raw materials. How America, with its ergonomics taxes and the like, ever expects to compete for the world's resources against China, is beyond me. China will have more margin on the same product, and can pay more for materials.
Can Japan print more Yen? The last round was a failure.
D |
