That works in similar ways in both importing and exporting countries where those with a vested interest in trade become more advocates for their own trade interests than for their overall country's or fellow citizens' other interests. However that is only one factor among many that does not guarantee that either importing or exporting countries will have their other interests compromised. All this is also merely theoretical unlike my prior observation.
China's strategy in Korean peninsula
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That works in similar ways in both importing and exporting countries where those with a vested interest in trade become more advocates for their own trade interests than for their overall country's or fellow citizens' other interests. However that is only one factor among many that does not guarantee that either importing or exporting countries will have their other interests compromised. All this is also merely theoretical unlike my prior observation.
Agree, on its own the trade create interest too.
However the end result asset accumulation will be magnitude higher ,and unballanced in the case of trade deficit / surpluss.
If you run trade surpluss for decade(s) in the range of 5% GDP then the accumulated foreign assets will ammount to the 50% of anual GDP.
Means huge potion of the elite wealth will be in the assets of the given foreign country.
Like Russia and the oligarch.
Jura The idiot
General
Hendrik_2000
Lieutenant General
I don't agree with this export benefit a country by providing the masses with work and accumulating capital and expertise for further development of economy
it is well trodden path that many country follow Japan, Korea, Taiwan, Singapore, And Now China
How can China accumulate capital if it is not thru Export basically it exchange sweat for money
Export provide all those another benefit of export is the accumulation of experience dealing with marketing, building of infrastructure to support export like Communication, port, airport,
Export facilitate streamlining of regulation,
Not export does not only enrich few people it is a mean to impart marketing savy, product improvement and development of industry beside of course accumulating of capital
The problem is not with export but the failure of country not to develop further and increase the value added of the export good and at the same time substituting all the part that goes into the export with with domestic component of part
In case of China she did all the above with aplomb. Starting with climbing the ladder of technology instead of export cloth, shoe, pot and pan Now the largest component of Chinese export is electronic, electrical machinery etc
While at the same time she is now substituting the part from imported one into domestically produced part
China has trade balance with most country except with US because of trade restriction China can't buy the good she desire and not because of Chinese manipulation
The country that had deficit with china are US and Hongkong
And china surplus compare to GDP is small
And it is not China's fault but interference of free flow of investment and good in the name of security
Those in the U.S. and Europe who are sounding alarm about Chinese purchases of their companies are obviously ignoring the basic laws of economics. The Chinese are simply recycling their current account surpluses in the form of capital outflows. Remember, the balance of payments has to balance: the sum of current and capital accounts has to be equal to zero.
The Chinese did not steal trillions of dollars in their trade surpluses. They earned them in an international trading system where the United States acquiesced in running systematic half-a-trillion dollars of annual trade deficits.
And NO IT IS NOT THE WEST that provide the investment in China it is mostly overseas Chinese and Asian country that invest the most in china. In fact US make only measly 4% of the cumulative investment in China from 1979-2016
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None of those things would necessarily happen, see Hendrik2000's post above for an example.
This part of your post is misleading. The order of development and investment flowed from the West > Asian countries (Japan and "tigers") > China and value added goods flowed in the opposite direction.
Hendrik_2000
Lieutenant General
Where did you get that? because the table clearly did not said that. Check the table US cumulative investment is only 4%
It the overseas Chinese See Hongkong investment is almost 50% It does not mean the Hongkong people that invest. Many overseas Chinese From SEA use Hongkong shell company to invest in China since investment in China is hot potatoes because their native country will ask why do you invest there when we also need your investment?
The same with Cayman island
Thanks for the first post since a long time that is not related to economy or trade-deficit- is- a-good-thing.
The opposition is quite obvious considering all participating countries of Vancouver meeting are participants of Korean war on the US side. It would be shockingly surprising if China and Russia does not oppose it. But neither does the meeting represent anything, it is 18 out of 193 (60 in 1950). It is a home party for Trump.
Why Outsourcing Won’t Work
Finally, we have for too long chased the illusion that we could induce Russia or China to pull our chestnuts out of the fire when over a decade of their policies shows that they blame Washington more than Pyongyang for this crisis and regard North Korea as an asset to their policy of reducing US power and presence in Asia. They may oppose a North Korea’s nuclear program because it allows Pyongyang to escape their control and conduct an independent policy that could trigger a war. But they have covertly and sometimes overtly abetted its proliferation for years and continue doing so even while supporting sanctions to curb North Korea’s independence.
As this author wrote a decade ago, China has less leverage on North Korea and is less willing to deploy it than Washington continues to believe. This rings even truer today, as Kim Jong Un has failed to build a relationship with Xi Jinping. Moreover, China and Russia have steadily abetted North Korea’s proliferation and its violation of the UN sanctions regime. Nevertheless, the Trump administration continues to press China to exercise its economic leverage over the North and even occasionally threatens to punish Beijing on trade and economic issues if it does not do so. But Beijing regards these unilateral demands by senior US policymakers as an attempt to pressure the Chinese to throw a buffer state under a bus—or as a pretext for starting a crisis that could lead to war.