The United States and China are involved in a trade war, the outcome of which will determine who gets America's remaining manufacturing industries and research and development centers. The Chinese are actively fighting; President Obama is actively talking.
The Chinese government fired a huge broadside in December when it issued new rules requiring that American corporations doing business in China move their research and development centers and patents to China as a condition for selling goods and services to the Chinese government.
Nineteen trade groups that represent America's largest corporations responded with a January 29 letter to several U.S. government officials. Here is a selection:
I've read that article. The grim picture you've painted is a serious warning. It would be a disaster to allow the US economy to atrophy into nothing more than scrapyards, agriculture and services.
The British economy has already been degraded to that state.
But one issue that you, sadly, seldom raise, is the issue of product quality. Unfortunately, Western countries impose no genuine product quality standards on Chinese imports, and the result is that they import huge quantitites of junk that should be barred from these countries. For example, my father recently ordered a computer element from China (because it's cheap), but when the element arrived, it quickly broke down and, if not disconnected from the grid, would've caused a fire to our home. Why did it break down? Because it's of abysmally low quality, made from cheap, undurable materials.
So the Congress should immediately institute universal, strict, unwaverable quality standards for all imported products.
Response to this comment by Howard Richman, 2/26/2010: That's a great idea! Indeed upholding standards could be a good way to keep out poor quality products from China. One of my students lived in Shanghai and gave me her take on why so many Chinese products are poor quality. She said that the Chinese capitalists don't expect to be in business for long, so they don't try to get a reputation for quality.
[An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]
Journal of Economic Literature:
[Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....
Atlantic Economic Journal:
In Trading Away Our Future Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]