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chinaascendingThe NY Times reports that Asia’s Recovery Highlight’s China’s Ascendance. This is something I predicted when US and China’s stimulus packages were introduced, and the statistics are coming out now. Though the US economy is still three times the size of China’s, it is China and the rest of Asia that is leading the world out of the global recession.

One question mark remains about China’s recovery, and that is whether Chinese consumers can make-up for the lost demand in exports to the US and Europe. One positive sign,  Chinese banks lent a record 1.1 trillion dollars in the first half of 2009. Another positive sign, US and European companies still find China a more affordable production location, and worker training has improved. As long as trade barriers do not become too popular, I think China will continue to lead the world out of recession.

Do you agree?

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  1. • Manufacturing should stop being viewed as global competition. Instead, it should be viewed as global sharing.
    Every country should have 2 specific lists. One for manufactured at home consumer goods and one for imported consumer goods.
    These 2 lists should contain different products so those made at home NEVER compete with the imported goods for sales.
    Every country could have different ideas about what to make at home and what to import.
    Since every country would be manufacturing goods, there are plenty of goods available to export to other countries who want to have those specific goods imported.
    Decent paying manufacturing jobs would be quickly available worldwide, imports and exports would increase worldwide.
    More expensive green technology could be used to build manufacturing plants as the consumer goods produced will NEVER compete with imports for sales until they are exported.
    The competition we see today for who can manufacture the cheapest product would evaporate.
    Instead, the newly employed consumer may want to look for the best quality product to purchase.
    All this takes is a change in policy to achieve.
    This is a simple solution that doesn’t send us and future generations further into debt.
    This can quickly solve the unemployment problem and soon thereafter, the housing crisis and credit crunch.
    We have a wonderful global manufacturing machine at our fingertips.
    So far, we have only used some of the parts (i.e. countries) and now we are wondering why the machine won’t run.

    • Maxine, I believe global competition has been responsible for great amounts of innovation, more affordable goods, and–globally–big increases in employment and income. Eventually, it leads to employment everywhere, but not always in the traditional industries we best relate to. The global recession did not happen because of competition, except perhaps in the banking sector, where banks may have felt pressured to make loans to people who really did not qualify. I live in China, and I watch the still expanding economy grow around me, largely because the government here has embraced the challenge of both local and global competition. The politicians of some more developed countries are too endebted to big business to give real competition a chance.

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