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our trade deficit with china, please learn me

Discussion in 'The Lounge' started by R77K10, Apr 16, 2006.

  1. R77K10

    R77K10 Banned

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    ok one of a few things i have been confused about and not learned about is our trade deficit with china

    i read this paragraph in a news story out right now about the deal with tawain and china indifferences and hu coming ot america now to talk with the US about it:

    "President Bush has said he will talk about fair trade practices, singling out what Washington considers an undervalued Chinese currency that makes Chinese exports cheap and contributes to the United States' ballooning $200 billion trade deficit with China." copyright yahoo mail and the associated press 2006

    200 billion?

    wtf ??

    and how ?

    laymans terms please


    http://news.yahoo.com/s/ap/20060416/ap_on_re_as/china_taiwan


    thanks
     
  2. ryan22re

    ryan22re 1/2 ton status

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    laymans terms:

    the chinese dont buy american products. we buy chinese products.
     
  3. dyeager535

    dyeager535 1 ton status Premium Member

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    In other words, some scream "buy american!!!!" and proceed to buy everything BUT cars made in China, (or taiwan, or korea, name it) since we value cost, not quality in this country anymore.
     
  4. R77K10

    R77K10 Banned

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    ok so whats the real problem though?
    we are buying on credit or what?

    200 billion !!

    so is this country gonna be in deep crap eventually over this

    i mean its an insanely huge debt

    dont ppl notice ?

    i notice..

    hum

    im confused

    thanks
     
  5. ryan22re

    ryan22re 1/2 ton status

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    i really dont see what the big deal is. those products are sold in the us. which means taxes, tariffs, and profits for the people who sell them. you get decent products at cheaper prices because the labor is cheap in china. you dont want to pay union wages to make a .99 cent item do you?
     
  6. blazinzuk

    blazinzuk Buzzbox voodoo Premium Member GMOTM Winner

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    I believe the trade deficit they are speaking of is the fact that we buy x amount more of chinese stuff than they buy of american stuff
     
  7. Thunder

    Thunder 3/4 ton status

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    BasiclyThe problem with the trade deficit with China simply boils down to the fact that China has kept its money artifically undervalued compaired to the dollar.
    That keeps their products extremly cheap for the US and other countries import. But the chinese people cant afford to buy ours or other countries exports because it costs so much in chinese dollars. The chinese people are forbidden by law to own forign currancy. That forces them to buy only chinese goods because they cant afford to buy US imports.
    President Bush is putting a lot of pressure on China to increase the value of its money and to let it "float" Which means it would be valued by the world economy and not be artifically controled by its government. And to let its citizens be able to buy forign currancy.
    Bush has partially succeded in forcing China to start increasing the value of its money. But they still wont float it in the world economy. Our congress has threatened to hit chinese imported goods with huge tarrifs(Taxes). Unless they bring their money up to its value.
    It will be a long process to get China to be an equal player the global economy. But the first steps have been taken.
    There are up sides and down sides to this tho...................
    The up side is more US manufacturing jobs.
    The down side is higher costs for products and higher inflation.
     
  8. jekbrown

    jekbrown I am CK5 Premium Member GMOTM Winner Author

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    its not really debt, its just the difference between how much the US imports vs how much China imports. It isn't really relevant to much of anything. The US population consumes a lot of goods/materials... other places in the world sell them to us cheap... people in Tanzania can't afford to buy expensive made-in-the-USA stuff... hence the "deficit". Its nothing to worry our little heads about. Every 20 years or so its a different country (japan, now china etc) but the effect is pretty much the same: there isn't one.

    j
     
  9. mouse

    mouse 1/2 ton status

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    Thunder's explanation is basically what I would give. When I graduated with my MBA two years ago, I tailored my degree to overseas trade, and especially China.

    President Bush has been insisting that the Chinese bring their currency up to its real value. Rather than a fixed (manipulated) value, if they let it float on the international markets, suddenly anything made in China would cost a lot more.

    But, that would have other side effects. Probably temporary, because many US company have products assembled in China due to the cheap labor.
     
  10. R77K10

    R77K10 Banned

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    interesting stuff

    learn something new everyday

    usually

    thanks :D
     

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