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Americans Remain Divided on China Trade Issue

Americans Remain Divided on China Trade Issuei
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Elizabeth Lee
August 31, 2012 11:32 AM
In this election year, both U.S. presidential candidates are making China, and trade, an issue. With the unemployment rate above 8 percent, some Americans blame China for the loss of factory jobs. But other Americans say trade with China benefits the U.S. Elizabeth Lee reports from Southern California, where 40 percent of the imports from China arrive.

Americans Remain Divided on China Trade Issue

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Elizabeth Lee
— In this election year, both U.S. presidential candidates are making China, and trade, an issue. With the unemployment rate above 8 percent, some Americans blame China for the loss of factory jobs. But other Americans say trade with China benefits the U.S.

For more than 30 years, David Bibona and his brother have been building their parts production business. He says in recent years it hasn't been easy.

"We might have been able to grow our company maybe three or five fold," he says.

"Might have been" if he wasn't competing with China, where production is cheaper.

"It’s very difficult to assemble the partnerships it takes sometimes to produce thousands of parts near the price that China does," explains Bibona.

As President Barack Obama and his Republican rival, Mitt Romney, battle for the White House, trade with China has become a political issue. Obama says Romney shut factories as a businessman and shipped jobs to China.

Romney, on the other hand, counters that Obama has been soft on China, which he says uses unfair trade practices.

Business professor Peter Navarro, at the University of California-Irvine, wants to make China and trade laws an even bigger political issue. He says the U.S. cannot compete because of China's illegal production subsidies and accuses China of manipulating its currency.

"In 2001 we let China into our markets here in the United States and,since that time, we've shut down over 50,000 factories, lost 6 million manufacturing jobs," Novarro says, " we've got 25 million people in this country that can't find a decent job, and we now owe $3 trillion to the world's largest totalitarian nation."

Navarro is taking his message to the big screen by writing, directing and producing the documentary, Death by China.

The professor calls for trade reform with China, such as rules limiting trade with countries that do not follow international labor standards for wages and hours worked.

"Free trade by the rules, both countries can win. Free trade by China's rules, only China wins," he says.

Navarro also wants consumers to think about China's history of human rights abuses and the lack of quality control in Chinese products before buying them.

Some Americans, like Linda Paquette, boycott goods that are made in China.

"It’s about all of us as a people against anything that is repressive and unfair and dangerous and undemocratic," she says.

But not all Americans think doing business with China is a bad thing.

At the Port of Los Angeles, officials say jobs are being created, in large part as a result of increased trade with China. Electrician Jeremy Rosique says that is why he's been able to stay employed.

"Absolutely right. Here with what we're doing, yes it benefits us," Rosique says.

Port official Phillip Sanfield says there are 1.2 million port-related jobs in California.  Sixty percent of the imports come from China, while a third of the exports go there.

"So all of these jobs we currently have here at the port, a lot of that has to do with the trade we do with China," Sanfield explains.

International economist Ferdinando Guerra says while there is still an imbalance between imports and exports, there is a shift, with growth in American exports such as agricultural products and wine.

"Fifteen percent to 20 percent increases over the last few years [in exports]. That will continue to be the trend as China's middle class grows," he notes.

Guerra also says Americans benefit from all the products made in China.

"We've been able to control inflation as a result of cheap Chinese goods coming into the United States," he says.

Guerra acknowledges that Chinese imports hurt some Americans, but he says declaring a trade war is not the solution. Rather, he says the way to help the U.S. economy is to increase trade with China.

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Comments
     
by: The Protectionist
September 03, 2012 9:36 AM
Karl Marx said the fastest way to destroy capitalism is with free trade. Daniel Webster said the main reason we have our Constitution is to stop free trade. Lincoln and party were protectionists until 1960s. Oddly, China adopts Lincoln's logic and we adopt Marx's. An engineer has attempted to make sense of Lincoln's logic with a new theory of economics: rescuingeconomics.wordpress.com


by: john from: german
August 31, 2012 9:49 PM
you're willing to show that hurts US, while you refuse to show that benefits US, is that fair to China? So far as I know, China are eager to buy so many things from US, while the America refuse to sold them. If the US really want to help himself, just open to the world and clear the block set by yourself. You can learn from German and France on this point, see how they are doing.

In Response

by: james from: ca
September 03, 2012 6:45 PM
History suggests that exporting such equipment to China is not a long term winning proposal. You can't compare Germany with a solid industrial policy and relatively small consumer market to America which lacks any coherent industrial policy and has massive open consumer market others want to enter.

Export controls are probably the only thing keeping a number of industries from moving to China. Some of America's largest remaining technology industries are also its most protected. If companies are allowed to export these products to China you will soon find they are offered large subsidies and are coerced into moving production to China, as has happened to so many other high tech American industries. The end result is a larger trading deficit with China and loss of further industry in America. The only way to prevent this sort of abuse is the implementation of a strong industrial policy that makes it a legal nightmare to transfer factories and technical know-how to a predatory competitor.

In Response

by: Rick from: China
September 02, 2012 12:35 PM
I completely agree with these views. Both China and Germany have conducted effective cooperation based on mutual respect, equality and mutual benefits. Americans accuse China use unfair trade practices. But US restrictions on high-technology exports to China is complained by China also.


by: Rob Swift from: Great Britain
August 31, 2012 4:46 PM
China appears to work on a 40 year cycle. Dating this from chairman Mao, it has some 15 years to run. Chinese workers have no concept of time. They are not as productive or skilled as western economy workers. It's just there are more of them. Western economies are strangled by vested interest and bureaucracy, but soon as china catches up it will be relegated behind western economies once again.China remains the sick man of the east and it's government has no idea of how to behave decently in the world.


by: Peter Navarro from: Irvine CA
August 31, 2012 11:19 AM
The LA Port Jobs issue is literally a red herring. If we had more balanced trade with China, we would be exporting a lot more goods out of the LA port instead of sending empty containers back.

In Response

by: Anonymous
September 01, 2012 12:47 AM
Since we're talking about red herrings, human rights and international trade, eh?

In Response

by: Jake from: Canada
August 31, 2012 6:54 PM
Maybe the US should take a lesson from the Germans!

Export more high value products, the ones the Chinese want to buy.

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