How China Will Save You

Discussion in 'China' started by huaxia rox, Jun 18, 2013.

  1. huaxia rox

    huaxia rox Senior Member Senior Member

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    How China Will Save You - Forbes

    Within the last 20 years, China has grown more than any economy in the world. In the U.S. that growth meant the dismantling of many manufacturing jobs, and a higher trade deficit. That is changing. In the next 10 years, China will likely be buying more from the U.S. than Mexico, which is currently our No. 2 trading partner after Canada.

    Chinese demand will help lower the trade deficit in the United States, though not erase it.

    Chinese demand will create new jobs.

    “There’s a lot of demand coming from China and companies are looking east,” says Wes Aubihl, assistant deputy chief of export assistance at the Ohio Development Services Agency in Columbus. “It doesn’t matter if you’re a big company or a small company. Ohio firms want to go after those 1.4 billion people.”

    And they are. Last year, Ohio exported a record breaking $3.6 billion in goods to China compared to $3.3 billion in 2011 and $3.01 billion in 2010. A decade ago, those numbers were $800 million.

    “For every $180,000 in export sales, Ohio creates one new job,” Aubihl told me.

    New companies have sprouted up to serve China. Bomoda in New York is a website that caters to Chinese people looking for U.S. and European fashion trends. Christine Lu’s Affinity China is only a few years old. China’s new rich keep her running from Los Angeles to New York to Shanghai.

    China’s economy is around 32% consumer spending. It is more than half of the U.S. “If you could get them to spend more and save a little less, the U.S. would benefit,” says Michael Silverstein, senior partner of Boston Consulting Group in Chicago. “I think we are seeing those benefits occurring in places around the country right now. Chinese consumers don’t want a flip-top cell phone, they want a smart phone. Apple in Cupertino is very happy with that.”

    Between now and the next 10 years, the discretionary income of China’s urban middle class will go from a combined $1.18 trillion to a whopping $3 trillion, according to a study released last week by the China-United States Exchange Foundation.

    This rising consumer is going to lift many American boats, as Aubihl points out from Columbus. China’s growth is no longer a problem for the U.S. It is an opportunity. In the case of smartphones for example, the penetration has soared from zero in 2007 to 50% in 2012. There is also continued opportunities in urban infrastructure. Only 50% of the population live in cities compared to 75% in Brazil, and an 83% urbanized population in the United States.

    “We are still in the very early stages of this development,” says Joohee An, a portfolio manager at Mirae Asset in Hong Kong. “We’re not in the middle. We’re definitely not near the end,” she says.

    China is the No. 1 investor in infrastructure. Companies that have the expertise in building subways, waste-water treatment systems and construction machinery have an opportunity to help China set the course for its next wave in urbanization.

    China will strengthen the U.S. economy.

    Assuming no change in tariff rules and no strengthening of the Chinese currency, the U.S.-China trade deficit will be around $686 billion even as U.S. exports in goods in services rise from $124 billion to $612 billion. But there is a more likely scenario. The renminbi is appreciating annually by around 3%. In that case, the deficit will be $455 billion. As manufacturing moves out of China, the U.S. trade deficit will improve by an estimated $232 billion, the China-United States Exchange Foundation says.

    Of course, no relationship is perfect.

    China intellectual property theft is estimated to be around $48 billion. The Foundation estimated that a million jobs would have been created if not for piracy and intellectual property infringement by the Chinese alone.

    It’s not a rose garden. But the Chinese middle class is growing. They want American brands. They like American companies. In many cases, in growing numbers around the country, companies are hiring because business is booming in China.

    President Barack Obama will meet with China president Xi Jinping on June 7-8 in California to discuss bilateral trade. The economic relationship between these two countries will become more important not only for Washington, but increasingly to a developer in Silicon Valley, a soy farmer in Iowa, and an employee at a machine shop in Ohio.
     
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  3. Ray

    Ray The Chairman Defence Professionals Moderator

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    China is a new name for Jesus?

    I thought Jesus Saves!
     
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  4. W.G.Ewald

    W.G.Ewald Defence Professionals/ DFI member of 2 Defence Professionals

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    Starbucks and McDonald's are expanding in China is what I hear. :-(
     
  5. TrueSpirit

    TrueSpirit Senior Member Senior Member

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    Forget It....Trace my IP if you can
    Obama says he had 'blunt' talks with China's Xi Jinping on hacking

    Hardening his position against China especially with regard to cyber-hacking, US President Barack Obama today said Beijing has understood his "blunt" message that his administration would not tolerate this kind of behavior.

    "We had a very blunt conversation about cyber security," Obama, told the popular "Charlie Rose" show in an interview, referring to his recent meeting with his Chinese counterpart Xi Jinping in California early this month.

    "Every country in the world, large and small, engages in intelligence gathering. And that is an occasional source of tension, but it's generally practiced within bounds.

    There is a big difference between China wanting to figure out how can they find out what my talking points are when I'm meeting with the Japanese, which is standard fare, and we try to prevent them from penetrating that, and they try to get that information," he said.

    "There's a big difference between that and a hacker directly connected with the Chinese government or the Chinese military breaking into Apple's software systems to see if they can obtain the designs for the latest Apple product. That's theft. And we can't tolerate that. And so we've had very blunt conversations about this," Obama said.

    "They understand, I think, that this can adversely affect the fundamentals of the US-China relationship. We don't consider this a side note in our conversations. We think this is central in part because our economic relationship is going to be continued to be premised on the fact that the US is the world's innovator," he said.

    "We have the greatest R&D. We have the greatest entrepreneurial culture. Our value added is at the top of the value chain. And if countries like China are stealing that, that affects our long term prosperity in a serious way," said the US President.

    Obama said there is need to get this relationship right and China does need to be a stakeholder. "I think that they recognise that. But, look, they have achieved such rapid growth and they have grown so fast, almost on steroids. There's a part of them that still thinks of themselves as this poor country, that's got all these problems. The United States is the big cheese out there, trying to dictate things, perhaps trying to contain our rise," he said.

    "So I think what you're seeing inside of Chinese leadership is the desire to maybe continue not to be responsible, not to be a full stakeholder, work the international system on something like trade or intellectual property rights, get as much as they can and be free-riders and let the United States worry about the big hassles and the big problems," he said.

    "At the same time, a growing nationalist pride where they say yeah, we're big too and we should be seen as equals on the world stage. What we're saying to them is, you can't pick and choose. You know, you can't have all the rights of a major world power but none of the responsibilities. And if you accept both, then I think you will have a strong partner in the United States," Obama said.

    "So I'm optimistic about the future. But what I've found working with the Chinese government is candour, being clear about American values, pushing back when the Chinese are trying to take advantage of us," said the US President.

    Obama says he had 'blunt' talks with China's Xi Jinping on hacking - Indian Express
     
  6. t_co

    t_co Senior Member Senior Member

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    off-topic.
     

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