The Business of China

One of the prevalent dichotomies of our current society seems to be our hypocritical relationship with  China and in the past few weeks, in the aftermath of the debt-limit debacle and credit rating crisis,  someone should highlight the true weirdness of our relationship with the largest remaining communist country.

In the wake of the market upheaval, there were at least two major public rebukes from China about America's debt, one of which was directed to the Vice President.  Let's ignore for a second how America's largest note-holder, China, rebuking us while holding almost a quarter of our foreign debt, is a bit like shooting the golden goose.  You notice they didn't offer to forego debt service in our time of troubles, as a way to help us get through the crisis.  Let's ignore for a second China's repellant human rights record.  And while we're at it, let's just totally ignore the whole communist/totalitarian ideology.

That sounds like a whole lot of willful ignorance to me.  Why do we do it?  Because we import more from China than from any other country in the world.  They buy very little from us; the trade balance is tipped so far in their favor it's ridiculous if you stop and think about it.  What's really funny though, is that they're essentially loaning us money to buy products from them, then collecting interest on the loan, then publicly rebuking us for borrowing money.  And we, as a country say, thank you, sir, may we have another?

Why?  Because the stuff's cheap, and we don't care where it came from.  We'll look the other way on all the issues I mentioned above, just so we can pad our dens with stuff we don't need.

This hydra-headed approach to life is not particularly new to Americans, though.  The very same people who lionize the greatest generation and their efforts during WWII, never see it as ironic that they hustle on down to the Wal-Mart to buy lots of cheaply-made products from a totalitarian regime that undercuts American industry via its industrial practices.  While at the Wal-Mart, they also lament the fact of the disappearance of "main street America", ignoring the fact that their shopping habit is what actually killed the main street.

What is most remarkable about China rebuking us, though, is that they would be economically up shit creek if we took a pause from our delight with their exports.  In 2010, we imported approximately 365 Billion dollars worth of "stuff" from China.  Hmm, that looks a lot like a billion dollars a day we buy from them.  Imagine if you went five days without buying anything from China (granted, it would be hard to do), that's 5 billion dollars.  People would notice that.  Policies could change.

Maybe we wouldn't have to look the other way quite so much.