Monday, March 14, 2016

How Trump, Clinton, Sanders, and Others are Wrong On Trade Trends With China...

Rational Nation USA
Purveyor of Truth

Just like on so many other issues Donald J. Trump is wrong on China and trade. In fairness, both Hillary Rodham Clinton and Bernie Sanders are wrong as well. The New Yorker, with links to verifiable data shows us just how wrong they all are.

Not long ago, a video mocking Donald Trump’s obsession with China was posted on YouTube, a mashup splicing together some two hundred and fifty instances in which he has said “China” during his speeches. The context of his remarks on the subject, inexorably, is this: “They’re stealing our jobs; they’re beating us in everything; they’re winning, we’re losing.” These sentiments have struck a chord with many struggling Americans, particularly those in the unemployed and underemployed working class.

The message has resonated so well, in fact, that other Presidential candidates have felt compelled to demonstrate a properly high level of indignation toward China’s economic prowess. Marco Rubio and Hillary Clinton, for instance, have complained about the country’s underhanded trade practices and their impact on American jobs. And then there’s Bernie Sanders, a longtime critic of globalization. “Corporate America said, ‘Why do I want to pay somebody in Michigan a living wage when I can pay slave wages in Mexico or China? We’re going to shut down, we’re going to move abroad, we’re going to bring those products back into this country,’ ” he said at last week’s Democratic debate, in Flint, Michigan. “They’re going to start having to, if I’m President, invest in this country.”

It’s a simple and effective pitch, with a ready set of scapegoats. But despite what the rhetoric would have us believe, global manufacturing is trending in a positive direction for the U.S. Factory jobs are on the rise here, and many of these new jobs are coming back to North America from China, which is struggling to maintain its manufacturing capacity. Since March, 2010, when manufacturing employment in the U.S. hit a trough of 11.45 million jobs, nearly a million new factory positions have been created, most of them in the Southern states, particularly North Carolina, South Carolina, and Tennessee. Better still, the jobs are typically good ones: across that same five-year period, average hourly manufacturing wages have increased over ten per cent, to more than twenty dollars. On the whole, U.S. manufacturing, as measured by the Purchasing Managers’ Index, has steadily expanded.

Meanwhile, according to Quanton Data, which tracks global job postings by industry, open manufacturing positions in China have been dropping consistently since 2012, down nearly six per cent in that time. In January, the country’s Ministry of Commerce reported that factory activity has contracted for six months, falling to a three-year low. In addition, foreign direct investment in Chinese manufacturing was flat for all of 2015, while China’s balance of trade with the U.S. barely budged, despite the strong dollar. Moreover, China’s exports tumbled in February by twenty-five per cent, after falling eleven per cent in January.

The picture that emerges from these statistics is much more nuanced than the one the Presidential candidates are offering: it reveals China to be something less than a rapacious economic winner, and the U.S. to be enjoying an industrial resurgence that seemed unimaginable a decade ago. There are many blue-collar workers who have been left out of this picture, to be certain, but if the candidates truly want to help those people, they should begin by at least acknowledging the recent shifts in global manufacturing and understanding their genesis and impact.

Perhaps the biggest stimulant to American manufacturing is the move toward reshoring. In recent years, companies have increasingly been bringing manufacturing jobs back to the U.S. from China and other countries. The practice received its most public boost in 2012, when General Electric announced plans to invest a billion dollars in an appliance plant in Louisville, Kentucky, reshoring four thousand jobs that had been in China and Mexico, and adding, over time, nearly twenty thousand factory positions at the plant’s regional suppliers. Walmart has also helped to stoke demand for U.S. manufacturing, thanks to an initiative, launched in 2013, to purchase an additional two hundred and fifty billion dollars worth of American-made goods by 2023, which it hopes will create as many as three hundred thousand new jobs.

Economists and manufacturing experts have assembled convincing statistics which demonstrate that these moves were part of a broader trend. According to data provided to me by the Reshoring Initiative, a nonprofit trade organization, in the past five years, about a hundred thousand manufacturing jobs have returned to the U.S. from overseas, sixty per cent of them from China. If you fold in new U.S. plant openings by companies headquartered elsewhere (that is, foreign direct investment in manufacturing), the number jumps to two hundred and fifty thousand. An additional fifty thousand jobs were saved when companies that had planned to go offshore changed their minds.

Continue reading BELOW THE FOLD for the rest of the positive story.


  1. Actually Donald J. Trump is (basically) right on China and trade. In fairness, both Hillary Rodham Clinton and Bernie Sanders are right as well. Although I'm not positive about Donald or Hillary. Either may change their minds if elected.

    As for your article, I'm not buying it. This might be a minor trend, but we've already lost millions of jobs with the possibility of many more to be lost if the TPP is instituted.

  2. You don't have to buy it. Just as I do not have t buy yours.


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