China’s Surplus…US’s Deficit
By Justin Gardner | Related entries in Economy, The WorldSaw these two stories on the Drudge Report. Very telling…
First China:
BEIJING (AFP) - China’s soaring exports pushed the trade surplus to a record 80.37 billion dollars in the first 10 months of the year.Exports from the January to October period gained 31.1 percent to 614.49 billion dollars compared with the same period last year, while imports rose 16.7 percent to 534.12 billion dollars, the China Customs Administration said Thursday.
October exports surged 29.7 percent year-on-year to 68.09 billion dollars in October, while imports to China jumped 23.4 percent to 56.08 billion dollars, on stronger demand at home.
China’s exports for the first nine months hit 68.3 billion dollars.
Economists believe that, despite strengthening domestic demand, at the current pace China’s trade surplus will be around 100 billion dollars.
Then the US:
WASHINGTON — The trade deficit soared to a record in September as the Gulf Coast hurricanes helped push America’s foreign oil bill to an all-time high. The politically sensitive deficit with China also set a record.The Commerce Department reported Thursday that the deficit jumped to $66.1 billion in September, 11.4 percent higher than the $59.3 billion imbalance recorded in August. It was a far bigger increase than analysts had been expecting and reflected in part a record $23.8 billion in oil purchases as the price skyrocketed, reflecting widespread shutdowns of production facilities following hurricanes Katrina and Rita.
So far this year, the deficit is running at an annual rate of $706.4 billion. This puts the country on track to far surpass the old deficit record of $617.6 billion set last year and gives critics ammunition to argue that President Bush’s trade policies are not working.
Everybody knows that the War on Terrorism is going to be going on for a long time. In the short term, maybe we should focus our energies and have a War on Deficits, instead of thinking that supply-side economics can actually pull us out of this hole.
This entry was posted on Thursday, November 10th, 2005 and is filed under Economy, The World. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
November 10th, 2005 at 5:11 pm
One of the major reasons why China can do so much: Well over a billion people that represent very cheap factory labor. We cannot match that, and thus our own factory sector suffers. China is pulling everybody into their orbit.
The only way we could possibly compete is to lower our wages down to their level. So much for our standard of living…
November 10th, 2005 at 11:10 pm
I’m not a big fan of the “War of Terror” (is “Terror” an adjective or a noun in this War), but what’s so wrong with a trade deficit? I suspect that in the long run, the Gulf Coast hurricanes will have the effect of decreasing the trade deficit.
I agree though, that we should Wage a War on BUDGET Deficits: First, we cut federal spending by 50% (eliminate all corporate welfare schemes, i.e. all you grant writers have to get real jobs), flat tax the country at 17%, eliminate the minimum wage and bring our military home…for Cindy’s sake.
I’m apologize Justin, I haven’t taken my medication all week.
November 11th, 2005 at 1:35 am
Interesting ideas. How do you think this would play out in real dollars? What would be the implications?
November 12th, 2005 at 1:00 am
How do you think this would play out in real dollars? What would be the implications?
I would get more of my money. I really don’t need the federal government to promise to repay me in the distant future, so they can borrow my money for other purposes and lie to me. Social security should be privatized.
At 17% I’d be paying a lot more of my income than some and lot loss of it than others. It seems mighty progressive to me. And with no minimum wage and relaxed immigration laws, the Casa de DosPeros would become the multicultural Mecca of hired-help in North America.
In terms of real dollars, I’m not afraid of inflation unless someone can convince me otherwise. The immediate implication would be to make health insurance much more affordable for many families, including my own.
November 13th, 2005 at 6:06 pm
You’re great DosPeros — but PorkBusters can’t even get a Rep Congress to cut out an Alaska bridge to nowhere for Katrina. Only budget Dems would cut is military, the one “provide for the common defense” that needs providing for. “Promote the general welfare” doesn’t need involuntary tax support.
FDR should have started out with required savings for retirement, PLUS means tested additions (from the employer’s matching payroll tax).
On China, remember poor US folk get $10 China jeans from Wal-mart — and China gets green paper. Eventually they’ll use the USD to buy Saudi/ ME / Russian oil, and the oil sellers will get US$ — and buy something. Maybe US real estate?
Trade deficits are no problem, they’re a smokescreen to support protectionsim. To protect overpaid workers who want poor foreigners to stay poor. When fiscal deficits start increasing the long term interest rates, the rate increase chokes off investment money, and thus growth. Inflation can hide this for awhile, but then there is less growth AND more uncertainty (which causes even less growth).
(See Marginal Revolution, or Arnold Kling TCS.)
April 21st, 2006 at 7:39 pm
It is a disgrace that America has choses the short sighted value of cheap labor for the long term pain of the declining dollar. Collapse of the dollar is near..