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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (2300)	12/30/2003 11:54:52 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Fewer trade barriers free up China Economists argue its impact on West Restrictions don't work, says one JAMES DALZIEL CANADIAN PRESS China's emergence as an economic powerhouse is linked closely to the progressive removal of trade barriers and "creative destruction" of jobs in some Western industries, says Sherry Cooper, global economic strategist at BMO Financial Group. "There is always this creative destruction and the loss of jobs to locales that can do the work less expensively and maybe more productively," Cooper said in an interview. "Nothing is going to change that," she said. "You can't legislate against it and, if you did, you would end up seeing a collapse in the global economy." In the United States, presidential election-year rumblings include complaints that U.S. retailers are being swamped by Chinese products that used to be made in America by Americans. Classic toys like Etch A Sketch, for example, now are made in China by workers paid less than 50 cents an hour. Canadians are also seeing a flood of products — and retail bargains — as China opens its doors to Western businesses and, in return, wins greater access to Western markets. The latest figures show Canadian imports from China have more than doubled over a five-year span — to $16 billion in 2002 from $7.7 billion in 1998. At the same time, Canadian exports to China grew to $4.13 billion from $2.5 billion. Putting those numbers into perspective, Canadian exports to the United States, Canada's biggest trading partner by far, rose to $345.4 billion from $270 billion in that five-year period, while Canadian imports from the U.S. rose to $218.3 billion from $203.6 billion. Cooper isn't surprised by Western businesses' growing affection for Communist China, which recently announced plans to protect private property rights for the first time since the 1949 revolution. The Chinese "are not really Communist any more," she said. "Very rapidly, they're dismantling their state-owned enterprises." Increased Chinese trade "turns out to be a very good thing for consumers," she said. "Look how prices are plummeting in so many different sectors as a direct result of it." At a November meeting in Bangkok, Chinese leader Hu Jintao was asked about the possibility of a Western backlash against Chinese trade. Tom d'Aquino, CEO of the Canadian Council of Chief Executives, was the questioner, asking about the perception that China is overwhelming the world with cheap imports or failing to play by the rules of the World Trade Organization. Hu "pointed out that China may soon buy from the world more than it sells, and have a trade deficit," d'Aquino said. "Secondly, he said significant growth in China's exports is from multinationals operating from platforms in China. You can't have it both ways." A contrary view of trade's impact is taken by Jim Stanford, an economist at the Canadian Auto Workers union, writing recently about the 10th anniversary of the North American Free Trade Agreement — on Jan. 1 — along with the 15th anniversary of its precursor, the Canada-U.S. Free Trade Agreement. "While they're toasting NAFTA's mighty achievements, all three countries (Canada, the U.S. and Mexico) are being hammered by the world's new trade powerhouse," Stanford said. "Even Mexico is losing tens of thousands of jobs to the unbeatable cost and forced discipline of Chinese plants. "NAFTA is obviously not to blame for China's rise, but it has done nothing to help North America meet China's challenge." In response, d'Aquino says: "Instead of whining about Chinese exports overtaking our industries, why doesn't Mr. Stanford consider that there are 1.4 billion Chinese and, as their president pointed out, next year that 1.4 billion may buy more than they sell?" He added: "Instead of going into a bunker, curling up into the fetal position and sucking our thumb, we should be looking for opportunities in China." Economist Cooper said protectionist efforts don't work, though politicians may advocate them in the textile or steel industries to win votes, and history shows that trade barriers were a contributing factor in the Great Depression in the 1930s. "If the U.S. were to truly create the kinds of restrictions in trade that would protect jobs in those industries that are impacted, it would be lead to a dramatic decline in the Chinese economy and a huge downturn in the world economy, which would only cause a recession in the United States," she said. "More jobs would be lost, ultimately." thestar.com