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That's creative destruction. Nothing wrog about that. If China's competitive advantage lies in manufacturing Aluminum more efficiently than the US, the market f
by gotchange 11y ago
That's creative destruction. Nothing wrog about that. If China's competitive advantage lies in manufacturing Aluminum more efficiently than the US, the market forces and even economic common sense dictate that they expand in this activity and for the US to abandon theirs and focus more on what they're really good at and what could prove as a competitive advantage for them.
- SixSigma 11y agoRicardian Comparative Advantage of Nations. Keeping agrarian societies in their place since 1817.
- krschultz 11y agoChina generally is not more efficient. Rather, China doesn't have the cost of externalities included in the price of the goods. The US doesn't ensure that all the cost is put back on the manufacturers, but our environmental and labor regulation ensures at least some of it is included in the price. I imagine if China had the same requirements on its power plants and manufacturing facilities as the US does then the advantage (if any) would not be very much.
- gotchange 11y agoI was referring implicitly to the fact that China is the single largest coal producer in the world. Setting aside the environmental considerations for a moment here, this is definitely a competitive advantage in electricity generation given that aluminum production is an electric energy intensive activity.
- meric 11y agoThen U.S. is benefiting from China drawing down on its natural capital (much of the pollution from Coal excluding CO2 emissions is local to the continent). U.S. should mothball it's aluminium industry and buy China's.
- bzbarsky 11y agoChina makes it illegal for foreigners to own controlling interests in Chinese companies, so your last proposal won't work.