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You present it as if the poor country that allows foreign companies to exploit its cheap labor is somehow the one taking advantage of the rich countries. Just a

You present it as if the poor country that allows foreign companies to exploit its cheap labor is somehow the one taking advantage of the rich countries. Just ask yourself: is that a likely way for the world to work? Do you think the rich countries just let themselves get walked over in that way by much weaker, poorer countries? Point-by-point: > We've had decades of letting China walk all over us. It's hard to square your view with the fact that American companies have made massive sums of money by exploiting cheap Chinese labor, or with the fact that when you walk around any Chinese city, you see American brands everywhere (Apple, Starbucks, KfC, GM, Tesla, all the fashion brands whose names I don't know). > They tariff our goods, we buy theirs up. China has massively reduced tariffs since the early 1990s. Average Chinese tariffs are now around 3.4%, which is similar to tariff rates the US imposed in the mid-1990s.[1] > They steal our IP, we respect theirs. Your view of IP enforcement in China is behind the times. Back when China was a largely peasant society shut off from the outside world, it had virtually no IP law. That has changed quite dramatically in the last decades. China is the world's most active venue for IP litigation now. Specialist IP courts have been set up in major cities over the past several years, and the statistics show that foreign companies are quite successful in enforcing their IP.[2] American companies also take in billions of dollars in revenue by licensing patents to Chinese companies. > They manipulate their currency, we let ours float. Many countries intervene in the foreign exchange markets. China does so too, and limits capital flows in and out of the country. I'm not enough of an expert to know whether or not this is a wise economic policy, but I suspect they have good reasons (e.g., financial stability) for doing so. However, there's no doubt that the RMB floats to a far greater extent than it used to. You can see this pretty easily if you look at a CNY/USD chart showing the past 20 years. The RMB moved very smoothly until about 2012, and since then has fluctuated much more like a normal currency. Of course, like most central banks, the PBOC will pull the breaks when it feels that it's important. 1. https://data.worldbank.org/indicator/TM.TAX.MRCH.WM.AR.ZS?locations=CN-US https://data.worldbank.org/indicator/TM.TAX.MRCH.WM.AR.ZS?lo... 2. https://www.ipwatchdog.com/2018/05/07/rapid-changes-chinese-legal-system-attractive-venue-ip-litigation https://www.ipwatchdog.com/2018/05/07/rapid-changes-chinese-...

ardy42 7y ago
> You present it as if the poor country that allows foreign companies to exploit its cheap labor is somehow the one taking advantage of the rich countries. Just ask yourself: is that a likely way for the world to work? Do you think the rich countries just let themselves get walked over in that way by much weaker, poorer countries? Your questions don't make a lot of sense, because the situation is much complicated than than a model with two monolithic actors ("poor country" and "rich country") can handle. For instance: "rich country" has powerful actors that work to benefit their own private interests against the national common good. At a national level, industrial capabilities are more valuable than currency and finished product, but for many private actors, the opposite is often true. National time horizons are longer (or should be longer, as in multiple lifetimes), but private time horizons are usually much shorter (fractions of a lifetime). > It's hard to square your view with the fact that American companies have made massive sums of money by exploiting cheap Chinese labor, or with the fact that when you walk around any Chinese city, you see American brands everywhere (Apple, Starbucks, KfC, GM, Tesla, all the fashion brands whose names I don't know). What the US has had with China is private interests trading industrial capabilities for short term increased profit. The US government hasn't kept those private interests in check (because they're powerful), and China has been happy to take advantage of the situation.
- DiogenesKynikos 7y ago
  You're talking about the United States vs. China, not China vs. individual American companies. Over the past several decades, China has undergone massive internal structural changes, many of them at the behest of the United States. China has made massive changes to its economic and legal systems in order to allow foreign companies wide-ranging access to Chinese markets. Those changes allowed unprecedented profits for American companies. But the way you're painting it, allowing American companies to exploit cheap Chinese labor, allowing them wide-ranging access to the Chinese market, where they sell enormous amounts of goods and dominate many market sectors, and constructing an IP enforcement system out of nothing constitute China taking advantage of American companies.
  - ardy42 7y ago

ardy42 7y ago

> You present it as if the poor country that allows foreign companies to exploit its cheap labor is somehow the one taking advantage of the rich countries. Just ask yourself: is that a likely way for the world to work? Do you think the rich countries just let themselves get walked over in that way by much weaker, poorer countries? Your questions don't make a lot of sense, because the situation is much complicated than than a model with two monolithic actors ("poor country" and "rich country") can handle. For instance: "rich country" has powerful actors that work to benefit their own private interests against the national common good. At a national level, industrial capabilities are more valuable than currency and finished product, but for many private actors, the opposite is often true. National time horizons are longer (or should be longer, as in multiple lifetimes), but private time horizons are usually much shorter (fractions of a lifetime). > It's hard to square your view with the fact that American companies have made massive sums of money by exploiting cheap Chinese labor, or with the fact that when you walk around any Chinese city, you see American brands everywhere (Apple, Starbucks, KfC, GM, Tesla, all the fashion brands whose names I don't know). What the US has had with China is private interests trading industrial capabilities for short term increased profit. The US government hasn't kept those private interests in check (because they're powerful), and China has been happy to take advantage of the situation.

DiogenesKynikos 7y ago
You're talking about the United States vs. China, not China vs. individual American companies. Over the past several decades, China has undergone massive internal structural changes, many of them at the behest of the United States. China has made massive changes to its economic and legal systems in order to allow foreign companies wide-ranging access to Chinese markets. Those changes allowed unprecedented profits for American companies. But the way you're painting it, allowing American companies to exploit cheap Chinese labor, allowing them wide-ranging access to the Chinese market, where they sell enormous amounts of goods and dominate many market sectors, and constructing an IP enforcement system out of nothing constitute China taking advantage of American companies.
- ardy42 7y ago