Trump 45% tariff on China goods is complete Bluff as he targets only hightech - Page 2 - Chinese Economy - Chinadaily Forum
Author: tenderloin

Trump 45% tariff on China goods is complete Bluff as he targets only hightech [Copy link] 中文

Rank: 5Rank: 5

Post time 2018-1-25 19:01:52 |Display all floors
sfphoto Post time: 2018-1-24 15:48
Nike closed its last Chinese factory in 2010.

other US brands like Apple ?
Round Up is good for developing the mind

Use magic tools Report

Rank: 6Rank: 6

Post time 2018-1-26 05:41:08 |Display all floors
Motika Post time: 2018-1-25 19:01
other US brands like Apple ?

Apple doesn’t own any factories because they outsource all their manufacturing to third-parties.

Use magic tools Report

Rank: 5Rank: 5

Post time 2018-1-26 10:11:06 |Display all floors
sfphoto Post time: 2018-1-25 22:41
Apple doesn’t own any factories because they outsource all their manufacturing to third-parties.

Still they earn the money from making it abroad.
Round Up is good for developing the mind

Use magic tools Report

Rank: 6Rank: 6

Post time 2018-1-28 10:59:22 |Display all floors
This post was edited by sfphoto at 2018-1-28 21:18
Motika Post time: 2018-1-26 10:11
Still they earn the money from making it abroad.

Correct. Apple outsources its manufacturing abroad so it can sell its iPhones all over the world without paying taxes either to the USA or to any foreign country. Here’s how their tax loophole works:
D42AFEEC-0583-492A-97FE-E1A2B868AD75.jpeg


Apple outsources the manufacturing of its iPhones to China with Apple Sales International (ASI) getting the title to the goods which are then sold all over the world. All the profits are reported to ASI which is based in Ireland where Apple pays almost zero taxes because almost all the profits are booked to an offshore entity. ASI then remits payments to Apple Inc (USA) where its global HQ and R&D is located.

That’s the beauty of globalization: Capitalists reap all the profits but pay no taxes.

Use magic tools Report

Rank: 5Rank: 5

Post time 2018-1-29 08:54:12 |Display all floors
sfphoto Post time: 2018-1-28 03:59
Correct. Apple outsources its manufacturing abroad so it can sell its iPhones all over the world wi ...

Yeah how far between that and a collapse ? But the would have to learn the hard way Good pay check happy buyers
Round Up is good for developing the mind

Use magic tools Report

Rank: 2

Post time 2018-3-13 10:06:26 |Display all floors
Protecting the global poor
Almost all rich countries got wealthy by protecting infant industries and limiting foreign investment. But these countries are now denying poor ones the same chance to grow by forcing free-trade rules on them before they are strong enough
Ha Joon-Chang / July 28, 2007

Once upon a time, the leading car-maker of a developing country exported its first passenger cars to the US. Until then, the company had only made poor copies of cars made by richer countries. The car was just a cheap subcompact (“four wheels and an ashtray”) but it was a big moment for the country and its exporters felt proud.

Unfortunately, the car failed. Most people thought it looked lousy, and were reluctant to spend serious money on a family car that came from a place where only second-rate products were made. The car had to be withdrawn from the US. This disaster led to a major debate among the country’s citizens. Many argued that the company should have stuck to its original business of making simple textile machinery. After all, the country’s biggest export item was silk. If the company could not make decent cars after 25 years of trying, there was no future for it. The government had given the car-maker every chance. It had ensured high profits for it through high tariffs and tough controls on foreign investment. Less than ten years earlier, it had even given public money to save the company from bankruptcy. So, the critics argued, foreign cars should now be let in freely and foreign car-makers, who had been kicked out 20 years before, allowed back again. Others disagreed. They argued that no country had ever got anywhere without developing “serious” industries like car production. They just needed more time.

The year was 1958 and the country was Japan. The company was Toyota, and the car was called the Toyopet. Toyota started out as a manufacturer of textile machinery and moved into car production in 1933. The Japanese government kicked out General Motors and Ford in 1939, and bailed out Toyota with money from the central bank in 1949. Today, Japanese cars are considered as “natural” as Scottish salmon or French wine, but less than 50 years ago, most people, including many Japanese, thought the Japanese car industry simply should not exist.

Half a century after the Toyopet debacle, Toyota’s luxury brand Lexus has become an icon of globalisation, thanks to the American journalist Thomas Friedman’s book The Lexus and the Olive Tree. The book owes its title to an epiphany that Friedman had in Japan in 1992. He had paid a visit to a Lexus factory, which deeply impressed him. On the bullet train back to Tokyo, he read yet another newspaper article about the troubles in the middle east, where he had been a correspondent. Then it hit him. He realised that “half the world seemed to be… intent on building a better Lexus, dedicated to modernising, streamlining and privatising their economies in order to thrive in the system of globalisation. And half of the world—sometimes half the same country, sometimes half the same person—was still caught up in the fight over who owns which olive tree.”

According to Friedman, countries in the olive-tree world will not be able to join the Lexus world unless they fit themselves into a particular set of economic policies he calls “the golden straitjacket.” In describing the golden straitjacket, Friedman pretty much sums up today’s neoliberal orthodoxy: countries should privatise state-owned enterprises, maintain low inflation, reduce the size of government, balance the budget, liberalise trade, deregulate foreign investment and capital markets, make the currency convertible, reduce corruption and privatise pensions. The golden straitjacket, Friedman argues, is the only clothing suitable for the harsh but exhilarating game of globalisation.

However, had the Japanese government followed the free-trade economists back in the early 1960s, there would have been no Lexus. Toyota today would at best be a junior partner to a western car manufacturer and Japan would have remained the third-rate industrial power it was in the 1960s—on the same level as Chile, Argentina and South Africa.

Had it just been Japan that became rich through the heretical policies of protection, subsidies and the restriction of foreign investment, the free-market champions might be able to dismiss it as the exception that proves the rule. But Japan is no exception. Practically all of today’s developed countries, including Britain and the US, the supposed homes of the free market and free trade, have become rich on the basis of policy recipes that contradict today’s orthodoxy.

In 1721, Robert Walpole, the first British prime minister, launched an industrial programme that protected and nurtured British manufacturers against superior competitors in the Low Countries, then the centre of European manufacturing. Walpole declared that “nothing so much contributes to promote the public wellbeing as the exportation of manufactured goods and the importation of foreign raw material.” Between Walpole’s time and the 1840s, when Britain started to reduce its tariffs (although it did not move to free trade until the 1860s), Britain’s average industrial tariff rate was in the region of 40-50 per cent, compared with 20 per cent and 10 per cent in France and Germany respectively.

The US followed the British example. In fact, the first systematic argument that new industries in relatively backward economies need protection before they can compete with their foreign rivals—known as the “infant industry” argument—was developed by the first US treasury secretary, Alexander Hamilton. In 1789, Hamilton proposed a series of measures to achieve the industrialisation of his country, including protective tariffs, subsidies, import liberalisation of industrial inputs (so it wasn’t blanket protection for everything), patents for inventions and the development of the banking system.

Hamilton was perfectly aware of the potential pitfalls of infant industry protection, and cautioned against taking these policies too far. He knew that just as some parents are overprotective, governments can cosset infant industries too much. And in the way that some children manipulate their parents into supporting them beyond childhood, there are industries that prolong government protection through clever lobbying. But the existence of dysfunctional families is hardly an argument against parenting itself. Likewise, the examples of bad protectionism merely tell us that the policy needs to be used wisely.

In recommending an infant industry programme for his young country, Hamilton, an impudent 35-year-old finance minister with only a liberal arts degree from a then second-rate college (King’s College of New York, now Columbia University) was openly ignoring the advice of the world’s most famous economist, Adam Smith. Like most European economists at the time, Smith advised the Americans not to develop manufacturing. He argued that any attempt to “stop the importation of European manufactures” would “obstruct… the progress of their country towards real wealth and greatness.”

Many Americans—notably Thomas Jefferson, secretary of state at the time and Hamilton’s arch-enemy—disagreed with Hamilton. They argued that it was better to import high-quality manufactured products from Europe with the proceeds that the country earned from agricultural exports than to try to produce second-rate manufactured goods. As a result, congress only half-heartedly accepted Hamilton’s recommendations—raising the average tariff rate from 5 per cent to 12.5 per cent.
In 1804, Hamilton was killed in a duel by the then vice-president Aaron Burr. Had he lived for another decade or so, he would have seen his programme adopted in full. Following the Anglo-American war in 1812, the US started shifting to a protectionist policy; by the 1820s, its average industrial tariff had risen to 40 per cent. By the 1830s, America’s average industrial tariff rate was the highest in the world and, except for a few brief periods, remained so until the second world war, at which point its manufacturing supremacy was absolute.



Use magic tools Report

Rank: 2

Post time 2018-3-13 10:07:04 |Display all floors
2

Britain and the US were not the only practitioners of infant industry protection. Virtually all of today’s rich countries used policy measures to protect and nurture their infant industries. Even when the overall level of protection was relatively low, some strategic sectors could get very high protection. For example, in the late 19th and early 20th centuries, Germany, while maintaining a relatively moderate average industrial tariff rate (5-15 per cent), accorded strong protection to industries like iron and steel. During the same period, Sweden provided high protection to its emerging engineering industries, although its average tariff rate was 15-20 per cent. In the first half of the 20th century, Belgium maintained moderate levels of overall protection but heavily protected key textile sectors and the iron industry.


Tariffs were not the only tool of trade policy used by rich countries. When deemed necessary for the protection of infant industries, they banned imports or imposed import quotas. They also gave export subsidies—sometimes to all exports (Japan and Korea) but often to specific items (in the 18th century, Britain gave export subsidies to gunpowder, sailcloth, refined sugar and silk). Some of them also gave a rebate on the tariffs paid on the imported industrial inputs used for manufacturing export goods, in order to encourage such exports. Many believe that this measure was invented in Japan in the 1950s, but it was in fact invented in Britain in the 17th century.


It is not just in the realm of trade that the historical records of today’s rich countries burst the bindings of Friedman’s golden straitjacket. The history of controls on foreign investment tells a similar story. In the 19th century, the US placed restrictions on foreign investment in banking, shipping, mining and logging. The restrictions were particularly severe in banking; throughout the 19th century, non-resident shareholders could not even vote in a shareholders’ meeting and only American citizens could become directors in a national (as opposed to state) bank.


Some countries went further than the US. Japan closed off most industries to foreign investment and imposed 49 per cent ownership ceilings on the others until the 1970s. Korea basically followed this model until it was forced to liberalise after the 1997 financial crisis. Between the 1930s and the 1980s, Finland officially classified all firms with more than 20 per cent foreign ownership as “dangerous enterprises.” It was not that these countries were against foreign companies per se—after all, Korea actively courted foreign investment in export processing zones. They restricted foreign investors because they believed—rightly in my view—that there is nothing like learning how to do something yourself, even if it takes more time and effort.


The wealthy nations of today may support the privatisation of state-owned enterprises in developing countries, but many of them built their industries through state ownership. At the beginning of their industrialisation, Germany and Japan set up state-owned enterprises in key industries—textiles, steel and shipbuilding. In France, the reader may be surprised to learn that many household names—like Renault (cars), Alcatel (telecoms equipment), Thomson (electronics) and Elf Aquitaine (oil and gas)—have been state-owned enterprises. Finland, Austria and Norway also developed their industries through extensive state ownership after the second world war. Taiwan has achieved its economic “miracle” with a state sector more than one-and-a-half times the size of the international average, while Singapore’s state sector is one of the largest in the world, and includes world-class companies like Singapore Airlines.


Of course, there were exceptions. The Netherlands and pre-first world war Switzerland did not adopt many tariffs or subsidies. But they did deviate from today’s free-market orthodoxy in another, very important way—they refused to protect patents. Switzerland did not have patents until 1888 and did not protect chemical inventions until 1907. The Netherlands abolished its 1817 patent law in 1869, on the grounds that patents created artificial monopolies that went against the principle of free competition. It did not reintroduce a patent law until 1912, by which time Philips was firmly established as a leading producer of lightbulbs, whose production technology it “borrowed” from Thomas Edison.


Even countries that did have patent laws were lax about protecting intellectual property (IP) rights—especially those of foreigners. In most countries, including Britain, Austria, France and the US, patenting of imported inventions was explicitly allowed in the 19th century.


Despite this history of protection, subsidy and state ownership, the rich countries have been recommending to, or even forcing upon, developing countries policies that go directly against their own historical experience. For the past 25 years, rich countries have imposed trade liberalisation on many developing countries through IMF and World Bank loan conditions, as well as the conditions attached to their direct aid. The World Trade Organisation (WTO) does allow some tariff protection, especially for the poorest developing countries, but most developing countries have had to significantly reduce tariffs and other trade restrictions. Most subsidies have been banned by the WTO—except, of course, the ones that rich countries still use, such as on agriculture, and research and development. And while, of course, no poor country is obliged to accept foreign inward investment (and most receive none or very little) the IMF and the World Bank are always lobbying for more liberal foreign investment rules. The WTO has also tightened IP laws, asking all but the poorest developing countries to comply with US standards—which even many Americans consider excessive.


Why are they doing this? In 1841, Friedrich List, a German economist, criticised Britain for preaching free trade to other countries when she had achieved her economic supremacy through tariffs and subsidies. He accused the British of “kicking away the ladder” that they had climbed to reach the world’s top economic position.


Today, there are certainly some people in rich countries who preach free trade to poor countries in order to capture larger shares of the latter’s markets and to pre-empt the emergence of possible competitors. They are saying, “Do as we say, not as we did,” and act as bad samaritans, taking advantage of others in trouble. But what is more worrying is that many of today’s free traders do not realise that they are hurting the developing countries with their policies. History is written by the victors, and it is human nature to reinterpret the past from the point of view of the present. As a result, the rich countries have gradually, if often sub-consciously, rewritten their own histories to make them more consistent with how they see themselves today, rather than as they really were.


Use magic tools Report

You can't reply post until you log in Log in | register

BACK TO THE TOP
Contact us:Tel: (86)010-84883548, Email: blog@chinadaily.com.cn
Blog announcement:| We reserve the right, and you authorize us, to use content, including words, photos and videos, which you provide to our blog
platform, for non-profit purposes on China Daily media, comprising newspaper, website, iPad and other social media accounts.