Economy/Resources - 125. page

People’s Daily recently published an analysis article evaluating whether there is a chance that manufacturers in China can be attracted to the United States, which is a critical cornerstone of Trump’s strategy. However, capital always seeks low-cost, high-profit destinations. The most profitable industry for the U.S. is the financial industry instead of manufacturing. The last three projects Trump had before he won the presidency resulted in U.S. manufacturers losing at least US$350 million to low-cost Chinese products. Trump’s campaign T-Shirts were made in China and Honduras. Robots can help, but that won’t add more jobs. The U.S. may be able to improve on the high-end manufacturing as a high-tech power, but that won’t significantly improve employment. The article also identified the lack of blue collar labor resources in the U.S. population as a major problem to re-establish manufacturing on a large scale. Manufactures are more likely to move to India, Vietnam, Myanmar, or Cambodia instead of the U.S. Another immediate obstacle the U.S. will face is that the United States no longer has the full supply chain from the natural resource to supporting parts suppliers. The author concluded that Trump was just bragging – the best case is that he could move manufacturers out of China, but not into the U.S.

Source: People’s Daily, December 31, 2016
http://original.hubpd.com/c/2016-12-31/552491.shtml

Immediately after the U.S. Federal Reserve announced the interest rate increase, Xinhua published a series of six commentaries on the matter. The commentaries generally indicated that the Fed’s interest rate hike will trigger major global financial market adjustments. Xinhua pointed out that the U.S. economy holds a 22 percent weight in the global economy and the U.S dollar is used in 60 to 80 percent of the global trade. Thus, the United States has been benefiting a lot from the dollar’s reserve currency position. The U.S. should not forget where those extra profits came from. One of the commentaries suggested that some countries, especially some emerging economies, may suffer financial turmoil due to their high debt ratio. Xinhua also questioned whether the U.S. economy is capable of sustaining the rapid future interest rate increase plan that the Fed laid out. Some commentaries concluded that the projected increases next year may “disrupt global markets.” The Chinese stock, bond, and foreign exchange markets all suffered significant declines after the Fed’s announcement.

The Xinhua commentaries (December 15, 2016):

The Global Economy Should Be Concerned about the Risks from the Pace of the Fed’s Rate Hikes
http://news.xinhuanet.com/finance/2016-12/15/c_1120126522.htm

The U.S. Should Bear Its Global Responsibilities as the World’s Primary Reserve Currency Issuer
http://news.xinhuanet.com/fortune/2016-12/15/c_1120126610.htm

The RMB Exchange Rate Has Its Own Rhythm to Maintain Long-term Stability
http://news.xinhuanet.com/fortune/2016-12/15/c_1120126810.htm#cj_test

Will the U.S. Fed Rate Hike Affect the Chinese People’s Pocketbook?
http://news.xinhuanet.com/finance/2016-12/15/c_1120126634.htm

We Need to Take Good Care of Ourselves with or without A U.S. Interest Rate Hike
http://news.xinhuanet.com/comments/2016-12/15/c_1120126798.htm

China’s Macroeconomic Policy Needs to Balance among Multiple Objectives after the U.S. Interest Rate Hike
http://news.xinhuanet.com/finance/2016-12/15/c_1120126859.htm