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China Business » Information » Trade Inequality Between China and the Western World Trade Inequality Between China and the Western WorldEveryone has noticed China and her recent successes in becoming the world's most diligent manufacturer of necessary goods. For the last several years, China has moved from the position of a sleeping giant to the position of a moving giant. The very large Chinese population is willing to work at quite low wages to produce every conceivable commodity that the world is willing to buy. It seems that China has entered an open door to manufacturing leadership.Since the door is open, one would expect China to not only sell products to the rest of the world but also to buy products from other countries. The Chinese do buy other countries' products. However, there are significant inequities between the amount that China sells and the amount that China buys.  By becoming one of the world's largest outsourcing nations, China's manufacturers have access to the plans, ideas and methods of the companies for whom they are producing goods. They are exposed to opportunities to copy these plans, ideas and methods and to make competing products for themselves. Since they make the products themselves, why should they bother to buy products from overseas? Instead, while doing outsourcing for western companies they are also copying the products and becoming competitors to the companies for whom they are outsourcing. China's economic success amazes the world. Her economy has doubled almost three times in the last thirty years. This rapid growth is unprecedented and instills fear in some who are watching China's economic boom. When outsourcing began in China, the Chinese government welcomed the opportunity to improve the conditions of its populace. The government is working on policies to improve technology to encourage manufacturing within China's borders. Capitalism has become a strong drive in the country. Because China is able to produce most of the commodities that its citizens need, it does not need to import many of them. The manufacturing plans of most of the world are found within the factories which have been outsourcing for the western countries. China does not need importation as much as it needs exportation. Thus, the trade imbalance between China and western countries is quite high and in favour of China. Many of the industries of the world have been taken over by Chinese manufacturers. Although China's silk trade suffered in the past because of poor quality, the Italian fine silk trade has been replaced by Chinese fine silk trade. The furniture production in the United States has been replaced by Chinese furniture. Chinese television production is damaging the Japanese TV industry. Despite the negatives mentioned, consider how many of the world's favourite brand names are Chinese. They have few branded products that the rest of the world seeks. European and American brand name products are sought after by most of the world while few people can even remember any of the Chinese brand names. When discussing inequality, one needs to consider other things besides trade between countries. There is an even greater inequality between the western world and China. That is the wage inequality which equates to a spendable income inequality between western workers and Chinese workers. Doubtless, the world notices the trade imbalance between the west and China. It will not be tolerated for long. China will be forced to buy more goods to import or fewer Chinese goods will be bought by the rest of the world. Written on: 26th September 2007 Written by: R. Harris |
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