Tuesday, January 11, 2005

The Myth of the China Market

So a couple of articles recently have put some doubt as to whether or not our relationship with China is really that beneficial.

Here's a study by a partisan group about the job losses potentially cause by our trade with China.

On Sunday, the New York Times Magazine has done an article about how China has no respect for intellectual property and that trade my be severely damaging companies that deal with it. Think about our strongest companies, high tech and biotech. These have the most to lose in this situation.

Since the early 1900s, people have been salivating about China's large population and all those consumers. Yet, it is hard to see much in the way of payoff for being involved with them. I am a believer in free trade and think it almost always is mutually beneficial. The exception is when one of the countries, China, cheats the other countries out of its innovation and artificially pumps up its currency.

The only benefit we seem to get from our relationship with China is that they are so dependent on us economically they haven't been as bellicose as they could be considering the strength of their military. Cheap goods may be nice, but there are plenty of cheap areas of production outside of China to pick up the slack if we weren't trading with them.

It also seems somewhat hypocritical that we have this strong economic relationship with a corrupt, deceitful, oppresive regime in China but refuse to deal with a perhaps less oppressive regime in Cuba. I think we all know the reasons for this, but we shouldn't forget the inconsistency just because we can see the political expediency in acting this way.

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