Did We Hand Asia to China?

Discussion in 'Political Opinions & Beliefs' started by tsuke, Jan 24, 2017.

  1. tsuke

    tsuke Well-Known Member

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    Did We Hand Asia to China?

    The outcry has begun over the TPP. Richard Haas says that it will slow US growth and the primary beneficiary is China. Micheal Mcaul says we just handed China a major victory. For free! I don't need to mention the others including John Mccain espousing gloom and doom.

    What Actually Happened?

    We cancelled a multi-lateral trade deal with a bunch of countries in Asia. Does this mean that we will cease all trade with all Asian countries for now till eternity? No it does not. We have bilateral agreements. We have the WTO. We have prior relationships. All it means is that we will not have this particular trade agreement.

    Why are we against it? Well first off bi lateral agreements are much easier to manage and negotiate than ones involving multiple countries. They are also much easier to change and annul. We also have a problem with the potential for outsourcing that this deal has as we have experienced first hand with NAFTA.

    Why TPP?

    The main argument for TPP seems to be that if we do not do it China will. China is pushing this deal called Regional Comprehensive Economic Partnership which would theoretically replace the TPP. According to foreign policy analysts this would freeze out America and give China regional dominance in Asia. Basically China would replace the US in the web of Asian trade.

    Let us take a look at the numbers. TPP includes 37.5 of global GDP , 25.9% of global trade, and 11.1% of the global population. RCEP includes 30.5% of global GDP, 27.4% of global trade, and 47.9% of the global population.

    Do you see the problem now?

    Can China Replace the US?

    In short no. If you look at the numbers all the economies involved in the RECP are producer economies. For normal trade deals to work there normally has to be a stronger economy which outsources the jobs to the poorer one who then makes cheap products. The stronger economy now has access to cheap goods extending their budget and can then shift to other more productive fields.

    In the case of RCEP the economies involved are the ones that are being outsourced too. The sweet sweet irony here is the countries involved in the RCEP have even lower wage scales than China! China will be in the exact same position as the US as its manufacturing base is outsourced to Vietnam and the other countries.

    30.5% of the GDP shared by almost 50% of the populace means that there are almost no consumers to sell to and very little opportunity to make the profits required for the deal to be worth it. It says that almost everyone involved is barely subsisting.

    The misconception here is that China can replace the US because of the size of its GDP. The US is the most desirable market in the world not just because of the production of its people but because of its purchasing power. Welfare, Food Stamps, Government Assistance, Easy access to credit. You may not like some of these things but it means that the average American can spend consume a much greater amount of goods than their paycheck would suggest.

    In summary. China cannot replace the US in Asia with its trade deal. China and the US fulfill different roles in trade. RCEP is looking a lot like their version of NAFTA. The people who think that China will use this deal to be "economically dominant" are the same people who thought NAFTA was a good idea. The people in RCEP will need bilateral agreements with the US to have a market to sell to. For most of them the US will still be the most important trading partner.
     
  2. mitchscove

    mitchscove Well-Known Member Donor

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    Actually, Obama let China take it with the illegal militarized island he allowed China to build. The Philippines who used to be a great friend --- we even had a Navy Base there at Subic Bay --- told Obama to pound sand. In order to sell into China, we had to manufacture there ,,, within months, they would be selling our technology to US consumers.

    No country that hyperventilated over China's market of 1.5 billion people made out --- and TPP was going to ensure that continued. Fair trade, business friendly regulations, and sane tax structure will allow companies to pay employees as opposed to lawyers and the Federal and Foreign Governments.
     
  3. lemmiwinx

    lemmiwinx Well-Known Member Past Donor

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    China is Asia as far as military matters go. Our best option with the Chinese is to get the Japanese back into military mode because the Russians (who could be our friends if they want) don't seem to be keen about taking them on unilaterally.
     
  4. tsuke

    tsuke Well-Known Member

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    first off you have to admit that 1.5 billion customers does not mean anything if 70% of them dont have enough money to buy a shirt. Depending on your product your market is a lot smaller than that.

    - - - Updated - - -

    actually having a friendly Russia causes enormous complications for the Chinese. It may be accurately described as their nightmare scenario. Just look at the size of the border.
     
  5. One Mind

    One Mind Well-Known Member Past Donor

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    TPP was written by the banking cartel and MNCs, in their self interests and against American interests. Most of TPP was not about trade with those nations, but the device of offshoring to 56 cents an hour labor, to fatten up profits. It also made MNCs stronger virtual states, even usurping sovereignty, removing local control, with tribunals filled with banking and MNC people to render fines and judgements on American localities. It looks like oligarchy writing trade policy which exceeds trade policy. And you will never know the identity of the private sector players in the writing of these free trade agreements. A policy that changes your life, you are not allowed to know who was involved in writing it. Top secret. Nothing good ever comes from what is written in secrecy. Yet you have to remind people of this truism.
     
  6. lemmiwinx

    lemmiwinx Well-Known Member Past Donor

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    Russia could be a good ally for us but unfortunately Democrats see Putin as a privileged white guy who doesn't respect Russia's Soviet Socialist heritage. If he could just bring back the hammer and sickle flag they might be more sympathetic.
     
  7. tsuke

    tsuke Well-Known Member

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    notice how none of the left are responding :)
     
  8. PoliticalHound

    PoliticalHound Banned

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    Should "we" hand Asia to China.

    I ignore the geographic mistakes to ask why Russia would be friends? They are ruled by Vladimir Putin and not Yeltsin.

    Remember Russia has nearly completed their nuclear upgrade program. Russia is returning to the world stage and they are not doing it for childish friendships but for self interest.

    What can you offer them they won't take by force? This is currently the western dilemma.
     
  9. Pycckia

    Pycckia Well-Known Member

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    Markets.
     
  10. PoliticalHound

    PoliticalHound Banned

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    ? This must be six characters. So Question Mark. ?
     
  11. MVictorP

    MVictorP Well-Known Member

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    Good thing. Asia is a dragon's lair and China is that dragon. The TPP was doomed to fail, and ruin western economy just for pissing the Chineses' sake.

    America should play it more defensively these days - Not only the Chinese master Asia, but they also get close to South America. Don't expect China's influence to shrink if America goes protectionist - to the contrary.

    Oh - and those who think that Russia will join America against the Chinese: Ha ha ha.
     
  12. PoliticalHound

    PoliticalHound Banned

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    Yes that is delusional. The delusional belief Russia join USA\West vs China. It is the reverse.

    I hope there are serious people in America. Or this juvenile approach of infantile friendship will be very costly for them.
     
  13. undertheice

    undertheice Well-Known Member

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    first, we aren't talking about friendships here. nations are not friends, they are allies and these alliances are always based on self-interest. for decades the us and europe maintained an antagonistic relationship with russia. this progressed, after the break-up of the soviet union, to an attitude of condescension. russia has now reinvented itself and is a new beast to be dealt with. with a belligerent nato arming its doorstep, the always pragmatic russians are once again ready to regain their place on the world stage and they will be formidable enemies if we choose to follow the same path that led us to our cold war animosities. the alternative is to not make those same mistakes, to forge alliances that may be able to negotiate away troubling aggressions. putin is not a fool. he knows that nato, even without american backing, poses enough of a threat to damage the russian economy in the same way it was crippled under reagan and, should the eu nations ally themselves with certain middle-eastern nations or even china, that destruction would be assured. the logical course of action would be a loose alliance between western nation and russia, leaving a china that has already proven itself to be both militarily and economically belligerent alone with its dreams of empire.
     
  14. PoliticalHound

    PoliticalHound Banned

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    That was a wonderful speech unfourtantly both naive and unrealistic.

    If want realism. go to VKontakte or http://www.russiadefence.net Tell the Russians your dreams of American friendship.

    But don't threaten them. Good Luck.
     
  15. tsuke

    tsuke Well-Known Member

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    Ok. So you add south american countries to RCEP. You run into precisely the same problem. Nobody has the money to buy anything.

    The US and Europe to a lesser extent are desirable markets because they have the purchasing power to absorb your product. For instance you can make a shoe for 50c in mexico and sell it for 50$ in the US and you would have a market because people have either the raw capital to buy it or easy access to other things that amplify their purchasing power.

    Contrast that with countries involved in RCEP + south america as you mentioned. The countries involved are the ones making the shoe for 50c therefore their wages are just a portion of that so they will not be able to afford the 50$ shoe. Each country would have a very small portion of the elite that can afford it but thats it. They will not be able to absorb consumption.

    I already listed the GDP, Trade share, and population share of each deal.
     
  16. MVictorP

    MVictorP Well-Known Member

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    BRICS countries are emerging economies. That is where the longer-term markets are based. High populations. Europe and the occident in general are declining, saturating markets. Only the rich there buys anything nowadays.
     
  17. tsuke

    tsuke Well-Known Member

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    That maybe true in the future but there is still no one to sell to now.

    Most of the countries you mentioned have an even lower wage scale than China as you see factories moving from China to Vietnam and other countries for reduced labor costs.

    The RCEP is shaping up to be like NAFTA for the Chinese except that they dont have anyone to sell to.
     

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