With the world increasingly in a state of flux, manufacturing & services going to wherever the costs are cheapest, there are endless musical chairs; but change is the only constant. No more, the old ways of life-long loyalty to employers, especially when even companies are goners if they fail to keep-up to the changes. All are in a mad rush to stay relevant, to be counted and to stay employable!
There are obvious tensions in the high-stake game of international trade. Accusations are flying back & forth that some are taking unfair advantage; the most between America & China, with the former running huge unsustainable trade deficits. The latter is blamed for keeping their currency artificially undervalued to get unfair price advantage. But China wants America to set their house in order, otherwise, than by pointing fingers at them!
The world is inter-connected like never before; technology has broken down all barriers, with free flow of people adding to the drift. No country can continue to gain advantage at the cost of others for long, as it would bring down the house eventually. In the case of US/China spat, the trade discord is clearly unsustainable and more-so the huge surplus by way of reserves, though mostly invested back in US treasury bonds, as there are no better or safer investments! So they feed on each other, but the pressure points are clearly visible, increasingly. How they pan-out in the end is anybody’s guess, to get back to equilibrium!
Both the US & China benefit at the moment; US getting goods at the cheapest rates, thus benefiting their consumer & China having their factories humming by supplying to the largest market, by far. The negative for US is loss of manufacturing to China, leading to massive unemployment and for China, worries over their investments! So, both have vested interests over the worrying & unsustainable trends. Also, darker motives are bandied about, with China getting the upper hand, able to buy resources everywhere, with none else having such deep pockets. They also can buy real estates likewise. Just like many in poorer countries working for multinational companies, there could be a new trend where the rest would have no choice but to work for the Chinese behemoths in the making, to supply raw materials & get finished goods in return!
But the payments for goods have to be met eventually; as otherwise, the trillion dollar reserves will just remain on paper! It is in China’s interests, as much as the US’s, to see that the trade is balanced, to get paid. The world is getting too interlinked whereby the tremors in one country will be felt immediately across the globe. Though Greece has a minor share in EU, its debt problems spread its tentacles, shaking economic confidence especially in Europe. Then, who wants to rock the boat when the fall-outs will affect even those who perpetrate the act! The US is the biggest economy and any reverses in their fortunes will shake the foundations of world financial order & trade.
It is in China’s interests to look beyond political fall-outs & cooperate with the US to find solutions to unsustainable trade issues. To import indiscriminately would only worsen environmental issues, but making the switch away from pure consumer goods to game-changing sectors like clean energy, away from oil & coal, will lead to sustainable development & also provide gainful employment in cleaner & safer work places. The beneficial effects on health, both for the workers & end consumers, will benefit all countries that can also be brought into the net. US & China are the most important players in the world & it is time they jointly worked out their issues arising from their trade with each other, than leaving them for each other to solve; even politicizing & scoring points to outwit each other but in the end, getting into a deeper hole jointly & dragging-in others in the bargain!