{"id":2227928,"date":"2024-04-23T08:35:02","date_gmt":"2024-04-23T12:35:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/how-chinas-flood-of-cheap-exports-boosts-its-economy-and-kills-ours\/"},"modified":"2024-04-23T08:41:33","modified_gmt":"2024-04-23T12:41:33","slug":"how-chinas-flood-of-cheap-exports-boosts-its-economy-and-kills-ours","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/how-chinas-flood-of-cheap-exports-boosts-its-economy-and-kills-ours\/","title":{"rendered":"China&#8217;s Export Surge: Economic Boost or Economic Drain?"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fhow-chinas-flood-of-cheap-exports-boosts-its-economy-and-kills-ours%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2227928&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>Summary: China&#8217;s strategy of flooding global markets with cheap goods to revitalize its economy\u200c has \u200bsparked concern among trade partners. President Biden&#8217;s proposed tariff hike on\u200b Chinese\u200b steel and aluminum aims to address this issue. China&#8217;s economic woes stem from Xi Jinping&#8217;s policies leading to a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/bls-bidenflation-rose-8-6-in-may-the-highest-since-1981\/\" title=\"BLS: Bidenflation Rose 8.6% in May - the Highest Since 1981\">significant economic slowdown<\/a>, prompting reliance on old tactics. Increased\u2063 tariffs \u2064may impact prices but could influence China&#8217;s export behavior.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<p><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><\/p>\n<div class=\"article-content\">\n<p>China is <a href=\"https:\/\/www.wsj.com\/world\/china\/china-shock-2-0-will-be-different-027d5d30?mod=WTRN_pos7&#038;cx_testId=3&#038;cx_testVariant=cx_163&#038;cx_artPos=6\" target=\"_blank\" rel=\"noreferrer noopener\">flooding<\/a> the world with cheap goods (aka dumping) to reboot its economy, threatening the jobs and survival of competing industries in other countries. This week, President Joe Biden, speaking to a group of union workers in Pennsylvania, <a href=\"https:\/\/www.nbcnews.com\/politics\/2024-election\/biden-call-tripling-tariffs-chinese-metals-rcna148128\" target=\"_blank\" rel=\"noreferrer noopener\">called for<\/a> increasing the U.S. tariffs on steel and aluminum from China from 7.5 percent to 25 percent. He should have known that talking and making a symbolic gesture would be insufficient to stop China from flooding the U.S. market with cheap goods.<\/p>\n<p>Communist dictator Xi Jinping\u2019s <a href=\"https:\/\/www.wsj.com\/world\/china\/xis-tight-control-hampers-stronger-response-to-chinas-slowdown-868ab454\" target=\"_blank\" rel=\"noreferrer noopener\"><a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/nyt-decided-to-openly-lie-about-criticism-of-bidens-fed-pick-will-there-be-any-consequences\/\" title=\"NYT Decided To Openly Lie About Criticism Of Biden\u2019s Fed Pick. Will There Be Any Consequences?\">socialist economic policies<\/a><\/a> and his brutal and protracted \u201c<a href=\"https:\/\/thefederalist.com\/2022\/12\/30\/chinas-dictatorial-political-system-is-the-root-cause-of-its-disastrous-covid-policies\/\" target=\"_blank\" rel=\"noreferrer noopener\">Zero Covid<\/a>\u201d measures have caused the Chinese economy to <a href=\"https:\/\/www.wsj.com\/economy\/why-xi-can-no-longer-brag-about-the-chinese-economy-3397e6f4\" target=\"_blank\" rel=\"noreferrer noopener\">experience the worst slowdown in decades<\/a>. Xi stopped boasting about his China dream of surpassing the U.S. as the world\u2019s No. 1 economy after \u201cChina\u2019s gross domestic product, which was 75% the size of the U.S.\u2019s in 2021, had slipped to 64% in the third quarter, roughly where it was in 2017,\u201d according to <a href=\"https:\/\/www.wsj.com\/economy\/why-xi-can-no-longer-brag-about-the-chinese-economy-3397e6f4\" target=\"_blank\" rel=\"noreferrer noopener\">The Wall Street Journal<\/a>. <\/p>\n<div class=\"fdrlst__b89e9-paragraph-2-long d-flex justify-content-center\" style=\"margin-left: auto; margin-right: auto; text-align: center; \" id=\"fdrlst__b89e9-1315843029\">\n<div id=\"div-gpt-ad-1379703300879-0\" class=\"mb-30\"><\/div>\n<\/div>\n<div class=\"fdrlst__b89e9-4b5da0d38394bd6b793ea62223d59242 fdrlst__b89e9-paragraph-2\" id=\"fdrlst__b89e9-4b5da0d38394bd6b793ea62223d59242\"><\/div>\n<p>Xi has resorted to China\u2019s old playbook to stimulate the economy \u2014 subsidizing the manufacturing sector and incentivizing exports \u2014 hoping to export China\u2019s way out of this slump. It was what China did in the early 2000s after joining the World Trade Organization (WTO). China quickly became a trade powerhouse with an ample supply of low-wage labor, undervalued currency, and generous government subsidies and export incentives. The U.S. trade deficit with China has increased from <a href=\"https:\/\/www.census.gov\/foreign-trade\/balance\/c5700.html#2000\" target=\"_blank\" rel=\"noreferrer noopener\">$80 billion in 2000 to $418 billion in 2018<\/a>. <\/p>\n<p>Americans paid a high price for cheap imports. Unable to compete against cheap Chinese imports, many U.S. manufacturers were forced to relocate their factories to China or Mexico and shut down operations in the U.S. for good. At least <a href=\"https:\/\/www.wsj.com\/articles\/how-the-china-shock-deep-and-swift-spurred-the-rise-of-trump-1470929543\" target=\"_blank\" rel=\"noreferrer noopener\">2.4 million<\/a> good-paying manufacturing jobs in the U.S. were lost during the process. Economists labeled all these adverse effects on the U.S. economy as \u201c<a href=\"http:\/\/www.wsj.com\/articles\/how-the-china-shock-deep-and-swift-spurred-the-rise-of-trump-1470929543\" target=\"_blank\" rel=\"noreferrer noopener\">the China Shock<\/a>,\u201d which sowed political discontent among working-class Americans. Not surprisingly, during the 2016 Republican presidential primary, Donald Trump, who touted an anti-free trade message, <a href=\"https:\/\/www.wsj.com\/articles\/how-the-china-shock-deep-and-swift-spurred-the-rise-of-trump-1470929543\" target=\"_blank\" rel=\"noreferrer noopener\">won 89 of the 100 counties most affected by the China Shock<\/a>.<\/p>\n<h2 class=\"wp-block-heading\">World Can\u2019t Absorb All the Goods<\/h2>\n<p>China is still overflowing the global market with cut-rate goods, and the latest <a href=\"https:\/\/www.wsj.com\/world\/china\/chinas-overcapacity-is-already-backfiring-86f29e4a\" target=\"_blank\" rel=\"noreferrer noopener\">economic data<\/a> shows China\u2019s exports volume reached a 10-year high last month. Some economists argue that the adverse effects of \u201c<a href=\"https:\/\/www.wsj.com\/world\/china\/china-shock-2-0-will-be-different-027d5d30?mod=WTRN_pos7&#038;cx_testId=3&#038;cx_testVariant=cx_163&#038;cx_artPos=6\" target=\"_blank\" rel=\"noreferrer noopener\">China Shock 2.0<\/a>\u201d will be worse than the last one because the categories of Chinese exports have expanded to include high-tech goods such as electric vehicles and solar panels, and the world\u2019s ability to absorb Chinese goods is more limited than two decades ago.<\/p>\n<p>For example, Brad Setser, a senior fellow of the Council on Foreign Relations, <a href=\"https:\/\/twitter.com\/Brad_Setser\/status\/1776706567955484824\" target=\"_blank\" rel=\"noreferrer noopener\">pointed out<\/a> that China\u2019s capacity to produce solar panels exceeds even the most optimistic global demand. If China keeps its current pace of exporting, it will not only drive non-Chinese solar panel producers out of business but also \u201cforce Chinese suppliers themselves out of the market\u201d in the end. No wonder governments worldwide, including both developed and developing nations,\u00a0have <a href=\"https:\/\/www.wsj.com\/world\/china\/china-shock-2-0-sparks-global-backlash-against-flood-of-cheap-goods-d394238b\" target=\"_blank\" rel=\"noreferrer noopener\">reportedly<\/a> already taken more than 70 import-related measures targeting China, including launching antidumping investigations and imposing tariffs on Chinese goods.<\/p>\n<div class=\"fdrlst__b89e9-b6a461c30ce131d11269d27e099309e6 fdrlst__b89e9-paragraph-6\" id=\"fdrlst__b89e9-b6a461c30ce131d11269d27e099309e6\"><\/div>\n<p>What\u2019s also different this time is that Beijing seeks not only to revive China\u2019s economy but also to cement China\u2019s global dominance in <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/china-launches-tsunami-of-anger-at-olympics-sponsor-intel-for-leaving-uyghur-slave-region\/\" title=\"China Launches 'Tsunami of Anger' at Olympics Sponsor Intel for Leaving Uyghur Slave Region\">high-tech manufacturing<\/a> in critical sectors that the government identified in its \u201c<a href=\"https:\/\/r.search.yahoo.com\/_ylt=AwriiG4xnBlmdgQAEAhXNyoA;_ylu=Y29sbwNiZjEEcG9zAzYEdnRpZAMEc2VjA3Ny\/RV=2\/RE=1714164017\/RO=10\/RU=https%3a%2f%2fthediplomat.com%2f2019%2f02%2fmade-in-china-2025-explained%2f\/RK=2\/RS=mtGV75MWRblPJ0bUAEuN4ucj01g-\" target=\"_blank\" rel=\"noreferrer noopener\">Made in China 2025<\/a>\u201d industrial blueprint. Not surprisingly, while Treasury Secretary Janet Yellen was in China recently, the Chinese government and state media <a href=\"https:\/\/www.wsj.com\/world\/china\/beijing-pushes-back-on-overproduction-concerns-after-yellen-visit-a63d8046?mod=WTRN_pos1&#038;cx_testId=3&#038;cx_testVariant=cx_165&#038;cx_artPos=0\" target=\"_blank\" rel=\"noreferrer noopener\">dismissed<\/a> her complaint about China\u2019s dumping as promoting trade \u201cprotectionism\u201d and \u201ca pretext to suppress China\u2019s rise.\u201d The Biden administration shouldn\u2019t expect that nagging Beijing about dumping will somehow convince Beijing to change its behavior and abandon its strategic goals.<\/p>\n<h2 class=\"wp-block-heading\">The Need for More Tariffs<\/h2>\n<p>If President Biden is serious about stopping China from dumping its goods in the U.S., the first thing he needs to do is to increase tariffs on a broad range of Chinese imports, including electric vehicles, lithium-ion batteries, and solar panels. <\/p>\n<p>Higher tariffs on a wider range of imports from China will indeed increase prices of goods and services in the U.S. But Donald\u00a0Luskin, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-plans-to-unveil-advisory-warning-for-americans-doing-business-with-deteriorating-hong-kong\/\" title=\"Biden Plans To Unveil \u2018Advisory\u2019 Warning For Americans Doing Business With \u2018Deteriorating\u2019 Hong Kong\">chief investment officer<\/a> at Trend Macrolytics, LLC, <a href=\"https:\/\/www.wsj.com\/articles\/china-is-losing-the-trade-war-with-trump-1532729725\" target=\"_blank\" rel=\"noreferrer noopener\">compared<\/a> raising tariffs to a\u00a0drinking contest at a fraternity: The game is not about avoiding inflicting harm on yourself but about being able to stomach the pain longer than your competitor in order to induce a change of behavior. <\/p>\n<p>Such an approach worked before. When the U.S. trade deficit with China reached a historical high of $418 billion in 2018, the Trump administration kicked off a <a href=\"https:\/\/www.wsj.com\/articles\/trump-to-lay-out-line-on-china-trade-1537213209\" target=\"_blank\" rel=\"noreferrer noopener\">trade war<\/a> with China by imposing new tariffs on $200 billion in Chinese imports that year. China initially acted tough and retaliated by imposing tariffs on $60 billion in imports from the U.S. But after three rounds of back and forth, China ran out of U.S. goods to put levies on because China didn\u2019t import as much from the U.S. The Chinese government was forced to make <a href=\"https:\/\/thefederalist.com\/2020\/01\/24\/the-phase-one-u-s-china-trade-deal-is-a-serious-win-for-the-united-states\/\" target=\"_blank\" rel=\"noreferrer noopener\">concessions<\/a> and signed a new trade deal with the U.S. After Biden came into office, he <a href=\"https:\/\/www.wsj.com\/articles\/biden-still-undecided-on-chinese-tariffs-commerce-secretary-says-11661864401\" target=\"_blank\" rel=\"noreferrer noopener\">kept<\/a> most of the Trump-era tariffs in place. As of 2022, the U.S. trade deficit with China was about $382 billion, an 8 percent decline from 2018. <\/p>\n<div class=\"fdrlst__b89e9-a171c1004324beb7ea887ee9dafd5ca4 fdrlst__b89e9-paragraph-10\" id=\"fdrlst__b89e9-a171c1004324beb7ea887ee9dafd5ca4\"><\/div>\n<h2 class=\"wp-block-heading\">Precondition of Reducing Financial Repression<\/h2>\n<p>Besides tariffs, the Biden administration should set preconditions for future meetings. The Chinese Communist Party (CCP) usually demands concessions before agreeing to any meetings. Since China clearly cannot get out of its economic slowdown on its own and desperately needs access to the U.S. market, the Biden administration ought to demand the CCP lift its \u201cfinancial repression\u201d against the Chinese people as a precondition before agreeing to the next summit between Biden and Xi. \u201cFinancial repression\u201d refers to the CCP\u2019s policies of redirecting the Chinese people\u2019s capital for the sole benefit of the state by intentionally limiting individuals\u2019 investment opportunities in China, while encouraging people to put most of their money in <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-accuses-russia-of-ukraine-cyber-attacks-warns-invasion-would-bring-more\/\" title=\"US Accuses Russia Of Ukraine Cyber Attacks, Warns Invasion Would Bring More\">state-owned banks<\/a>.<\/p>\n<p>Under the party\u2019s directive, the state-owned banks pay ultra-low to negative interest rates to Chinese depositors. The CCP has been tapping these savings as cheap funding sources for its political projects and keeping China\u2019s currency undervalued to incentivize exports. The Peterson Institute for International Economics <a href=\"https:\/\/www.piie.com\/publications\/policy-briefs\/financial-repression-china\" target=\"_blank\" rel=\"noreferrer noopener\">estimates<\/a>, \u201cFinancial repression costs Chinese households about 255 billion renminbi (US$36 billion), and 4.1 percent of China\u2019s GDP.\u201d<\/p>\n<p>The Biden administration should demand China relax its \u201cfinancial repression\u201d against the Chinese people and let them decide how and where to deploy their capital best. Such individual financial freedom will stimulate domestic demand to absorb some Chinese manufacturers\u2019 overcapacity and reduce the pressure on these companies to dump their goods worldwide.<\/p>\n<h2 class=\"wp-block-heading\">Drop the EV Mandate<\/h2>\n<p>Last but not least, the Biden administration must pause its <a href=\"https:\/\/www.foxnews.com\/politics\/biden-finalizes-crackdown-gas-cars-forcing-more-than-50-of-car-sales-to-be-electric\" target=\"_blank\" rel=\"noreferrer noopener\">green mandates<\/a> on electric vehicles. The Environmental Protection Agency\u2019s new emission standards were designed to force Americans to switch from gas-powered vehicles to electric ones and to ensure that more than 50 percent of new car sales in the U.S. will be EVs by 2030. <\/p>\n<p>The EV mandate ignores the market reality that less than <a href=\"https:\/\/www.wsj.com\/articles\/joe-biden-electric-vehicle-mandate-gas-powered-cars-2032-epa-c2a72414\" target=\"_blank\" rel=\"noreferrer noopener\">8 percent<\/a> of new auto sales last year were EVs, and American automakers such as GM and Ford <a href=\"https:\/\/www.wsj.com\/articles\/ford-electric-vehicles-subsidies-fossil-fuels-5d13079\" target=\"_blank\" rel=\"noreferrer noopener\">are losing money<\/a> on their EV businesses due to a lack of consumer demand. Tesla <a href=\"https:\/\/electrek.co\/2024\/04\/15\/tesla-lays-off-more-than-10-of-its-global-workforce\/\" target=\"_blank\" rel=\"noreferrer noopener\">announced<\/a> that it would lay off more than 10 percent of its global workforce due to steep competition from Chinese EV makers. Biden\u2019s EV mandate only creates artificial market demand that will benefit China the most because even with the U.S. government subsidies, American EVs will cost more than Chinese EVs selling at bargain-basement price. The more the Biden administration pushes America to transition to green energy prematurely, the more China is incentivized to dump its green energy products in the U.S. <\/p>\n<p>Unless the Biden administration takes action, the China Shock 2.0 will cause more harm to the U.S. economy than the last one. <\/p>\n<div class=\"fdrlst__b89e9-f17edb21aac5da846fd4db4df9c361f9 fdrlst__b89e9-after-post-content\" id=\"fdrlst__b89e9-f17edb21aac5da846fd4db4df9c361f9\"><\/div>\n<hr class=\"wp-block-separator\">    \t\t\t\t\t   \t\t\t\t\t\t\t\t\t<\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>China floods global markets with cheap goods to revive its economy, jeopardizing jobs in rival sectors worldwide. President Biden aims to raise U.S. tariffs on Chinese steel and aluminum from 7.5% to 25% to address this concern, prompting a crucial debate on trade policies and economic protection<\/p>\n","protected":false},"author":536,"featured_media":2227929,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2024\/04\/43954818414_1021e9503c_3k-scaled-e1713806571483.jpg","fifu_image_alt":"","footnotes":""},"categories":[546],"tags":[],"class_list":["post-2227928","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-federalist"],"fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2024\/04\/43954818414_1021e9503c_3k-scaled-e1713806571483.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2227928","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/536"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2227928"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2227928\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2227929"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2227928"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2227928"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2227928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}