Telegraph article: America will rise again

[Farnan]

http://www.telegraph.co.uk/finance/c...o-America.html

Interesting article, what do you think?

[hellheaven1987]

If EU does not collapse at that time.

[Exarch]

nice article,
but a few objections:

"A surprising amount of work that rushed to China over the past decade could soon start to come back," said BCG's Harold Sirkin.

highly unlikely, companies like profit so even if they move their factories out of China, they might not make it back to the US; it's far more likely they'd move them to Vietnam, Bangladesh, India or any other country where labour costs are cheaper. The experience of Apple is the future where designs are formulated in the US and the rest is put together across Asia.

If Evans-Pritchard wanted to cite an advantage of the US outside of continental resources and geography, i'd cite a potentially large market for green energy, even in spite of climate change naysayers, which could generate jobs in the US-and has; take that Suntech factory that opened in Arizona last yr, for all those who get on the bandwagon of 'China stealing our Jerbs', that's one of many cases of Chinese companies opening factories in the US, generating jobs and investment.

[Hilarion]

America has plenty of problems but one of its virtues is that we all acknowledge them. Like they say in AA meetings, the first step towards recovery is realizing you have a problem.

[Imperial]

America has plenty of problems but one of its virtues is that we all acknowledge them. Like they say in AA meetings, the first step towards recovery is realizing you have a problem.

"Hi, my name is America and I have a spending problem."

[Hilarion]

"Hi, my name is America and I have a spending problem."

Greece, Italy, Spain, etc.: "Hi America..."

[Claudius Gothicus]

Greece, Italy, Spain, etc.: "Hi America..."

I'm sorry but Spain doesn't have a spending problem... the Mortgage crash brought down the Construction Industry and Spain's industry was construction oriented.

[Blau&Gruen]

I think it is an optimistic article written by a political economist, obviously. I think energy production will be one of the key questions of the next decades. Sustainability and environment will also be key questions. Energy prices will certainly be one factor that influcences where industrial goods are produced.

[Mr. Scott]

nice article,
but a few objections:

highly unlikely, companies like profit so even if they move their factories out of China, they might not make it back to the US; it's far more likely they'd move them to Vietnam, Bangladesh, India or any other country where labour costs are cheaper. The experience of Apple is the future where designs are formulated in the US and the rest is put together across Asia.

If Evans-Pritchard wanted to cite an advantage of the US outside of continental resources and geography, i'd cite a potentially large market for green energy, even in spite of climate change naysayers, which could generate jobs in the US-and has; take that Suntech factory that opened in Arizona last yr, for all those who get on the bandwagon of 'China stealing our Jerbs', that's one of many cases of Chinese companies opening factories in the US, generating jobs and investment.

Sure, maybe for cheap plastic goods that require low skill, but when it comes to things like chip and computer manufacturing, the US is on the rise. Intel alone is currently spending billions in adding and expanding its US factories.

But Americans shouldn't think this will improve the job market. US manufacturing is so mechanized that even a dramatic increase in manufacturing will only make a dent in the job market. So the claims that China is stealing JOBS is pretty baseless. Even in terms of profit, the US gets more out of US-China trade than China. The biggest problem with the trade deficit is that it is resulting in an accumulation of debt on the side of the Chinese. Which if that implodes will likely throw the fragile global recovery into a recession.

[Condottiere 40K]

Industries that can and have to react quickly to changing local conditions that they service were always going to be likely beneficiaries, once the true costs of off-shoring were brought home to the board and management. The chances that Apple will subcontract component manufacture to the States is unlikely, except possibly for the CPUs.

The Chinese want to move up the value chain, and start innovating on their own, and I like to think the Indians have similar ambitions, so the article seems rather shortsighted.

[Exarch]

Sure, maybe for cheap plastic goods that require low skill, but when it comes to things like chip and computer manufacturing, the US is on the rise. Intel alone is currently spending billions in adding and expanding its US factories.

But Americans shouldn't think this will improve the job market. US manufacturing is so mechanized that even a dramatic increase in manufacturing will only make a dent in the job market. So the claims that China is stealing JOBS is pretty baseless. Even in terms of profit, the US gets more out of US-China trade than China.

no objections here, American companies profit handsomely from their operations in China; in fact, for some companies such as GM, the only thing keeping them afloat since 09 was GM's China Division.

The biggest problem with the trade deficit is that it is resulting in an accumulation of debt on the side of the Chinese. Which if that implodes will likely throw the fragile global recovery into a recession.

Chinese local government debt isn't in the same situation as the situation with several State government debt vs Federal gov. debt in the US, for the fact that the Chinese don't need to borrow in order bail those governments out. Having all those trillions of $$ saved up tends to cushion against things like this; compare that to the case in California where despite rich companies and businesses and hollywood, the State government is so indebted they even have to cut school hours or make kids pay to ride on school buses in some districts.

Debt is a massive drain on economic growth, more so if you haven't got the actual money to pay it off.

EDIT: it just occurred to me, once the XL Keystone pipeline opens, the US will be as prolific a gas exporter as Russia is; perhaps even giving Europe options when it comes to bargaining with Russian gas companies.

[Mr. Scott]

no objections here, American companies profit handsomely from their operations in China; in fact, for some companies such as GM, the only thing keeping them afloat since 09 was GM's China Division.



Chinese local government debt isn't in the same situation as the situation with several State government debt vs Federal gov. debt in the US, for the fact that the Chinese don't need to borrow in order bail those governments out. Having all those trillions of $$ saved up tends to cushion against things like this; compare that to the case in California where despite rich companies and businesses and hollywood, the State government is so indebted they even have to cut school hours or make kids pay to ride on school buses in some districts.

Debt is a massive drain on economic growth, more so if you haven't got the actual money to pay it off.

EDIT: it just occurred to me, once the XL Keystone pipeline opens, the US will be as prolific a gas exporter as Russia is; perhaps even giving Europe options when it comes to bargaining with Russian gas companies.

Ah yes, the cut school hours . I don't mind them at all (to be honest it isn't even that noticeable).

I think the difference between American debt and Chinese debt is that the US has the ability to print the debt away, while China does not. Not to mention the tremendous level of US cash and capital (and with the EU debt crisis growing more precarious, more investors are flocking to the US). Its also a point of mentioning that if China were to use that money it may exacerbate inflation and also appreciate their yuan.
But I feel Chinese debt is higher than they're saying (not to say that there numbers were reliable from the start). In stocks I'm going to ride on those companies profiting in China, but as soon as I start seeing any sign of the debt surfacing, I'm gonna bail.

[Exarch]

Ah yes, the cut school hours . I don't mind them at all (to be honest it isn't even that noticeable).

I think the difference between American debt and Chinese debt is that the US has the ability to print the debt away, while China does not. Not to mention the tremendous level of US cash and capital (and with the EU debt crisis growing more precarious, more investors are flocking to the US). Its also a point of mentioning that if China were to use that money it may exacerbate inflation and also appreciate their yuan.
But I feel Chinese debt is higher than they're saying (not to say that there numbers were reliable from the start). In stocks I'm going to ride on those companies profiting in China, but as soon as I start seeing any sign of the debt surfacing, I'm gonna bail.

China, like everyone else has been diversifying their portfolios; the USD will remain a reserve currency but general consensus now is that it'd be more sensible not to be so exposed to US debt and you can thank among other things, that little stunt the Republicans and Democrats pulled over the debt ceiling a coupla months ago.

China uses its holdings of USD the same way the Japanese do; to manipulate their own currency in order to make their own respective currencies (Yen for Japan, Yuan for China) cheaper and more competitive; Obama, Boehner and Co. would have better luck trying to convince a US ally like Japan to revalue their currency than trying to convince a non ally.

on the topic of bringing jobs to Americans:

Spoiler Alert, click show to read: 

he governors of four states are currently in China this week in hopes to build relationships and shake hands with the right business leaders; the kind that will invest in jobs in the U.S., preferably in one of their home states.

Leaders from North Carolina, Hawaii, Washington and Georgia met in Beijing on Wednesday to discuss economic cooperation.

Xie Yuan, director of Department of American and Oceanian Affairs at the CPAFFC, told the China Daily that improving sub-national level economic cooperation and local employment would be the main topics among the governors.

“Even though the U.S. federal government has been keen to cut the high domestic unemployment rate and boost its flagging economy, the overall result hasn’t been very encouraging. Gaining Chinese trade orders and investment could help these US governors to win concrete political support in their states,” Xie told the paper.

Xie said some Chinese investors were interested in U.S. resources, alternative energy and biotechnology, especially in the area of agriculture.

The delegation is being led by Washington Governor Christine Gregoire. She said they governors’ main goal of the trip was to eventually create jobs. “We know we have to reach out to our international business partners. That’s who’s buying our products right now,” Gregoire said in a news release. China is the largest trading partner of Washington State. Washington’s exports to China in 2010 reached $10.3 billion, up 442% over the last decade, according to a report from the US-China Business Council.

Gregoire also led a delegation of 80 business and community leaders to China last September. Chinese governors and business leaders met in July in Salt Lake City during meetings similar to the ones taking place this week in Beijing.

Source:http://www.forbes.com/sites/kenrapoz...turn-to-china/

ppl wanting to go all protectionist should understand the level of trade and investment ties between the 2 countries and it's not just Apple or JP Morgan sending investment money to China; it's also Chinese money returning to America in the form of jobs and investment:

Spoiler Alert, click show to read: 

WASHINGTON - To help spur exports to China and boost domestic employment, six US governors will visit China to explore trade opportunities with their Chinese counterparts.
Their visit follows the attendance of four Chinese provincial leaders at the US-China Governors Forum, held in Utah's Salt Lake City in July.
Related readings:

North Carolina governor seeks expanded investment
The governor of North Carolina will attend 25 meetings with Chinese companies that are at various stages of expansion in the state.
Hunan hopes to attract Fortune 500 firms
Hunan will work closely with US companies in the fields of high-tech commodities, scientific cooperation and services in an effort to achieve more economic goals.
Shandong governor says huge potential for business with US
Shandong province hopes to expand cooperation with the United States as the coastal province steps up efforts to set up special economic zones, said Governor Jiang Daming.

Hawaii to reach out to Chinese travelers
Reaching out to China's booming tourism market will be a priority for Hawaii Governor Neil Abercrombie during the three-day China-US Governors Forum in Beijing.
Starting on Wednesday in Beijing, the second session of the forum will continue to help the sub-national governments of both countries get acquainted with each other and establish exchanges in trade, culture and education.
The forum, jointly convened by the US National Governors Association (NGA) and the Chinese People's Association for Friendship with Foreign Countries (CPAFFC), was one of the major achievements of President Hu Jintao's visit to the US in January.
Xie Yuan, director of Department of American and Oceanian Affairs at the CPAFFC, said that improving sub-national level economic cooperation and local employment would be the main topics for both Chinese and US governors during the talks.
"Even though the US federal government has been keen to cut the high domestic unemployment rate and boost its flagging economy, the overall result hasn't been very encouraging. Gaining Chinese trade orders and investment could help these US governors to win concrete political support in their states," Xie said.
Xie said some Chinese provinces are also thirsty for US resources, green energy technology, scientific cooperation and agricultural products.
The governors of Georgia, Hawaii, North Carolina, Guam and Northern Mariana Islands will visit Beijing on a delegation led by Washington Governor Christine Gregoire.
"To grow jobs and economic growth - we know we have to reach out to our international business partners. That's who's buying our products right now," Gregoire said in a news release.
China is now the largest trading partner of Washington State. Washington's exports to China in 2010 reached $10.3 billion, up 442 percent over the last decade, according to a report from the US-China Business Council.
The governor led a delegation of 80 business and community leaders to China last September and she has seen great benefits from such trips.
"We have to be aggressive. With the amount of global competition - we can't sit back and wait for international prospects to come to us," she said.
Since the 2008 financial crisis, US state officials have been struggling with the sluggish economy and growing unemployment. As a result, trade ties with China have become increasingly important to the US economy.
China is the largest export market for US goods outside North America.
For instance, China is the second-largest export market of both Georgia and North Carolina, with total exports worth $1.8 billion in 2009. Their growth in exports to China was over 400 percent between 2000 and 2009, while it was only 51 percent and 14 percent respectively to the rest of the world.
Georgia's main exports include paper products, processed foods and transportation equipment. In addition, 16 Chinese companies have invested in the southern state, employing more than 524 local workers.
North Carolina mainly exports computers and electronics, chemicals, nonmetallic mineral products and agricultural goods.
Hawaii Governor Neil Abercrombie and Guam Governor Eddie Calvo told China Daily that they hope to attract more tourists from China.
On the Chinese side, provincial governments can gain more access to overseas markets through the forum. In July, governors from Zhejiang, Anhui, Yunnan and Qinghai provinces presented their region to more than 20 US governors. In addition, 15 states had one-on-one meetings with Chinese governors, and more than 20 deals were signed.
Former US trade representative Charlene Barshefsky praised such local exchanges.
"The real sources of economic activity and sources of jobs are located in states or provinces," she told China Daily.
"Having much more participation of these sub-national entities in negotiations, programs, and exchanges is absolutely the right thing to do."

Source: http://usa.chinadaily.com.cn/us/2011...t_13930655.htm

[bushbush]

Ah yes, the cut school hours . I don't mind them at all (to be honest it isn't even that noticeable).

I think the difference between American debt and Chinese debt is that the US has the ability to print the debt away, while China does not. Not to mention the tremendous level of US cash and capital (and with the EU debt crisis growing more precarious, more investors are flocking to the US). Its also a point of mentioning that if China were to use that money it may exacerbate inflation and also appreciate their yuan.
But I feel Chinese debt is higher than they're saying (not to say that there numbers were reliable from the start). In stocks I'm going to ride on those companies profiting in China, but as soon as I start seeing any sign of the debt surfacing, I'm gonna bail.

Two things:

1. US can't just print debts away. Inflation will hurt average Americans significantly and political pressures won't allow it. Why are you not seeing QE3 right now? why is everyone calling Bernanke's blood?

2. China has very high savings versus US with very high household debts. It might be bad for China with regard to domestic consumption (though that is changing), but it is really good for China to deal with its debt issue.

Regarding this article, I generally agree with it. Europe's fall will continue. US's biggest advantages to me are its vast resources and its immigration policy. It will forever have a base to build its industries and it will always have young and talented workers from all over the world to man them. Europe is aging and its advantage in manufacturing and technology is declining. It is becoming a museum and shopping mall for the rest of the world increasingly. The most important relationship in the 21st century will be between US and China.

[JP226]

nice article,
but a few objections:

highly unlikely, companies like profit so even if they move their factories out of China, they might not make it back to the US; it's far more likely they'd move them to Vietnam, Bangladesh, India or any other country where labour costs are cheaper. The experience of Apple is the future where designs are formulated in the US and the rest is put together across Asia.

If Evans-Pritchard wanted to cite an advantage of the US outside of continental resources and geography, i'd cite a potentially large market for green energy, even in spite of climate change naysayers, which could generate jobs in the US-and has; take that Suntech factory that opened in Arizona last yr, for all those who get on the bandwagon of 'China stealing our Jerbs', that's one of many cases of Chinese companies opening factories in the US, generating jobs and investment.

They aren't moving out of china b/c labor is getting more expensive. It's still so incredibly cheap that it's a non issue. It's the price per barrel of oil and the rise in automated factories here in the US that is seeing that push. Vietnam is no better than china, especially when you are competing with 24 hours a day 7 days a week robotic workforce.

[Doge Domenico]

The telegraph is a British paper right? Why don't they use percent signs?

[Gromovnik]

America will not rise again because it's running out of Americans. They were strong because of their strong population. You can't change the population and expect that everything will remain the same.

[Condottiere 40K]

America will not rise again because it's running out of Americans. They were strong because of their strong population. You can't change the population and expect that everything will remain the same.

I'm sure the deficit can be made up from south of the border.

[Enemy of the State]

Abolish the corporate income tax, open the borders and cut down on bureaucracy and it just might happen.

[Admiral Piett]

I'm having doubts the Keithstone pipeline will be completed with all the environmental nuts incessant lawsuits and pull on certain congressmen.