26/12/2003
China, the U.S., and comparative advantage
Even in China people know what "comparative advantage" means:
"While Yang is sowing prosperity in China, the U.S.’s new penchant for protectionism could bust his big plans for brassieres. Asset Underwear, which grossed $10 million in exports last year, recently began negotiating with Sara Lee, maker of Playtex and Wonderbra, to produce some of its lingerie. But the new quotas on Chinese bras, bathrobes and knit fabrics have forced the Chicago company to withdraw. Yang is mystified. "Why can’t the Americans stick to making what we can’t?" he asks. "For little things like bras, nobody can compete with China.""
But some Americans seems to be unaware of this basic principle of an open capitalist economy:
"Some U.S. manufacturers are complaining and demanding protectionist legislation from an Administration that seems to be listening — at least with one ear. Although he bills himself as a free trader, Bush is finding it hard to ignore the millions of manufacturing jobs that have disappeared from states, like Pennsylvania and North Carolina, that will be pivotal in next year’s election. He has unleashed Commerce Secretary Don Evans and Treasury boss John Snow to bark at the Chinese about exports and the cheap value of the yuan. Lawmakers sensitive to job dislocations among their constituents have loaded into the pipeline at least six bills that relate to trade with China. Jim Leach, the Iowa Republican who chairs the East Asian and Pacific Affairs Subcommittee of the House’s International Relations Committee, says that future conflicts with Beijing will be "more about geo-economics than geopolitics" and that it’s "largely up to China" to ease tensions."
If you’re searching for the soul of classical liberalism, maybe China is the place to start.
Anyway, read the rest of the article.
Gepost door/Posted by: Ivan
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