December 22, 2005: China's exports to the US not only promote China's development but also help consumers in US market to source their requirements at competitive prices. By an estimate, Walmart-USA is sourcing 45% of its purchases from China. These purchases do not include processed food and other eatables. A report by Morgan Stanley shows China's low-priced quality products have saved American consumers over $600 billion over the last ten years and $100 billion in 2004 alone.
About US $400 million is saved by American holds on purchase of Chinese garments alone. Cheaper Yuan or say Cheaper Chinese imports may have hurt US industry by then US itself was protagonist of free trade and China is able to sell cheap because of its lower cost of production and its manpower is not so unionized. Of course there could be some element of labor exploitation as well.
But job losses in manufacturing segment in US have been compensated by job gains in trade sector too. On the other hand, Chinese imports from the US bring obvious benefits to both sides. China imports huge amounts of farm produce such as wheat, soybeans, oranges as well as airplanes and fertilizer to meet China's production and living needs, which at the same time effectively sustains America's economic development and employment.
An expensive Yuan would hurt US exporters too. China was the 9th largest market for US exports in 2001 and by 2004 it has grown to be the fifth.
The US Chamber of Commerce in China released a white paper on American businesses in China recently. Its survey of its member companies shows 93 percent American-funded business in China believe the Chinese economic reform has improved business environment for American businesses.
And increased Chinese earnings ring music to US arms companies too for which China is a big buyer.
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