Michigan: China is too busy building factories and infrastructure to worry about such things as world peace keeping, nuclear weapons, or a world class military. We need China and they need us. I think that China may have the best economy in the world today. So yes, they are an economic threat. As far as a military threat, they can have anything they want, but they are content to set back and watch us spend our money.
Sydney: I think China is a strategic competitor. The main problem is that it is virtually impossible to compete with China. Our businesses are not on a level playing field with theirs and therefore basically have no hope of producing products at a competitive price. One major reason for this is because the Chinese Government has pegged the Yen to the U.S. Dollar. This means that the Yen is always lower than the dollar, which makes our exports to China more expensive, and their imports to the U.S cheaper.
Recently the Chinese have spent a lot of money on their military. However I don’t really think that they pose a direct threat. They probably want to flex their muscle and show to the world that they are a strong nation. At the same time they aren’t stupid, or mad, like the North Koreans. They know it’s in their best interests not to threaten America militarily because they would most probably lose any conflict.
Cartwright: I don’t have a problem with the Chinese. They’re actually some of the best capitalists around right now. I know that sounds funny, but it’s the reality. I’ve done business with companies in China. Let me tell you; they are producing higher quality goods in many cases and a much lower cost. We can’t compete with them when it comes to manufacturing. And, they’re making some major advances in technology. If we’re not careful, they may take the lead from us.
They need us as much as we need them. Their factories keep cranking out products that we buy. We need them to buy our debt to fund the deficit spending right now. If the politicians don’t like that, they need to eliminate the deficit and pay down the debt, so we don’t have to rely on the Chinese for funding our government. Then, if they want to get in a trade war, have at it. I think that would be an economically destructive move, but some politicians are hell-bent on that.
What is of concern is the Chinese acquisition of resources. They’ve pretty much locked up all the resources on the African continent over the last few years. They’re making major infrastructure investments there to access the natural resources. I think someone made mention of that or alluded to it.
Just last year, Costa Rica opened its new, 35,000 seat national stadium. It cost something like $100 million to build and it only took two years. And guess what. It was a ‘gift’ from the Chinese government. You might wonder why they would do this. And you may also wonder why China would spend about $1 billion to upgrade a Costa Rican oil refinery. They just announced this earlier this month. Oh, they’re building a nice cozy relationship with countries all throughout the world, some of them close to home, and it all boils down to natural resources. What do you want to bet that the Chinese gifts in Costa Rica are all about oil rights?
RMC: It seems like we have somewhat of an incestuous relationship with China. We need them to buy our debt; they need us to buy their goods and keep their factories and economy going. I don’t particularly see the Chinese as our enemy, and there’s no competition when it comes to manufacturing. The simple fact is that we here in the U.S. can’t compete with their low wage manufacturing facilities that are producing products in many cases that are every bit as good if not better than what we produce here. I’m thinking textiles, for example. Let me be clear that there are some exceptions. I’m certainly skeptical of anything that they manufacture that is consumable, particularly after the pet food issue a few years ago. Evidently, they don’t have the same quality standards that we have on consumables.
I think that they are an economic threat more than a military threat. Historically, they’ve not been an aggressor nation unlike some other countries. I think they’re all about the money and that their economic might is probably only going to grow in the future. Are they already the world’s economic superpower? Probably. Are we an economic competitor? Absolutely. I think we still have somewhat of an advantage when it comes to intellectual property and technology, but if we’re not careful, we’ll lose that edge.
Where do we go from here? I think we give up on trying to compete when it comes to manufacturing. Unless we’re willing to abolish the minimum wage or subsidize manufacturing in this country, we can’t compete with millions of low wage workers in China. The only other option is to get into a trade war and impose tariffs on products coming in from China. In some cases we would have to have tariffs of like 1,000% or more to level the playing field. And in the end, the consumers get hurt when you do that. They certainly won’t be happy when they can’t get their cheap prices at Wal-Mart or other discount retailers. That’s just a fact. And, if that happens, some other low wage country will step up and start producing. There’s plenty of people in Africa that would work for a dollar per day.
No, what we need to do is to continue to develop technology that the rest of the world needs and innovate. That requires a well educated populace and producing some of the best minds coming out of our education system. We need to focus on sciences and math and engineering as it all relates to technology. If we can keep that edge, the rest of the world will be playing catch up. But the Chinese are a smart group of people. They’ve got some brilliant minds there, and they will catch up if we’re not aggressive in our innovation and development of new and better technologies.