Obama Administration Uses Lobbyist Memo to Say Outsourcing Creates Jobs

[Bluebear]

Just before Commerce Secretary Gary Locke went on a high-profile trip to China with 24 business executives to advocate for making it easier to send American jobs overseas, he was quoted in a Bloomberg article making the Orwellian claim that helping these firms expand in China would create more jobs at home. Locke is even using a study prepared by the Business Roundtable, a corporate lobby, that says outsourcing American jobs raises American workers' standard of living.

Locke's trip comes as the steps China is taking to develop its own industry are making it tougher for American companies to do business there on their terms. A recent survey by the Chamber of Commerce showed that 38 percent of all American companies feel unwelcome in China. American CEOs feel this isn't fair and fear that if they are unable to move their operations to China, their profits will suffer.

Among the group of companies going to China is Timken--maker of ball bearings for windmills. In the past Timken had filed trade cases against Japan and China over broken trade laws. Now, with half of Timken's workforce located in Asia to take advantage of cheaper production costs, Timken is now pressing the Chinese government to let them expand their production in China.

Had the United States taken aggressive action, such as tariffs, against China's unfair trade policies, including their lax environmental/labor standards and illegal currency manipulation, companies like Timken would more likely have expanded in America. As United Steelworkers president Leo Gerard said to Bloomberg News, "We would like to see Timken expanding in America and exporting to China." Instead, Chinese companies dominate the wind energy market, making 85 percent of the world's windmills.

http://www.huffingtonpost.com/mike-elk/obama-administration-uses_b_579678.html

[Hannah Bell]

1. Locke's full of it, but the article frames it as China v. US. But half of Chinese

exports are owned by foreign corporations exporting back into their home territories.

The Chinese gov't & the foreign corps are in bed together, and "big bad china" is the cover story.

Same with our "big bad chinese debt".

[Scuba]

2. Can you please expand on this?

I'd like to better understand how our debt to China is tied up with mega-corporations who manufacturer there.

thanks,

Scuba

[Hannah Bell]

3. Take "made in china" electronics:

China's electronic information industry, like much of its economy, is both export-oriented and foreign capital-led.

In 2005, the sales, added value, profits, and exports of foreign firms (including 6,480 firms with 100% foreign capital, merged firms and joint firms) reached 2.4 trillion yuan, 503 billion yuan, 82.2 billion yuan, and US$234 billion, respectively, accounting for 77%, 77%, 77% and 87% of China's total electronic information industry for their respective categories.

These figures are all considerably higher than 2004.

The export surplus of US$44.8 billion produced by 100% foreign capital firms (2,241 firms) accounted for 94% of China's total.

http://en.wikipedia.org/wiki/Electronics_industry_in_China


In other words, most of the electronics we buy in the US labeled "made in china" are ultimately owned by & producing profits for non-chinese capitalists & corporations -- many of them american.


Moreover, U.S. - and other foreign-invested firms in China are responsible for a large fraction of exports from China. In 2002, foreign-, including U.S.-, invested firms in China produced 52.2 percent of all Chinese exports. Likewise, foreign-invested firms in China produced a similar percentage of Chinese exports to the United States. Exports generated by foreign-invested firms have different economic welfare properties: The profits from such exports accrue in part to the foreign owners of those firms, not to the host country.

http://www.hktdc.com/info/mi/a/ef/en/1X005RTY/1/Economic-Forum/United-States-Direct-Investment-In-China.htm

That writer says, "oh, of course this doesn't affect jobs in the us" - but of course, it does. and jobs elsewhere as well. how can it help *but* affect jobs when jobs in entire sectors move?

For example, 80% of the world's sports shoes are produced in china.

http://www.encyclopedia.com/doc/1G1-137492837.html

that means they're not being produced here, as they still were when i was young; or in brazil, one of the areas production moved when it left the US...

one province in china alone makes 30% of the world's shoes:

http://german.china.org.cn/english/BAT/34420.htm



Rough analogy: take detroit.

Detroit factories relocate outside the city, so the city's tax base shrinks -- even though the companies who own the factories are still using & benefiting from the city's infrastructure/services (roads, ports, communications, etc).

But now, with the reduced tax base, city turns around & borrows from these same owners of factories and capital (banks, "investors,") to fund the infrastructure & services.

So the owners not only get lower taxes, they get steady interest payments, a rake-off on any wealth the city still produces -- & slowly, all the wealth in the city is sucked into the maw of the tax evaders -- as more and more people & businesses leave the city to avoid the deteriorating conditions, only the poor remain.

It's the same general scheme, except on an international scale.

ps: rec'd your post, bluebear, but it seems there are more unrec's than i can counter. du is like that.

[Scuba]

4. Thank you, this helps.

[Hannah Bell]

11. welcome. just a general analogy, not a scientific one, a general schema

for the fraud.

basically the same thing as when, say, textiles moved from new england to new york to the american south & southwest, then overseas.

the same "investors" were there at each step, raking in profits on both ends.

[blindpig]

5. Who's in charge?

[HughBeaumont]

6. Up is down. Left is right. We've ALWAYS been at war with Oceania.

Yes, our standard of living is SOOOOO high since Laissez-Fail's been cemented in the American "Profits First" business and economic psyche. :eyes: :eyes:

Chamber of Commerce - What, Do You Think We're Going to ADMIT We're Extreme Republicans?

[unblock]

7. of course outsourcing creates jobs. but the commute is a real bear!

[dgibby]

8. True,

but they failed to say it's not American jobs that are created.

[Bluebear]

10. +

[laughingliberal]

9. The hits just keep on coming. The US war on workers is getting old, now.

And it's shocking to see the Democrats doing this in times such as these.

[treestar]

12. Well it could

I bought a phone made in China and dealt with the salespeople. How could the number of salespeople work if only very rich people could afford the phone?

If you buy home decoration items designed here but manufactured in China, who is to say those designers could have had their designs mass marketed - they might not have had enough capital to pay for a factory in the US.

It's not a zero sum game, and this question needs more education and consideration rather than just the snotty, sarcastic comments that imply that of course the Chinese / Indians / Mexicans / Assorted Brown people have no right to participate in the modern economy. And that every job one of them gets is a disaster for some American. It obviously does not work that way, or we'd be far worse off than we are.