(Long thread warning) I think this is a very good article about Chinese growth, but I would disagree with two important points. First, while the acquisition of foreign technology has certainly contributed to Chinese growth, we may be...
the-american-interest.com/2019/10/22/how… via @aminterest
the-american-interest.com/2019/10/22/how… via @aminterest
@aminterest ...overestimating its economic contribution.
Most recent Chinese growth has consisted of satisfying the huge investment needs from which China suffered after four decades of Maoism, anti-Japanese war, and civil war.
It was mostly basic, low- and medium-tech investment that...
Most recent Chinese growth has consisted of satisfying the huge investment needs from which China suffered after four decades of Maoism, anti-Japanese war, and civil war.
It was mostly basic, low- and medium-tech investment that...
@aminterest ...China needed and that powered Chinese growth, but while Beijing has also invested heavily in advanced foreign technology, the jury is out as to whether this has been or will be a net contributor to economic growth or, as was the case for example with the USSR in the 1960s...
@aminterest ...and 1970s, a net subtractor. Developing countries often invest in high-tech trophies, but it is mainly advanced countries that can exploit high tech economically.
Second, is the idea that offshoring “produced major gains in the receiving nations, but imposed serious losses...
Second, is the idea that offshoring “produced major gains in the receiving nations, but imposed serious losses...
@aminterest ...on the sending nations". Off-shoring is a net problem for trade and employment for the sending nation only if it moves production to a country in which export revenues are recycled back in the form of purchase of assets rather than purchases of goods – whether income, in...
@aminterest ...other words, is “fairly” distributed to workers in ways that boost consumption, and not distributed in ways that boost excess savings above the associated investment.
In the former case, the receiving nation will match its increased exports to the “sending nation” with...
In the former case, the receiving nation will match its increased exports to the “sending nation” with...
@aminterest ...increased imports, so that the jobs the latter loses through offshoring and higher imports it gains from greater exports: presumably more productive jobs. Both will be better off. The problem with China (and with the other surplus nations), as I have often said, is not that...
@aminterest ...American companies moved there, but rather that workers receive such a low share of what they produced that they consume a very low share.
While it is true that off-shoring is directed mainly towards countries in which households are forced to subsidize manufacturing, as...
While it is true that off-shoring is directed mainly towards countries in which households are forced to subsidize manufacturing, as...
@aminterest ...in China, it is important to note that off-shoring itself isn’t the problem. The distribution of income is, and I think the best way for the US to combat this problem is probably not with tariffs on tradable goods but rather with taxes on capital inflows.
