Here’s an interesting article that raises the issue of China manipulating it’s currency to keep it artificially low against the US dollar. http://yhoo.it/qnGI4r
Who benefits from this favorable exchange rate? US Corporations. When we talk about the loss of jobs in America, who made the decision to source goods offshore and caused the loss of those jobs? US Corporations.
This process has been going on for years. US corporations are constantly searching for ways to lower unit labor costs and thereby increase profits. We’ve seen jobs from one industry after another being “off-shored.” The shoe industry, the garment industry, electronics (TV’s, radios, audio equipment, computers) have all been off-shored over the years. NAFTA created incentives for companies to send jobs from the U.S.A. to Mexico. The U.S. government undertakes trade policy decisions that benefit large U.S.-based corporations and neglects the long term structural effects on the American economy. The American people benefit by having access to lower cost consumer goods and that appears to keep the general population happy (and pacified). Most Americans are not concerned about the loss of jobs, as long as it doesn’t affect them.
It’s interesting that as workers in China pursue improved pay and benefits, that we have US and European corporations, trade associations and lobbying groups, opposing any efforts by the Chinese government to improve wages, benefits, and labor conditions for Chinese workers. http://bit.ly/ngkgDE
So we have the U.S. Congress trying to legislate how the Chinese manage their currency and we have U.S. Corporations and business associations trying to tell the Chinese government how to manage their labor policies. With all this advice, how can the Chinese not be successful. Yikes!
The American people have got to speak up, write to their elected officials, insist on more action from Congress to improve U.S. corporate investment in the U.S.A. This will create jobs and make our economy more resilient. It will also reduce our trade deficit and may actually created a favorable trade surplus.