HaavBline

Trade Deficit with China Continues to Expand: Why?

Peter Navarro is "America's top business economist"?

This is not funny.


On Aug 13 12:23 PM Howard Richman wrote:

> By the way, America's top business economist, Peter Navarro, is saying
> about the same things as me about our trade with China. Check out
> his interview in the Huffington Post about his new book:
>
> www.huffingtonpost.com...

Trade Deficit with China Continues to Expand: Why?

Simplistic thinking.

Use your arithmatic skills! If Mexico get a chance to double the product they can manufacture there and double their exports to US, they wouldn't need to by 75 cents from us because they would have all the over-capacity problems from China and would not need our exports.


On Aug 13 12:03 PM Howard Richman wrote:

> HaveBline predicts that if we balanced trade with China:
>
> "Trade deficit against Mexico multiplies, factories booms south of
> the border. Author takes a chance to wade across the river and apply
> for jobs there."
>
> There is a huge difference. Mexico imports 75 cents from us for every
> dollar we buy from them. China imports 25 cents from us for every
> dollar we buy from them. Mexico does not practice mercantilism (the
> strategy of maximizing exports while minimizing imports). China does.
>

Trade Deficit with China Continues to Expand: Why?

Let's look at this dream scenario:

1. China ups its Yuan by 50% against the Dollar, as the author always wished. In effect forgiving some $500B of American sovereign debt, giving history's biggest deadbeat a second chance.

2. Export factories in China close shop and move them to Mexico. Trade deficit against China plummet. Author rejoice.

3. Trade deficit against Mexico multiplies, factories booms south of the border. Author takes a chance to wade across the river and apply for jobs there.

4. He gets rejected for inadquate language skills and preparedness for harsh work enviroment.

Fixing China Trade Is Key to a Sustainable Recovery

Morici is a one-dimensional single-issue 'economist'. He sees everthing only in terms of trade. Every problem will go away if we balance trade with ONE country. Magic.

This is the same old tune he has been playing for more than a decade. You need only to read one word and already know the whole article, not a single new thinking.

He never saw overleveraging as a problem, he never saw financial engineering as a problem. He has been barking up the wrong tree all this years. This is good enough that although he gets his share of air time for his simplistic jingoistic views, he has not been taken seriously.

The Market Needs Strong Economic Data; China's Got Some

The global markets may indeed be ahead of itself and at least need some rest.

Almost ALL of world's growth this and next year will have to come from emerging markets. This means they will continue to outperform the developed markets, as will commodity-based economies such as Australia and Canada.

China will not LIFT the world to a global recovery, but it will LEAD others in a recovery.

Multiple Warning Shots from China

People have been busy talking up G-2, RMB challenging USD as THE reserve currency, and the like, as if EU has already dropped off the earth.

Clearly the Chinese hasn't forgotten Europe.

A Tale of Two Economies: U.S. vs. China

I should elaborate on my 'minor complaints', though they don't change the thesis of this article:

1. China definitely suffer much more than a 'hiccup' as the author said. However, they have massive reserves and viable productive options to make fast economic transformations.

2. Total dollar debt growth from 1957 to 2008 exagerates the true picture, which is still very bad. For a fair comparison of debt load growth, it would be more convincing to adjust the total debt by population growth, inflation, and GDP growth. i.e. per-capita debt load burden as a percentage of GDP. I believe this will still show a much worsen picture, though not as dramatic.

A Tale of Two Economies: U.S. vs. China

The in-your-face writing is pretty annoying. But unfortunately mostly true. It is hard to find faults in this article except a few very minor details.

Stocks and Sectors That Could Catch Swine Flu Symptoms

Like SARS, worst case this will be resolved in a matter of months. So if any sector responds sharply to this flu, it would be a good opportunity to take the opposite position.

The U.S Is Not Japan

There is no question that the US is not Japan. The real question is weather US will fare better than Japan in its 'lost decade' or worse. The two countries are vastly different in culture, political system, and financial strength.

As an American, I sure hope that US will be able to do much better. But one must not lost sight of some key US disadvantages comparing to Japan.

1. Japanese citizens always kept a high savings rate, not so US. They are much better prepared for a rainy day.
2. Japan maintained a large trade surplus throughout the lost decade. And its industrial strength was never in doubt.

But the US enjoy the unique (so far) ability to print unlimited amount of dollars without serious consequence. I prayed that we continue to enjoy this previlege for a long time.

China Slowdown: A Drag on Global Growth

Considering US, EU, Japan and a bunch of other countries already are in recession NOW, I think the following title would be closer to the truth:

"Global Slowdown: A Drag on China Growth"