All in the name of Economics
In the midst of all your pre-prelims mugging, i'm sure you've heard about the recent trading spat between China and the US. If you haven't (shame on you you haven't been reading the papers) then here's an update:
Safety regulations against China-made goods:
- US toy giant Mattel issues two seperate recalls involving over 20million China-made toys it says were coated in lead-laced paint and contained small magnets harmful to children.
- A chain of Dutch bed stores says it will be recalling more than 1300 China-made foam mattressesamid fears that they had been sprayed with toxic insecticide.
-New Zealand launches and investigation into woollen and cotton clothes made in China after scientists find dangerous levels of formaldehyde.
- China-made blankets found to contain high levels of formaldehyde are recalled across Australia and New Zealand.
Safety regulations imposed by China:
- China charges that 24 imported gas turbines made by the US industrial institution General Electric had caused several big accidents.
- China bans the import of 3 types of made by Arnott's Indonesia, a subsidiary of US food giant Campbell Soup, saying biscuits contain levels of aluminium three times beyond the safety threshold.
- China announces that it returned 272 heart pacemakers imported form the US in April after quality tests found problems.
- China's Administration of Quality Supervision, Inspection and Quarantine says it has found pesticides, poisonous weeds, and dirt in soy beans imports from the US. The beans - crushed for oil and used as animal feed - are the biggest single US farm export to China.
(Source: The Straits Times, Aug 27 2007)
Now, in economic terms, what the US has undertaken is known as protectionistic measures. This may be due to a number of resaon, including its increasingly high balance of payment deficit, which indicates that its imports are exceeding its exports. This will be detrimental to it's economy as it will injure its gross domestic product or national income since GDP = NY = C + I + G + (X-M). However, the US cannot afford not to import from China because labour-intensive goods costs much less to produce in China than domestically, due to China's low labour cost. Cutting off imports from China will cause general price levels in the US to suffer a significant inflation. Thus, the US has taken to practice protectionism using strict safety regulations as an excuse to curb imports from China. Now, what China has done, is known as retaliation. This is done to protect her own industries, all in the name of vested ineterest.
In coloquial terms, you beat me i beat you back.
As an economic student, it is my duty to support the WTO's ultimate aim to remove all trade barriers and advocate very strongly the idea of free trade. (Don't laugh i am trying to sound intellectual here.)
Thus, i think that the US and China should kiss and make up.
To all those who have siblings 2-3 years younger, you would start cutting out newspaper articles for them if you care enough about them and their future in the foreboding realm of Economics.
Oh, it's so exciting to know that what we're learning now is actually of some use in the outside world :D
Safety regulations against China-made goods:
- US toy giant Mattel issues two seperate recalls involving over 20million China-made toys it says were coated in lead-laced paint and contained small magnets harmful to children.
- A chain of Dutch bed stores says it will be recalling more than 1300 China-made foam mattressesamid fears that they had been sprayed with toxic insecticide.
-New Zealand launches and investigation into woollen and cotton clothes made in China after scientists find dangerous levels of formaldehyde.
- China-made blankets found to contain high levels of formaldehyde are recalled across Australia and New Zealand.
Safety regulations imposed by China:
- China charges that 24 imported gas turbines made by the US industrial institution General Electric had caused several big accidents.
- China bans the import of 3 types of made by Arnott's Indonesia, a subsidiary of US food giant Campbell Soup, saying biscuits contain levels of aluminium three times beyond the safety threshold.
- China announces that it returned 272 heart pacemakers imported form the US in April after quality tests found problems.
- China's Administration of Quality Supervision, Inspection and Quarantine says it has found pesticides, poisonous weeds, and dirt in soy beans imports from the US. The beans - crushed for oil and used as animal feed - are the biggest single US farm export to China.
(Source: The Straits Times, Aug 27 2007)
Now, in economic terms, what the US has undertaken is known as protectionistic measures. This may be due to a number of resaon, including its increasingly high balance of payment deficit, which indicates that its imports are exceeding its exports. This will be detrimental to it's economy as it will injure its gross domestic product or national income since GDP = NY = C + I + G + (X-M). However, the US cannot afford not to import from China because labour-intensive goods costs much less to produce in China than domestically, due to China's low labour cost. Cutting off imports from China will cause general price levels in the US to suffer a significant inflation. Thus, the US has taken to practice protectionism using strict safety regulations as an excuse to curb imports from China. Now, what China has done, is known as retaliation. This is done to protect her own industries, all in the name of vested ineterest.
In coloquial terms, you beat me i beat you back.
As an economic student, it is my duty to support the WTO's ultimate aim to remove all trade barriers and advocate very strongly the idea of free trade. (Don't laugh i am trying to sound intellectual here.)
Thus, i think that the US and China should kiss and make up.
To all those who have siblings 2-3 years younger, you would start cutting out newspaper articles for them if you care enough about them and their future in the foreboding realm of Economics.
Oh, it's so exciting to know that what we're learning now is actually of some use in the outside world :D
