5/23/2019

Fallacies and lies of American trade deficit with China - Trade deficit with China is good for Americans

Note: With the rogue Evil Empire creating troubles all over the world, threatening invasion of countries and starting trade wars with China and its western allies, there are just so many things to write about how the Evil Empire is destabilising the world and raising tension in the guise of protecting their national interest at the expense of the rest of the world. The scourge of the world must be identified and put on the pedestal for the world to know. The Evil Empire is the Evil Empire. Period.



The Americans are using their trade deficits with China as a tool to give the impression that it if unfair for China to have trade surpluses against the Americans and it is a bad thing, Americans losing and China gaining in trade between the two countries. This is no good and the Americans want the trade to be balance or better the deficit be on the Chinese side, ie, China buys more from the USA and sell less. Just looking at these numbers without looking the bigger it is easy to believe that the Americans have a genuine grievance against the Chinese. If one would to consider the bigger picture and other factors, the trade deficit is actually beneficial to the Americans for if they are not going to buy from China, their overall trade deficit could be even bigger and more unbearable.

Consider this, both countries buy or import based on needs and export based on how much they could sell, the more the merrier. Imports or what they buy have a limit, depending on demands and consumption of their people. For example, if the Americans need x items, they would only buy x items either from China or elsewhere. They would not buy more than x unless they are buying for storage, for the future. This applies to China as well.

So, if the Americans are buying x items from China at $a, the alternative is to buy x items from other sources at $b. The Americans are buying from China because the items are cheaper, value for money. If not they would be buying from other countries, maybe Europe, Australia, Japan etc etc.  The Americans would not be buying from China if they could buy the same items cheaper elsewhere.

Thus, if they refused to buy from China, like what they did now with higher tariffs, they would have to pay more $a + $c. They could cut down their trade deficit with China, but ended up paying a lot more buying from other sources. The net impact is a bigger overall trade deficit for the US. China is actually doing the Americans a big favour by selling them cheaper items. The Americans should be thankful to the Chinese for the trade deficit that actually lower the overall trade deficit of the US with the rest of the world.

This is the first fallacy of trade deficit with China.

The second fallacy is export or selling to China. China can only buy what it needs plus whatever it wants for storage and reserves and nothing more. China is buying all the grains and food it needs from the Americans plus the rest of the world. The Americans cannot expect China to buy all its food and grains from the Americans at higher prices when it could get cheaper from other sources. There is a fixed amount that China needs to buy from the Americans. But China can buy other goods from the Americans to narrow the trade deficit, and what China needs is high tech goods. But the Americans refused to sell and insist that China must buy more grains and food. Is this reasonable, logical, fair? The big trade deficit is self inflicted by the Americans. China is also interested in investing in properties and assets in the US, but the Americans refused to sell. Goods that the Chinese do not need are as good as rubbish, waste. Americans cannot be expecting China to be buying unlimited rubbish and waste from them just to lower the trade deficit.

The buying and selling, or import and export of both countries are governed by the principles of economics, free trade and capitalism. The Americans must stop spreading white lies that they are the victims of unfair trade with  China. They can stop buying from China and buy from other countries. The truth is that they are making billions of savings that they would otherwise have to pay for more expensive goods from other sources.

Trump is claiming victory, he is winning, the Americans are winning in this trade war, China is losing, China is suffering from lower GDP growth. For things that China is not buying from the Americans, Chinese can always find substitutes at lower prices from elsewhere. China can also sell its goods to other countries as its products are cheaper and better than the Americans. There will be temporary loss of trade between the two countries but China would soon find new trading partners and developed new supply chains and networks.

What about the Americans, where else has such a big market for expensive American goods, for American soya beans and food products? Where could the Americans find a 1.4b market of middle class consumers? The truth is that many of the American farmers and businesses are closing down and suicide cases have increased substantially. There is a depressive mood transcending across the American continent, a sense of despair. The tariffs are not only hurting the people in business but every ordinary American that needs to consume goods and services. They all have to pay more, their pockets are hurting. How long can they last when 50% of the Americans are living from one pay check to the next and cannot afford a sudden bill of $500?

Trump can continue to put on a facade of winning, everything is fine when everything is not fine. China's GDP may fall by 0.8% from 6.5%, still giving a growth of 5.7%, numerically. The American GDP will fall by 0.3% from 3% ending with 2.7% growth. Who is the bigger loser? The Americans would feel the pain in less than 6 months, with more suicide death, business closures and bankruptcies.

Trump cannot hold on for long, a lie is a lie and will quickly be exposed. The pain and suffering will be born by the ordinary Americans, the farmers and the blue collar workers. Show hand time is near and it would be game over for the Trump Administration.

Say a big thank you to China for the big trade deficit, for the privilege of buying cheaper goods and services. It could be worse. Without China, all the Americans living from one pay check to another would not be able to make ends meet, unable to buy the little essential and luxury items Made In China. The Chinese did not force the Americans to buy Made In China products. They can buy from other countries and reduce the trade deficit with China immediately.  Why so difficult and need to start a trade war?

Don't buy Chinese products, just like don't allow Huawei to enter American market. China can also don't buy American products, don't buy Apple. What would happen to the poor American middle class when they are unable to buy cheap Chinese goods and did not have enough money to buy expensive European or Japanese goods? China is the saviour of the American middle class.

In the meantime Trump said the America economy is growing, unemployment rate is at the lowest. If this is true, it means more companies are hiring than companies closing down and losing jobs. Time and truth will tell, very soon.

PS. Walmart is going to close its doors soon if it has to buy higher priced goods from China due to tariffs as there are no cheaper and better source of goods other than China. The poor Americans farmers cannot sell as China would not buy. Those that want to buy cheap and value products from China cannot do so because of tariffs and fake protectionism.

China must stop selling rare earth to the US on grounds of security and national interest.

29 comments:

Ⓜatilah $ingapura⚠️ said...

@ RB,

Trump’s still playing with house money, and although the tariffs are “funded” mostly by end-users, China is the one suffering. The short-term solution has stemmed some of the fallout with the PBOC pumping in extra liquidity, but this is not sustainable cannot continue. Many China business will fail eventually once the liquidity, loan subsidies end. Other measures like increasing the bank’s lending ratios will also work in the short term.

If the Chinese can “tahan” another year, and influence the US voter not to re-elect Trump, that could bring relief.

Trump can claim his pyrrhic victory, but in the Big Picture of China’s continuous 3000-plus year history Trump’s tariff wars are just a small blip in the timeline. China has suffered worse challenges and prevailed, many of those challenges lasting hundreds of years.

Chua Chin Leng aka redbean said...

If you are reading western media and Trump's twit, Trump is winning and China is crumbling, everything is breaking down. China has nothing to fight back, only the Americans are hitting. Trump and the Americans did not suffer at all and enjoying a winning fight.

China should just stop all purchases of farm produce, soya beans, pork, oil, seafood, etc etc. The Chinese is treating this as another long and protracted war like the Long March or the Battle of Shangganling or Triangle Hill. It will be an all out battle of attrition.

China is in for the long haul. The Americans could not take the pain for more than 6 months.

Unknown said...

China has the biggest deposits of rare earth elements and also the biggest supplier of certain particular rare earth elements that the US's manufacturers require to make aircrafts, avionics, spaceships, rockets, robotics, headphones, communications equipments, tv and computer screens, touch screens, stealth capabilities, over-heating prevention and protection, Wi-Fi equipments, automatic cars and vehicles, and other high-tech stuffs.

Yes, Rare earth is plentiful all over the world. However, it is not easy to extract them because they are very tiny particles spread over best areas. It is not cost-effective to mine them like any other metals such as gold or steel. The only rare earth mine in the US has closed down because it has been depleted of the metals and the cost of production has gone up tremendously.

Other countries like India, Australia, a few African countries, Brazil, Mexico and Russia (and even Malatsia) have been trying to mine and produce rate earth for the past 20 years but they are too little and too costly. Otherwise, why would US manufacturers collectively buy 87% of their needs of rare earth elements from China? Why not buy from Australia or India? Price is the only consideration. In business, either you cut cost to increase profits or you increase cost and increase price and therefore decrease sales and decrease profits.

Trump has become a billionaire and built a business empire. He should know better. Unless, he is deliberately sabotaging the US like what Gorbachev has done to disintegrate the USSR.

China will not, cannot and must not be defeated by Trump's unilateral one-upmanship strategy to belittle, destroy and annihilate the Chinese People.

This is no more a trade war. This is a total war, encompassing the psychological, ideological, cultural, political, racial, historical and survivability aspects of the Chinese People and the rest of the world.

The Evil US Hegemonic Empire must be destroyed or dismantled like the British, Mongol, Roman Empires, FOR THE HIGHER GOOD OF ALL MANKIND.

Ⓜatilah $ingapura⚠️ said...

@ RB

I don’t as a general rule, read nor listen to the MSM.

My shit is all data driven. Data from the finance and banking sectors is more trustworthy (of course they can be faked...nothing is 100%) and typically apolitical and non-culturally biased.

Money is a culture which is universal. It’s transcends everything and tells a truer story of what’s going on.

Trump clearly has the upper hand now. He’s still playing with house money. But house money doesn’t last forever, it will run out. Similarly, China’s short-term measures are not infinite.

The ying pai (hardliners, mostly military) are getting restless and itchy. Xi is the head of the Chinese military who ying pai senior officers are strategists and tacticians...probably some of the best in the world. I think Trump is underestimating the “talent” China has when it comes to fighting...especially asymmetric warfare; and a trade war is warfare.

At the end of the day, China is a military dictatorship...but not just any military dictatorship like some shithole South American or african cuntry.

The people running the show in the PLA are vastly capable---there is a high degree of “meritocracy” in the military. You want to advance, you’d better be good, and the competition is brutal.

Anonymous said...

UK and Japan have joined USA to ban and boycott Huawei. Australia was the first to do so. Now Trump has dictated to South Korea to also ban Huawei. Putin has been approached and persuaded by Trump's lapdog Pampering Pompous Pompeo to also ban Huawei but to no avail. The EU has also been told by Trump to follow suit but also to no avail (except a few whose balls dropped).
Next will be India, Middle East and ASEAN.

WHAT STAND WILL SINGAPORE LEADERS TAKE?

Neutral, pro-Whitemen or pro-China? Never forget, Singapore's population at present is still 60% Chinese. The import and conversion of India's Indians to Singapore citizens have not reached a critical mass yet. The existing critical mass is still predominantly Chinese ethnicity. So, calculate properly and cautiously. Don't make a hasty mistake that will mean a one-way ticket with very slim chance of a reversal option.

Chua Chin Leng aka redbean said...

This trade war is turning the USA against the rest of the world in general and against the Chinese Civilisation in particular. Even the Taiwanese are rising up to call for a unified front against the American bullying. The separatist group has lost its appeal and fight for an independent Taiwan. The call for reunification is getting stronger and many Taiwanese are now vocal in referring to China as mother land, our country, 'zhu guo'.

China can depend on TSMC to provide the chip making capability to produce more advanced chips in this fight. The Taiwanese are getting to realise that a crippled and weak China would be to their disadvantage and that the Americans are using them as a pawn in their wars against China. They are standing up for China and the Chinese Civilisation, with the pro independence a dwindling minority. Their future is with a strong China. Trump is helping this process of rejunevation.

All the American and allied country's companies now cannot sell to Huawei, ie, fall in revenue and excess stocks and excess capacities as Huawei is one of their biggest customers. The Americans would have to live without 5G and the small towns would have to change all the infrastructures built using Huawei equipment. It is going to be very costly. They can't afford that.

Anonymous said...

The smarter European countries know they need Huawei for 5G tech. Britain is increasingly isolated and without Huawei it is going go out on a limp. France and Italy and Germany would go for Huawei's 5G.

Singapore, seems to have a little shift in policy towards China. But change is not strong as anti China elements are still in power and very strong. For the moment wearing a smiling mask to look like friendly to China.

And when the critical mass of Chinese pop here falls to a lower level, everything will change to be pro American and anti China for sure with the bananas cheering for the Americans.

Virgo49 said...

Will the Rest of the Overseas Chinese also stand up and be counted for China?

Many had already been running skunks for the Whites.

One Hen said no country should take side.

One Goldfish Eye now wayang leaning towards China.

Knowing sinking land be badly affected by this Trade War.

Bananas overseas Chinese long been ingrained by the Whites and just like their White Masters been having good lifes would not stand up as Chinese against the Whites.

See so many ABC - Americunts Born Chinese and Koreans working for the Whites against their own.

Overseas Chinese been used as Scapegoats in many of the Countries that they had resided and prospered their economies for them are still been treated as Outcasts.

Also due to their traitous kind who on self interests wholesaled their own.

If all are United, it be a better world as even claimed by the Others who seen the Evils of the Whites and Americunts.

Chua Chin Leng aka redbean said...

This trade war against China is very similar to the Battle of Triangle Hill. The hills occupied an area of 2.7km by 3.5km, a very tiny area for a battle. The Americans thought it was a cake walk and would take the hills with max a loss of 200 men and in a few days.

The battle dragged on for 43 days with heavy bombardments for American bombers, artillery and tanks. Both side eventually committed more than 50,000 men each and suffered heavy casualties, the death tolls were in several thousands.

The poorly armed PLVA, with poor logistics, starving, cold and with small arms, with no air support or tanks, held their grounds. The Americans with superior powers and soldiers from more than 12 countries, could not take the hills. It ended at a stalemate with the Americans seeking for a ceasefire.

This trade war is very similar, the Americans appearing to have the upper hand and pulling all its allies to fight Huawei and China. What would be the end result? Sure win, like Triangle Hill?

Chua Chin Leng aka redbean said...

33 American companies made US$11b doing business with Huawei.

These 33 companies would now not get the US$11b.

Would these companies announce profit warnings now that they cannot do business with Huawei?

This ban on Huawei would also harm these American companies.

Virgo49 said...

Dotard is only profiting his own business by playing these games.

Do not be surprised that these 33 companies as business entities and what's free democracy and marketd will lean towards the Chinese.

As for the Chinese Companies, they will stick to their collective interests of protecting their Mother Land and not on profitd alone.

Dotard may be left standing naked alone.

Nancy Pelosi gonna skin him with impeachment and the Judges are not on his side.

Anonymous said...

@ Chua Chin Leng aka redbean May 23, 2019 10:27 am
//The call for reunification is getting stronger and many Taiwanese are now vocal in referring to China as mother land, our country, 'zhu guo'. //


Uncle Ang Tao,

Why you calling motherland China "Zhu Guo" (猪国)?

Should it NOT be (spelled as) "Zu Guo" (祖国)?

It is quite HEART-BREAKUNG leh (to hear it from all people, YOU - Uncle Ang Tao).

(Can you eat less "CUNT TONGUE" (French Fries, Potato Chips, Mashed Potatoes etc) so that you will not become "banana-rised" and (often) spout "broken" Chinese)?

Pleaseeeeeeee.....

Anonymous said...

@RB,

Like Triangle Hill, cheenas need to be prepared to die 12X for every 1 USA killed. Somehow I seriously doubt today's cheenas are like the uneducated brainwashed unthinking cheenas of 1952. LOL!!!

Money is the REAL UNBIASED reflection of Reality. So far, it has been a battle of attrition & cheenas are bleeding badly. They will need to survive with much lesser blood if they want to continue.

Cheena stocks versus Angmoh stocks versus Sinkie stocks

Many Sinkies will die or jump condo/MRT/HDB if battle of attrition continues into war of attrition!!

Anyway, good for me as I can swoop in to buy good companies at big discounts!! 6-figure war chest ready to be deployed. Currently rotting in FDs & S'pore Savings Bonds.

But I need to be prepared for my 7-figure portfolio to be decimated as well --- no problem with experience of AFC, dotcom, 9/11, SARS, GFC under my belt!!! BRING IT ON!!!! :)

Chua Chin Leng aka redbean said...

Anon 1:16, apologies, you are right. Just hit without checking. Should be "Zu Guo" (祖国). I was using this antique laptop left in the office and no facility to type in Chinese characters.

As to Anon 1:51, please lah, when you read numbers put up by the Americunts, they always exaggerated their numbers to show they were winning, like in Vietnam, in Iraq, and in Korea, they always killed a lot of their enemies. You know how they did their counting? That is also a reason why so many heroes claiming to have killed so many enemies in their imagination.

Elementary military knowledge, between attacker and defensive forces that were dug in, the casualties will be higher on the side of the attacker. The figures given by a Taiwanese, not China, was that on the first day of the attack, PLVA lost slightly more than 500 men while the American side lost about 1,700. When you attacked a position, you have to chionh in the open and to be cut down. The defenders were in their bunkers.

Throughout most part of the Korean War, the PLVA were doing the 'chionhing' and thus lost a lot of brave men.

It was true that the number of dead in the Korean War was much higher on the Chinese side as they were fighting with inferior and outdated small arms. They had no choice but to chionh and die for their country against superior weapons and firepower. And they still managed to chase the yanks all the way from the Yalu River to the 38th parallel and forced the Americans to a truce. They won back all the land for the North Koreans from the Yalu River to the 38th parallel. You know how far was that distance, from Penang to Singapore.

Today's warfare by the modern PLA would be different. They have as good modern weapons as the Americans, with air, space and artillery support and there is no need to use their bodies to trade bullets.

When the Americans with superior air, land and sea forces could not win against a peasant volunteered army that fought mainly with small arms, rifles, grenades, a few pieces of low calibre artillery, what hope have the Americans against a modern PLA as well fitted as them?

The Chinese were poor then, under equipped, but not today. Their warfare and tactics would be totally different. They need not use land and geography to fight the enemy by retreating and fighting guerilla warfare and people's warfare. They would stand and fight with air, space, tanks, submarines, fighter bombers, missiles etc etc.

Your bias against China is typical of a banana, with Angmoh forefathers.

Anonymous said...

RB, this 1:51pm cheena thought he writes English so he is not cheena. Ask him to look at the mirror and see what he looks like, what is his skin colour and features.

Maybe he has hooked nose, blonde hair, blue eyes or half half, like a cross breed aka chap cheng look.

What's his name? Anthony, Michael, George?

Anonymous said...

Let us all watch how this gangster Trump and his gangsters be impeached and put behind bars. The Democrats are preparing to impeach him, it is only a matter of when.

Trump has called on all his gangsters not to attend any meetings to investigate his collaboration with the Russians.

Anonymous said...

What's his name? Anthony, Michael, George? Hahahhahahahahhah, I think more likely Ah Huat or Ah Seng or Ah Beng. Oh, oh, maybe Ah Tan or Ah Lim.

Anonymous said...

@RB

///As to Anon 1:51, please lah, when you read numbers put up by the Americunts, they always exaggerated their numbers to show they were winning, like in Vietnam, in Iraq, and in Korea, they always killed a lot of their enemies. You know how they did their counting?///

I'm only talking about the Battle of Triangle Hill because YOU were the one who brought it up. It's quite a well recorded battle from all sides. And I love numbers as I do my investing by quantitative methods, not that you'd understand even though you're a so-called broker.

Maybe that's why you have to talk cock & start bringing in rubbish talk about Vietnam, Iraq et al. LOL!!!

12-to-1 kill ratio --- that's the official KIA numbers from both US as well as PVA/PLA/China records for the Battle of Shanganling/Triangle Hill.

Of course, I'm only talking about KIA.

As for WIA, the angmoh kena 1000+ versus 6,500 for the cheenas.

So basically the cheenas need to be able to take that sort of shit in TODAY'S war to outlast the angmohs.

And I'm saying that TODAY'S cheenas WON'T be able to take it as well as in 1952.

No need to talk about cheenas & chao angmohs. Just look at us Sinkies...

Look at S'pore --- SARS was just a MINOR thing & the whole economy & everybody & their dog ALL CRYING MOTHER. Please larr. Jobless for 12 months & already want to die?!?! You cannot take out your few miserable dollars in CPF and already want to fuck spider?!?! Your HDB going to ZERO and you want to kill people?!?!?! Fuck you lah!!! LOL!!!!

Sinkies need to be a FUCKING WHOLE LOT TOUGHER to be able to tahan this economic & psychological & ideological war.

But I seriously doubt most Sinkies can make it --- based on the types of comments on this blog!!! LOL!!!!! WHICH IS DAMN FUCKING GOOD FOR ME AS IT MAKES IT MUCH MORE FUCKING EASIER TO EXTRACT MONEY & MAKE MONEY FROM DUMBASS SINKIES!!! :) :)

Chua Chin Leng aka redbean said...

Matilah, '12-to-1 kill ratio - that's the official KIA numbers from both US as well as PVA/PLA/China records for the Battle of Shanganling/Triangle Hill.'

These are official figures? I read the Chinese version with totally different sets of figures. You got your figures from Wikipedia written in English? Remember, Shangganling the Amreicans were attacking, the PLVA were defending inside bunkers. If the figures were 1:7 in favour of the Americans, they would have overran the defenders and flushed them out. To attack you need 3:1 and you die also more than the defenders if you want to win.

Today you think the figures would still be 1:7 in favour of the angmohs? Eh, the world is changed lah. The poverty stricken China of the 1940s/50s is now the second largest economy in the world and more than 1.5 times bigger than the American economy in PPP terms. There are more billionaires in China than in the USA.

The weaponry are equally good, so don't still stick to the ancient mentality of poor peasant soldiers fighting well equipped American soldiers lah. China has more drones than the Americans and the official figure of 3,000 nuclear warheads is just officially acknowledged in the media but actually how many no one knows except the Chinese. You want to believe official figures in the media about military secrets?

Don't be a dumbass and always thinking like the angmohs, angmoh tua kee. This is the 21st Century. Sinkies and Taiwand and Hongkies used to look down and laugh at the poor Chinamen. Now who is laughing at who, who is richer and more powerful than who.

Virgo49 said...


Mr RB. Americunts soldiers cannot do ground battles anymore in the 21st Century.

Only in their Reel Lifes NOT Real lifes.

In Cinemas And Movies, they always portrayed themselves like Rambos killing all the Rest of the World's Armies.

Now, their Warfare only BOMB BOMB and BOMB and later just went in as victorious victors when the other side is down been not on par with their arsenals.

Try that with the PRCs who can hit as hard as them with their arsenals and their well trained soldiers, the Americunts would be annihilated.

Cannot even beat the ISIS in ME with their soldiers only supporting backlines.

Their Perceived Superiority is OVER.

Cheers

Virgo49 said...


Go to TULSI 2020 by their own account.

Quote by Pearl S.Buck

Nothing and no one can destroy the Chinese people. They are relentless survivors. They are the oldest civilised people on earth.

Their civilisation passes through phases but its basic characteristics remain the same. They yield, they bend to the wind, but they never break.

Cheers

Anonymous said...

@All,

Numbers & statistics by 100s of millions of people around the world openly tallying up the scores don't lie

Trump will wait until angmoh stocks drop -20%, then start to negotiate with Xi.

By then cheena stocks will already be down -40%. Sinkie stocks will likely be down -30%.

That's when I'll start to deploy my 6-figures war chest!!!! HUAT ARRRR!!!!

Anonymous said...

Congratulations
to Anon 501 PM.

Do seize the opportunity to make more money for your successors.

Third World War is in the Making though not everywhere will be fighting and killing. Those filthy rich shall be able to buy safe shelter and live to propagate.

You are one in a million capable of making use of war time to make your pile abd lives to enjoy your profits.

Once again,
Congratulations and Respect to You.

Cheer !!!

Anonymous said...

5.37 pm anon. Both the wsg and u need to be sodomized. Best do us a favor u sodomized each other.

Anonymous said...

Anon 5:37 pm and wsg are the same person.

Anonymous said...

Why are China, Europe and the rest of the world putting up with the American nonsense and lies, bullying and gangsterism? I am just up to my neck listening to their rubbish about how superior they were when they have been lying for years.

The Americans have been stealing technologies from Germany, Japan and everywhere since the end of WW2. Today they are lacking behind in many fields and still got the cheek to accuse China of stealing their technologies.

The advances made by China in many fields cannot be copied from backward countries that did not have those technologies ie the USA. USA is fading into history, as the past, has been.

Anonymous said...


Anon 5:07 PM
is certain that Anons' 5:01 PM
Successors and Kins will not have infighting, plot and battle, to inherit his/her fortune. The War in the Family might have started as in the First Family of Sin for all to know.

Anonymous said...

Agree with Anon 24 May 2019 at 11:48 am.

Most events simmer unnoticed till they come to a boil.

The Love for Money invariably is the Cause abd Source of Evil and Woes.

No one is able to take along ones wealth at the end of living, there is nothing to gloat about ones fortune. Worse is to know that others scheme to inherit it with malicious plots.

Anonymous said...

Karma seems to be working in one family though. All the wealth and power cannot avoid it. Believe it or not is up to you!