By Kristina Erickson and Sam Porter

Harder to find products made in the US than in China Harder to find products made in the US than in China China exports a much greater quantity than it imports China exports a much greater quantity than it imports Production moved into China because of low labor costs. Production moved into China because of low labor costs.

In 2003, China’s official GDP was 1.4 trillion dollars In 2003, China’s official GDP was 1.4 trillion dollars Competition for local funds may cause numbers to be underrepresented or downplayed Competition for local funds may cause numbers to be underrepresented or downplayed Underground economy is quite large Underground economy is quite large

China has huge reserves of foreign currency, especially the US dollar China has huge reserves of foreign currency, especially the US dollar China can artificially keep the exchange rate of its currency low China can artificially keep the exchange rate of its currency low Domestic manufactures estimate that they may depress it up to 40% against the US dollar Domestic manufactures estimate that they may depress it up to 40% against the US dollar CIA believes that Chinas GDP is actually around $6.6 trillion CIA believes that Chinas GDP is actually around $6.6 trillion

Since China’s reform, GDP has grown by 9.5% annually Since China’s reform, GDP has grown by 9.5% annually China even experienced good economic growth during the economic downturn China even experienced good economic growth during the economic downturn People’s willingness to embrace ideas and commit to making them happen People’s willingness to embrace ideas and commit to making them happen

In 2003, China attracted $53 billion in foreign investment compared to $40 billion in the US In 2003, China attracted $53 billion in foreign investment compared to $40 billion in the US A 40% increase in exports and imports from companies operating in China in 2003 A 40% increase in exports and imports from companies operating in China in 2003 China is the third largest trading country in the world China is the third largest trading country in the world

China’s exports in wooden furniture increased from $360 million to $1.2 billion China’s exports in wooden furniture increased from $360 million to $1.2 billion This caused one in three workers in the trade in America to lose their jobs This caused one in three workers in the trade in America to lose their jobs Currently China makes 40% of the furniture sold in the US Currently China makes 40% of the furniture sold in the US

Belief in a plan that the Chinese government will drive companies out of business Belief in a plan that the Chinese government will drive companies out of business Work ethic and an entrepreneurial sense that drives many people Work ethic and an entrepreneurial sense that drives many people Entrepreneurs in China see an opportunity and take advantage of it Entrepreneurs in China see an opportunity and take advantage of it

The real problem is not that China makes cheap common goods The real problem is not that China makes cheap common goods So much technology is shared among countries So much technology is shared among countries China has easy access to technology and has the talent to build anything China has easy access to technology and has the talent to build anything

Currently the US still leads in cutting edge technological research funding Currently the US still leads in cutting edge technological research funding -$3.7 billion to finance nanotechnology In consumer research, China has been quickly closing the gap In consumer research, China has been quickly closing the gap -Right behind U.S and Japan on spending Cheap labor and a very large population outmatch the US Cheap labor and a very large population outmatch the US

Massive manufacturing power allows China to effectively set prices. Massive manufacturing power allows China to effectively set prices. This occurs because the world is now very connected and jobs can easily be moved This occurs because the world is now very connected and jobs can easily be moved This allows manufactures to check prices, and China can undersell many domestic firms. This allows manufactures to check prices, and China can undersell many domestic firms.

Demand for raw materials has caused prices to rise Demand for raw materials has caused prices to rise China is purchasing huge amounts of materials China is purchasing huge amounts of materials The U.S becomes more productive with better machines, software, and techniques The U.S becomes more productive with better machines, software, and techniques

50-85% of merchandise comes from abroad 50-85% of merchandise comes from abroad China’s low cost manufacturing allows for huge assembly lines and great economies of scale China’s low cost manufacturing allows for huge assembly lines and great economies of scale Helps suppliers achieve price cuts when they sell in large quantities Helps suppliers achieve price cuts when they sell in large quantities

Theft of technology due to little policing of intellectual property Theft of technology due to little policing of intellectual property Providing expertise, machines and software to China Providing expertise, machines and software to China Helping assemble biggest “illegal” manufacturing complex in the world Helping assemble biggest “illegal” manufacturing complex in the world

Chinese need low priced Yuan to keep export machine going, yet consumers suffer Chinese need low priced Yuan to keep export machine going, yet consumers suffer Americans acquire more goods while Chinese consumers do not want to buy abroad Americans acquire more goods while Chinese consumers do not want to buy abroad China lends America all the money it needs to spend China lends America all the money it needs to spend

Do you think China can continue to be competitive in the future? Do you think China can continue to be competitive in the future? Do you think the United States dependence on China is healthy? Do you think the United States dependence on China is healthy? Do you think this is mutually beneficial or is one side really getting the better deal? Do you think this is mutually beneficial or is one side really getting the better deal?

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