Truth, not myths should prevail over China-U.S. trade

Updated 2018-04-19 14:15:59 Xinhua

Though repeating a lie creates the illusion of truth, yet myths, unlike the plain truth which is sustained by fact, can't stand the test of time.

Washington has been adept at blaming other countries for its domestic woes and its recent trade offensive against China, to some extent, also falls into this category.

The Trump administration claims that since China joined the World Trade Organization (WTO) in 2001, the United States has lost more than 60,000 factories.

However, a quick fact-check will show that the reality is something else. Statistics indicate that the decline in U.S. manufacturing jobs is more of a domestic issue than due to trade with low-wage economies like China.

According to U.S. economist Philip Levy, irrespective of China's entry into the WTO, the share of manufacturing employment in total U.S. nonfarm payrolls -- the primary indicator used to assess U.S. job creations -- fell about 30 percent every 16 years. The China factor, instead of generating the decline, actually represents slowing of an existing trend.

What's more, in a study on the impact of expanding Chinese imports on jobs, Yale University professor Lorenzo Caliendo said access to low-cost intermediate inputs from China has increased employment in non-manufacturing sectors, including retail, construction and services, to offset the job losses in manufacturing, resulting in a rise in welfare.

A number of sobering facts explains what truly causes job losses.

First, it is not Chinese workers that take away jobs from U.S. workers. U.S. firms are choosing to invest and set up factories in China, where the workforce is skilled and cheaper.

Actually, U.S. investors' foreign investments have risen dramatically since the 1990s, shifting low-value-added, labor-intensive industries to developing countries for low-cost assembly.

Second, U.S. factories don't need as many workers as they used to because robots are increasingly doing the work and the industry is becoming more productive and closer to markets.

In fact, while trade accounted for about 12 percent of the lost U.S. factory jobs, 88 percent of the jobs were taken over by robots and other factors at home.

Moreover, there is no downturn in U.S. manufacturing output. Rather, investment in automation and software has doubled the output per U.S. manufacturing worker over the past two decades.

Last but not the least, the two largest economies in the world are interdependent and more than bilateral trade partners. According to the U.S. Department of Commerce, U.S. exports of goods and services to China supported an estimated 910,000 jobs in 2015 -- 601,000 were supported by goods exports and 309,000 by service exports.

For years, the United States has enjoyed service trade surplus with China. The surplus recorded 38 billion U.S. dollars in 2016, 11.6 percent more than in 2015 and up 908 percent from 2001.

More importantly, when looking at the overall U.S. trade deficit, the proportion of U.S. trade deficit with China is on the decrease year by year. The United States' claim that its trade deficit with China is widening is based on questionable algorithms. No one can deny that the majority of the profits goes into the U.S. pocket.

It's primitive for the U.S. Government to tackle trade disputes by wielding the trade protectionism stick. The drop in U.S. manufacturing employment should not be the only indicator to gauge the balance of benefits from the economic relationship with China, nor should it overshadow the sizable benefits of the trade to the American economy and the potential of fresh trade gains.

Any trade war will affect millions of workers in hundreds of real and varied places, and ultimately produce unexpected ramifications for local communities in the United States.

Targeting China will only divert energy from the real challenge and put the future of the U.S. economy at risk.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58April 20 2019 08:52:16

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16April 20 2019 08:52:16

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18April 20 2019 08:52:16

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

China World Business Sports Showbiz Audio
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
China World Fun Travel Entertainment Sports
Beijing Shanghai Guangzhou
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords