Chinese textiles
I have mentioned the hurtful impact of trade restrictions before, but this article from the BBC demonstrates their negative impact perfectly. Workers in the Chinese countryside who have taken it upon themselves to use a skill of their own to lift themselves out of poverty are being stopped by the same people who pretend to want to help.
China is about to become the worlds 4th largest economy, for some reason people see this as a bad thing, they worry about the country becoming too large and powerful. In truth this image is very misleading; in a scale of per capita income China is about 110th. Recently Western politicians decided that too many textile products were coming out of China and so they reinstated trade restrictions. According to socialist economics this should be a good thing, china will be unable to flood our markets with textile goods and so we can manufacture some ourselves, so everyone benefits, right?
Well, in short, no. China is able to produce textile products at a cost much lower than we are able to, when I say cost I mean exactly that, in economic terms, not just dollars. The cost of a service or a product is what we have to use or give up in obtaining it. In the case of textiles the cost is a combination of all of the processes which make up producing the natural and man made threads added to the processes involved in making them into a finished product, including the manpower needed in the process which also includes the opportunity cost of what could have been done with the manpower, machines and natural resources. In the developed world, this cost is very high, as the general level of education is higher; the opportunity cost of using this manpower for unskilled labour is higher, as is the cost of the machinery etc, so China is able to produce cheaper textile goods. This is a good thing for us; it allows us to buy our clothes etc at a much lower price than we would if they were made here meaning that we can spend a higher percentage of our income on other things such as sky TV or a car etc. It also benefits the Chinese as they are able to obtain the real economic benefit of their efforts and so develop their economy. Trade barriers get in the way of this and simply raise prices artificially meaning that we have less income to spend on other things and the Chinese have a harder time building their economy and lifting themselves out of poverty.
In short the ladies in the Chinese countryside are being held in poverty by western governments for no other reason than their fear of a poverty free China. This is certainly not well intentioned despite what they may say.
China is about to become the worlds 4th largest economy, for some reason people see this as a bad thing, they worry about the country becoming too large and powerful. In truth this image is very misleading; in a scale of per capita income China is about 110th. Recently Western politicians decided that too many textile products were coming out of China and so they reinstated trade restrictions. According to socialist economics this should be a good thing, china will be unable to flood our markets with textile goods and so we can manufacture some ourselves, so everyone benefits, right?
Well, in short, no. China is able to produce textile products at a cost much lower than we are able to, when I say cost I mean exactly that, in economic terms, not just dollars. The cost of a service or a product is what we have to use or give up in obtaining it. In the case of textiles the cost is a combination of all of the processes which make up producing the natural and man made threads added to the processes involved in making them into a finished product, including the manpower needed in the process which also includes the opportunity cost of what could have been done with the manpower, machines and natural resources. In the developed world, this cost is very high, as the general level of education is higher; the opportunity cost of using this manpower for unskilled labour is higher, as is the cost of the machinery etc, so China is able to produce cheaper textile goods. This is a good thing for us; it allows us to buy our clothes etc at a much lower price than we would if they were made here meaning that we can spend a higher percentage of our income on other things such as sky TV or a car etc. It also benefits the Chinese as they are able to obtain the real economic benefit of their efforts and so develop their economy. Trade barriers get in the way of this and simply raise prices artificially meaning that we have less income to spend on other things and the Chinese have a harder time building their economy and lifting themselves out of poverty.
In short the ladies in the Chinese countryside are being held in poverty by western governments for no other reason than their fear of a poverty free China. This is certainly not well intentioned despite what they may say.
posted by Dan at 11:46 AM
1 Comments:
wow, you're definitely very patriotic. China is still a communist country who is friends with north korea and wants to take back Taiwan. Their stuff may be cheaper but they are using our money to fund their communist country for negative purposes which will only backfires on the U.S, Europe, and other parts of the world that believes in Freedom of the people. So i strongly disagree with your view.
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