US does not fear stronger China - Paulso

[shan]

Xinhua/Agencies/chinadaily.com.cn)
The United States does not fear an economically stronger China, US Treasury Secretary Henry M. Paulson said Thursday.

"We do not fear an economically stronger and more competitive China, which benefits the Chinese people, the American people, and the prosperity of the global economy." Paulson said when addressing the Fourth Annual China Institute Executive Summit.

"The US-China economic relationship is among my highest priorities," he said, adding that it is also among the most challenging.

"The United States and China have a unique role to play in the coming decades in assuring a strong global economy and shaping the global economic agenda," he noted.

China 'great challenge' - Giuliani

Also on Thursday, US 2008 Republican front-runner Rudolph Giuliani said that emerging China was a "great challenge" to the country, and backed continued engagement with Beijing.

The former New York mayor also called for an increase in US military strength to "deter China from mounting a security challenge to America."

"China is a great challenge to the United States, and maybe one of the most important challenges," Giuliani told an audience of mainly students at Iowa State University.

"We will be the two great economies in the world. The more we make sure China's rise is peaceful, the better it is going to help the United States," Giuliani said in response to a question from a Chinese student. "We should remain substantially engaged with China."

Giuliani's comments marked one of his first significant discussions of China policy during his campaign, and signaled he would continue the engagement strategy favored by recent US administrations if elected president.

"To make sure that China doesn't think of challenging us militarily, we should increase the size of our military," Giuliani said.

US Democratic front-runner Hillary Clinton wrote in the latest edition of Foreign Affairs journal that the Sino-US relationship would be "the most important bilateral relationship in the world in this century" and called for "co-operatitve" ties with Beijing.

Senator Barack Obama, second to Clinton in national polls branded China as a "competitor" but not necessarily an enemy.

Another leading Democratic candidate, John Edwards, has warned that with the US preoccupation with other global hotspots like Iraq, Iran and Democratic Republic of Korea, China has not had enough attention from US policymakers in recent years.

Republican candidates have been generally less concerned about China's economic tactics, than its military buildup. In the latest edition of Foreign Affairs journal, US Senator John McCain wrote that China could bolster its good will that it is peacefully rising by being more transparent about its military buildup.

[The Smoking Man]

Bullshit.

The are quaking in their boots.

The top level people might not fear because they own MNCs or Transmationals but the poor are scared shitless.

[82riceballs]

Paulson's just trying to make America look like "the home of the brave".

If the US weren't scared of China's growing might, China would not have been urged to depreciate RMB.

I don't get something, though. Why would "the poor be scared shitless"?

[The Smoking Man]

Paulson's just trying to make America look like "the home of the brave".

If the US weren't scared of China's growing might, China would not have been urged to depreciate RMB.

I don't get something, though. Why would "the poor be scared shitless"?

I heard a report that said families that were contributing to food banks a year ago are now having to use them themselves now. The types of food being donated have changed too from more 'upmarket goods' to the 'care package' variety of goods.

They know the myth of FEMA is just that ... a myth. They saw that ANY disaster such as Katrina can be the undoing of America.

They are simply coming to the understanding that the 'big lie' that America could handle any 'problem' and provide aid is in doubt.

States like california have also been experiencing near bankruptsy conditions in the last few years to the point of not being aboe to pay their power bills.

Whole towns and cities are dying as a rsult of the loss of industry ... Look at Detroit.

[82riceballs]

However, wouldn't the poverty of Americans start a chain reaction in the global market? What I mean to say is that the economic stability of China depends on the wastefulness of Americans, who only spend and not save. Also, many Chinese companies are facing overproduction because of both the absence of a domestic product market and the newfound penurious lifestyle Americans have had to learn about the hard way.

Plus, most of the people who shop at the dollar store are lower-income Americans. Should so many suddenly go broke, China would be smart to expect some potholes in its road to economic glory and prepare some safety nets.

[The Smoking Man]

However, wouldn't the poverty of Americans start a chain reaction in the global market? What I mean to say is that the economic stability of China depends on the wastefulness of Americans, who only spend and not save. Also, many Chinese companies are facing overproduction because of both the absence of a domestic product market and the newfound penurious lifestyle Americans have had to learn about the hard way.

This is a result of globalization that was never truly explained to the American people. When things equalize globally, it would be nice if all the poorer countries would go UP to the level of the US economy however what happens is actually that they meet half way. The Richer economies must experience a sort of crash that also lowers them.

Oh, and a local market of 1.3 billion people trumps a market of 370 million especially since most of those people in the US market already have washers and driers, TVs etc.

The local market in China is now supplying goods to people who have never had luxury goods before.

Plus, most of the people who shop at the dollar store are lower-income Americans. Should so many suddenly go broke, China would be smart to expect some potholes in its road to economic glory and prepare some safety nets.

Actually, it improves the customers at the dollar store, where most Chinese goods are sold.

People can no longer afford the 'upmarket' goods and are forced to purchase lower priced goods ... similar to what is in every day use in China.

Soon, maybe you can't afford to buy a Japanese made TV set like a Hitachi so, what happens??? Your next TV may have a Chinese name on it. I know Hisense is now making inroads in the American Market with their lower priced kitchen and bathroom appliances. (It's a pity that the USA and Canada are on 110 Voltage. It would be even chaper all around if your market conformed to the 240 Volt world standard.)

[Polly]

However, wouldn't the poverty of Americans start a chain reaction in the global market? What I mean to say is that the economic stability of China depends on the wastefulness of Americans, who only spend and not save. Also, many Chinese companies are facing overproduction because of both the absence of a domestic product market and the newfound penurious lifestyle Americans have had to learn about the hard way.

Plus, most of the people who shop at the dollar store are lower-income Americans. Should so many suddenly go broke, China would be smart to expect some potholes in its road to economic glory and prepare some safety nets.

HK sank into an economic trough and property slump between 1997 to 2003 as a result of an over-heated economy, massive speculation and bad policy.  And as someone who lived through those horrid days, I can tell you it doesn't really work like that.

Assuming China's cheap goods producting industries do nothing to progress to the next level and are unable to steal some more of America's higher end business, in a recession when the very poor run out of money to even buy cheap goods, those on a higher strata above will also feel the pinch and face the same insecurity in employment and wage-cuts even.  As a result all the people will feel the pressure to cut down on expense and to save.  If they must buy anything, price will be a huge consideration and they will invariably go for the cheapest possible.

This was true in HK during the recession when the only shops that could withstand the economic winter are those that sold cheap goods and food stuff from China.  The only shops that did brisk business are those selling wonton noodle at USD 1.2/bowl and those selling USD 10 tops and USD 4 watches (perfectly fashionable and workable) and they thrived. 

So the cheap goods producers will probably not suffer a huge blow as far as their export to the US is concerned. 

Their biggest current concern (and indirectly the concern of the American consumers) though is that they face huge hike in wages* and raw materials, and are under pressure themselves to spike prices.

*Because of the rising price of crops and pork etc and general economic improvement in poor, central part of China, peasant workers have greater incentives to stay in their home town.  Since a couple of years ago, southern China has experienced shortage of peasant workers and wages have risen from RMB800 to RMB1200 generally (boarding and food provided by the employers).

[Polly]

An indicaton of the way to come is that Sarah Jessica Parker has launched her own line Bitten marketing outfits of no more than USD 40 each.  She clearly anticipated the general trends in the retail business and this is a very smart move.

[82riceballs]

Thanks for clarifying!
I learn so much on this forum