China, the New 800 Pound Gorilla

China, the New 800 Pound Gorilla

by Won Kow Dung

November 05, 2007

(orig. publishing date)

Do not remove a fly from your friend’s forehead with a hatchet. ― Chinese proverb

Calling America a friend by China is an exaggeration. China, as other countries, are users of others for its own means. It used the U.N. to get Taiwan (Republic of China) to be replaced by the mainland, to become the representatives of China. It used the U.S. to get into The World Trade Organization. It will again use us, to get the renegade Taiwan back into the clutches of Communist China, by threatening to stop supporting our debt, when they feel the time is right.

Before WTO’s inclusion, China was a large populated sleepy agricultural community. Now, with its large population and industrial clout, it’s becoming an 800 pound gorilla. We must learn something, and quickly, from this smart-ass attitude of China. They make defective products; then admonish us for complaining about it. The reliance we have on them, economically (business) and fiscally (government), is too dangerous. We have allowed China to develop a virtual monopoly over our economy. No uncontrolled monopoly can go unchecked, without creating severe consequences.

It’s like a cancer (literally). A terminal cancer goes on a rampage throughout an organ, or the whole body, and ultimately destroys it with death. Thereby, the cancerous cells commit suicide. When the body dies, so does the cancer. So China and Japan must gingerly feed the cancer, (our massive debt), and slowly reduce their large influx of our debt.

As of June 2006 our treasury debt was $8.5 trillion. We consume 52% of the debt through domestic borrowing. By June 2007, the debt is now $8.9 trillion, (65% GDP). We now consume 45% of the debt through domestic borrowing. Mostly through the savings accounts of Social Security and Medicare. The private sectors contribute from state and local governments, investors, public and private pension funds, insurance companies, U.S. Saving bonds and bank and credit unions. Foreign governments contribute 27%, a 2% increase since June 2006. As a group, Japan and China are the biggest ones. Other major buyers of our debt: United Kingdom and the oil exporting countries. Most other countries, including smaller nations, throw in a few bucks every year, through T-bills.

Though Japan almost doubles China’s holding of our federal debt, China’s is more troubling. I don’t fear that Japan has visions of takeovers. I do, with China. It has far too much of our imports. Though now an industrial nation, it’s still a Communist one. They are developing nuclear weapons. They sell conventional weapons to radical countries in the Middle East. They want Taiwan back. I don’t trust them. Its support of our national debt has become too large in a few short years. We must attack this 800 pound gorilla on two fronts. As consumers, we can help control the influx of imports by buying as little as possible. I, for one, buy Chinese stuff, begrudgingly, only when I really have to, like shoes. When looking at manufacturer’s, don’t be mislead by the distributor’s info. Most often it’s an American company. Check the ‘Made in’ part. It’s usually ‘Made in China’.

I’m shopping around for new eyeglasses. I’ve checked out three places. Two have virtually all Chinese frames. The third has frames from Japan, Korea, Italy and of course, China. The prices are close in pricing. China: $90 (only 2 that I saw) to $160 (average) to $250 (high-end). Others: $160 (low) to $230 (average) to $320 (high). For an average of $70 more, I can buy something I want. To me, the extra cost is more than acceptable. I have a choice. That’s what I want. I’ll pay more for that if I have to. I’ll be buying my glasses from the third eye wear shop.

The other front is action by the federal government. It must either put a higher tariff on Chinese imports, or put a dollar or unit limit on Chinese good. This will allow and encourage other countries to get into our markets. If we, as consumers, must rattle its cage, (our federal government) to get this done, then we must. We want choices.

© 2007 by James M. Britvich All Rights Reserved 

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