Made in China

by Ryan on August 24, 2007

in Anything Else,Politics

China has an image problem.  Its products litter dollar stores, Walmart, and countless electronics and toy stores all over the United States.  China has been in their own version of the Gilded Age for about twenty years.  Ten percent economic growth per year is considered necessary to keep the newly created middle class happy enough not to stir in the streets.  Working conditions, pay, quality control, and man-made environmental disasters are all major issues in China, as they started to be in America about 120 year ago.

Whether we’ve realized this or not, America and China have been in a minor trade war over the past few years, which has accelerated recently.  Do you really think that this was the only time Chinese companies used lead paint on its toys, or used very small parts, or nasty chemicals in dog food or toothpaste?  Of course not!  America wants China to free its currency, the yuan, from the US dollar and let the market control the worth of the yuan rather than keep the artificial parallel to our dollar.  In essence, China’s money is artificially more valuable the way things are now which makes buying US Treasury bonds more lucrative for the Chinese.  They’re cheating. 

In response, China threatened to call in its bonds, thereby threatening to sink the US economy and engaged in another military drill with Russia.  Suddenly, Chinese products have flaws in them and recalls were necessary.  China finally blinked and is taking a four-month look into its manufacturer’s practices– they don’t want the name “China” on products to mean “cheap” or “unsafe.”  It’s a little late for that, but this does confirm a thought I’ve had for a while– China needs America more than America needs China, and China just admitted it in this lastest round of the trade war.  We’re not done with China yet since their still cheating on their currency, but a victory is a victory.

AP photo.

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