Sunday, August 25, 2019

China trade imbalace

In 2018 the United States imported $540 billion in goods from China while sending only $120 billion to China. China uses much of the tax they place on these imports to purchase US bonds. As the US replaces China purchases with products from other countries including the US the trade imbalance will narrow. In addition if a US company wants to operate in China they must share half of all profits with China. No such agreements are required when Chinese companies operate in the US. Furthermore if a new product is developed here in the US it is copied in China and sold at a discount. The cost of research on new products is avoided by China since they do not honor US patents and just produce cheap knock offs and some not so cheap so they are hard to discern from the real product.

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