As you probably know, yesterday the American stock market went through a small "bump" as over 400 points dropped in the stock market. Today, things have turned and regained stability, and in any case, I didn't think it was that big of a deal.

What I found somewhat scary was the fact that it was all caused by an econmic problem in CHINA! This similarly happened when the US depression started and it had a world impact. We recovered in less than a day, but France especially was hit hard and most of europe is still counting loses (although not that significant). Should we be concerned that the worlds economy is practically dependent on china? I have always been in favor of weening off the "China express." What does this say about our econoomy?

Link?

And now we get to my own little bit of xenophobia: It's because, while the US worries about the "Islamic invasion", patent law, and Anna Nicole Smith, China is building factories and generating technological expertise at an amazing rate. Meanwhile, the United States is outsourcing most of the actual work involved in doing things (manufacturing stuff, engineering design work, programming) overseas as fast as it can to lower costs, all the while coddling its remaining domestic producers with trade restrictions instead of forcing them to become competitive.

China's economy is growing at more than 10% a year, compared with a United States 3-4%. Also, according to that WSJ article, the Chinese trade surplus is on the order of $120 billion (the article gives a figure of $61 billion for the first 6 months of 2006) and growing, while the United States has been running a trade deficit for the last 10 years.

In laymen's terms, this means that China is making and selling more dollar value of stuff internationally than it buys, while the United States is more of a buyer. China is running a profit; the United States is not. If this continues long enough, China will end up with more money than the US, and correspondingly more influence. (This is a gross simplification.)

Addendum: Here's an interesting article by Pat Buchanan on the subject. While I disagree with his assessment that globalization is a bad thing, he covers a lot of the problem I'm getting at.

Mind you, I don't agree with his solution, which seems to be to try to lock the American economy down tighter. I think that if we do that, the world will simply do without and pass us by. Instead, American industry really needs to become more competitive, which, admittedly, is a little harder to legislate; however, it is the only solution that will keep us afloat in the long term.

This was an interesting topic. I have to disagree here, though, Orbode. I simply do not believe that the rest of the world would simply do without and pass us by. According to the WTO (World Trade Organization), the U.S. is the #1 Importer in the world in EVERY category and #2 in exports. We are also #1 in exports for commercial services. China averages about number three in all categories. The United States still has a very big influence over the World Economy. Hell, we MADE the post-WWII economy. Look at this article. It shows how a weakening dollar will HURT, not encourage, the Euro and Europe. The Euro is only as strong so long as the dollar is. If we were to tighten up our restrictions and not allow job exportations, this would have multiple effects: 1) Thousands if not Millions of Indians and Chinese would lose their jobs as their status, many hired by American companies, became illegal. This would severly harm the economies of the countries they preside in, causing unemployment increases and perhaps a recession within them.
2) THousands of Jobless Americans would be put to work in factories that had to be moved to other countries due to restrictions and Unionism here. This would, at the least, reduce OUR unemployment. However, inflation may follow.
3) PRICE OF COMMODITIES ACROSS THE WORLD WOULD INCREASE. If The US companies making all of the "made in china" goods didn't make them in China, the prices would soar! Workers would be payed more here due to minumum wage, etc. Most "Made in China" commodities are American company-contracted or patented. Countries all around the world, some of whom are even more dependent on China-based goods, would see massive price increases. That does not set up for a good economic future.

Without us, China will NOT grow to a power. If all Americans withdrew their interests from China, their GDP would crumble. They depend on us as much as we depend on them. It's almost symbiotic. We pay their workers who pay their taxes. Without us in China, the value of AMerican-company goods would increase. This would hurt many countries in the world, and be good for big business here.

Haha. I bet Hitler would have disagreed too. You know, uniting everyone under one "Reich" isn't such a bad idea after all. :rolleyes: