Booming trade, not barriers, creates a win-win situation
US presidential hopeful Donald Trump has won many fans with his repeated tirades against global trade. His message is anything but original and his arguments are old hat.
But, his anti-trade stance has struck a chord with many Americans who believe that increases in imports, especially from the Chinese mainland, are killing off many good paying manufacturing jobs, resulting in static income and a widening wealth gap.
Their discontent has been fortified by the publication earlier this year of an academic paper which claimed that the surge in imports from China between 1999 and 2011 had wiped out some 2.4 million jobs in the US, including about 1 million in the manufacturing sector. That estimate indicates that the impact of globalization on the US job market may be larger than previously thought.
The issue matters much to Hong Kong because of its status as a regional hub for international trade and finance.
Globalization was largely the brainchild of the liberal intellectual elites who are seen to have dominated the US political landscape in past decades. They envisaged that raising the standard of living in under-developed countries could help ensure world peace, while greater prosperity of the people in those countries could lead to rising demand for high value-added products from the developed economies.
Subsequent developments on a global scale have proven the value of that vision. A rough estimate has it that total foreign demand may have led to the creation of up to 70 million jobs on the Chinese mainland in the five years after it joined the World Trade Organization, according to a New York Times report.
Meanwhile, a rapidly growing property market on the Chinese mainland has led to stronger demand for imports, including cars and a wide variety of US electronic consumer products. The Chinese mainland is now the second-largest market for iPhones and other Apple products after the US. GM and Ford sell thousands of cars each year in China and the demand for Boeing planes by mainland carriers is on the rise.
US workers’ concerns about job losses are understandable. But erecting barriers against the flow of international trade is not the way to go.
A rapidly growing property market on the Chinese mainland has led to stronger demand for imports, including cars and a wide variety of US electronic consumer products, spelling huge opportunities for Sino-US trade, experts say.