The Tribune Democrat: "China playing Scrooge with United States"

December 11, 2014


The holiday season is busy around my house. We listen to a lot of Christmas music, go to the theater for a movie or two, maybe catch a performance onstage, watch some Christmas specials on TV and visit with friends and family.  

Amidst all this commotion, I nearly overlooked an important event this year. Fortunately, I received a reminder from my friend Bob Hall. Bob is an outspoken advocate for rebuilding the U.S. manufacturing sector.

[by Zachary Hubbard | December 10, 2014 | The Tribune Democrat]

He is also an astute China watcher whom Tribune-Democrat Editor Chip Minemyer once described as a “fresh voice in the political wilderness.”

The reminder was the release of the annual report of the U.S.-China Economic and Security Review Commission 2014. It is a 599-page behemoth. Fortunately the lengthy executive summary has sufficient information to convey the major findings.

I don’t want to dampen the Christmas spirit, but the report paints a grim picture for the United States.

It is divided into three broad areas: U.S.-China economic and trade relations; military and security issues involving China; and China and the world.

The American media’s response thus far has been anemic and focused mainly on China’s growing military power.

However, having been well-schooled by Hall, my attention is focused on the section covering economic and trade relations. Despite my keen interest in U.S. military affairs, I am convinced that if China ever succeeds in totally overshadowing the United States on the global stage, it will accomplish this through economic means, not military force.

In my job as a workforce developer, I see the painful consequences every day of our nation’s weak economy and shrinking manufacturing sector. Scores of experienced American workers with solid work histories and great work ethic continue to lose their jobs due to foreign competition.

The promising reports on the evening news about new jobs are pure political humbug. Yes, a lot of dislocated workers are getting new jobs, but they are earning far less than in previous positions and have fewer or no benefits.

This is becoming the “new normal” for experienced workers.

Most of America’s foreign economic competition comes from China. The Nov. 26 edition of Manufacturing & Technology News (www.manufacturingnews.com) discusses the U.S.-China Commission report in an article by Richard A. McCormack titled, “U.S.-China Commission Describes the Multiple Tactics of a Rogue Nation Whose Policies Have Destroyed the U.S. Economy, and the U.S. Federal Government’s Failed Response.”

Some of the biggest concerns noted by McCormack include China’s continued manipulation of its currency to keep it undervalued, making Chinese goods cheaper in foreign markets; its shutting out of foreign companies; continued investment by the Chinese central government in state-owned enterprises; and the U.S. government’s continued tendency to respond to China’s rogue trade practices through dialogue rather than enforcement of existing trade agreements.

One of the most troublesome problems cited in the report is that, “… the (Chinese) government’s failure to shift the economy toward a more consumption-based growth model maintains China’s overdependence on exports and investment and limits opportunities for U.S. exports to China.”

This is bad news for America’s waning manufacturing sector.

The conclusions in the executive summary contain several assertions suggesting that continued problems lie ahead for Americans. Here are a few examples:

-- Despite U.S. exports to China growing by 6.2 percent, imbalances in the U.S.-China trade relationship increased in the first eight months of 2014 as the trade deficit grew by 4.1 percent. China stalled on liberalizing key sectors in which the United States is competitive globally, such as services.

-- Supported by government stimulus, China sustained economic growth at or near its official target rate of 7.5 percent through the first three quarters of 2014.

-- Chinese foreign direct investment (FDI) flows into the United States grew, while U.S. FDI into China fell as foreign firms faced an increasingly hostile investment climate in China.

n China’s chronic overcapacity, especially in sectors such as steel and solar panels, continued to harm U.S. manufacturing and exports by dumping excess supply into global markets.

-- U.S. employment in some sectors, particularly manufacturing, has dropped substantially as trade with China has increased. Since China joined the World Trade Organization (December 2001) the United States has lost 29 percent of its manufacturing jobs, according to the U.S. Bureau of Labor Statistics, and economists have begun to establish clear correlations between this job loss and the bilateral trading relationship.

-- China’s nontransparent policymaking came under criticism at the World Trade Organization, and China obstructed progress in key trade negotiations, such as the Information Technology Agreement.

What does all of this mean for average Americans?

American manufacturers will increasingly need to cut costs to remain competitive with China. If you have a job in manufacturing, be prepared to accept reduced pay and benefits in exchange for continued employment.

These are easy targets for cost-cutting companies.

It also means the employment situation you find yourself in today isn’t likely to improve drastically anytime soon. What you see is what you get. According to the U.S. Bureau of Labor Statistics, the labor force participation rate in November was at 62.8 percent, a 36 year low.

Labor force participation rate is the percentage of the working-age population that is working or actively seeking employment.

Finally, think about this when you next head for the mall, shop on the Internet or go shopping for a new car: If every American redirected even 10 percent of his or her purchases into American-made manufactured goods, it would create hundreds of thousands of jobs here at home.

Whenever possible, buy American-made goods, even if you have to spend a little more. Money spent on foreign goods reduces American wealth and shrinks our job market, harming us all. 

Money spent on American goods increases American wealth and jobs.

Zachary Hubbard, formerly of Johnstown, is a freelance writer and retired Army officer residing in the Greater Pittsburgh area.


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