Saturday, October 2, 2010
China manufacturing sector grows
Most of the world believed that China was facing a potential slowdown until the manufacturing sector picked up pace this month. The growth of the manufacturing sector in the Chinese economy is very good for the global market, as consumers find the price of products decreasing tremendously. On the contrary, the undervalued Chinese currency has become a big problem. Trade tensions between the U.S. and China are becoming more prevalent due to this undervalued currency. So the U.S. has to make a decision whether to impose duties on imports from China, which is why the House has just passed a bill aimed in this direction. These factors all create a difficult scenario because of the global economy's reliance on China.
Subscribe to:
Post Comments (Atom)
If the United States where to impose duties on imports from China it would really hinder continuos growth from manufacturing. This would lessen China's competitive advantage stemming from cheap labor which over the longterm could slow the growth of manufacturing in China even possibly grow the manufacturing sector in the United States and lessen the trade imbalance. It will be a very interesting few weeks as issue of China devaluing its currency gains popularity in the political arena.
ReplyDeleteYes I agree. The U.S. does need to impose import duties on imports from China. This is because the US products bought will decrease. The reason for this is because people will obviously buy the cheaper products. If people buy more products from China, the economy in the US will not be as strong if we don't use import duties. But at the same time we can't get china too upset with import duties because the US depends heavily on China.
ReplyDelete