Archive for the ‘China’ Category

The China Effect: A Reply to The China Business Forum

Friday, February 3rd, 2006

The China Business Forum recently (January 2006) released a report titled “The China Effect” that claims “the long-term benefits to the United States of Trade with China are substantial and likely to endure (Executive Summary).” The top line conclusion of the report is that the average US household stands to be one thousand dollars better off by 2010 as a result of lower prices and increased productivity in the U.S. due to the China effect. The bottom line take-away from reading the report is that it is flawed and misleading. Here is why. (more…)

Exchange Rates, Labor Standards, and Democracy: Why China Must Change

Saturday, December 10th, 2005

For the past five years the global economy has been flying on one engine. That engine is the U.S. consumer who has been on a consumption binge financed by borrowing, in turn backed by a housing price bubble. This situation poses the threat of a serious hard landing when that engine eventually stalls, as it must. Ever inflating house prices and rising debt-to-income levels are not sustainable. And as the late Herbert Stein, Chairman of President Nixon’s Council of Economic Advisers, wryly observed: “If something cannot go on forever, it will stop.” (more…)