What should the west do to protect its economies from the asian Dragons?

Question

With China and other asian countries producing everything from A to Z to sell on the open market should the western countries demand that they revalue their currency and if not whack of massive tariffs to their produce that they sell. As the west will be replaced as the dominant force in the world economy and politically in the next fifty years so its in our interest to slow them down so that they do things on the wests terms.

Answer 1

There is nothing that china or the Asian country's produce that we in this country need. Most of what they produce is made by cheap or child labour

Answer 2

It all depends whose interests you are defending.

If you are defending the interests of customers, then you should think what matters to you, where the products are made, or their price? If it is where they are made, then you should get ready to pay much more than what youare actually paying (many many products are manufactured in Asia, and just tagged/branded in the West whether we know it or not).

If you are defending the workers, then definitely you should ban foreign products; but you must also expect that the Asian economies will also ban Western products. So all industries that survive on exports will have to 'downsize' if not close (if the domestic market is not big enough to support their economies of scale). I guess these workers will have to change jobs, even though they are efficient enough to compete on the world market. Penalise the efficient to help the inefficient.

In terms of political power, cutting out the artifices, the reason why the US is the dominant force is its willingness and ability to project power, that is to bomb and invade. Europe is past it. The UK is just a sidekick who wants to bask in the glory of the US. The rest of Europe realises that the domination period is over, it is now the US and the US alone that dominates. The days of the European empire are over.

Therefore I guess the solution is:
1 Use military muscle to subdue Asia (as is being done in the Middle East). This is likely to work for a while.
2 Tariffs to be put if you prefer to defend workers (esp less efficient ones) rather than consumers.

Please note:
Do realise that the domination of the 'West' is an illusion unless you only mean the US when you say 'Western countries'. You might want to include the UK, more like basking in the Glory of the US, for the time being.
Once the space military machine is up and running, I am not sure the UK will have much use for the US anymore; afterall, why should the US care more about the UK than abour Germany or Pakistan or South Africa?

Answer 3

The UK is probably one of the largest (in $) investors in China, and this includes opening large scale factories that are highly labour intensive. In time, China etc will be manufacturing high specification products that only the West produce at present, and u could say that we will lose our comparative advantage in less time than you think. Establishing tariffs require political will among major nations, even if they are popular amongst the voters. If the west prevents capital outflows to the east then this does nothing to persuade the owners of foreign investment into China etc to return to the west. Once that investment is gone it is pretty much gone. Yes corporates do repatriate the revenues earned in the east back to the west, but the loss of jobs in the west is an important issue. So doing without trainers and basic computer ware and whatever else that is suddenly being produced "overseas" might be an option, even though this requires consumers to act in unison, which they won't because we all want something cheap and easy to use, do we not? A friend suggested : If you want realistic and practical solutions to the ever increasingly difficult problems that we have "created for ourselves" (i.e., by losing to the global competition in the first instance), then relocating over there might be an option, if you can't beat them you might as well join them. I'm not even going to comment on the lower utility bills.

Answer 4

Limit or tax the amount of investment going into China from the west. China currently has the highest foreign reserve account of any country. The west's investment is contributing to the "boom". Lots of money is poured in, and a very small % is repatriated. China is like a sponge. They will soak up every bit of the technology transfer they can, then produce on their own terms, period. The China Space program is a small example. For those on wall street, when they buy China stocks, they win by taking the gain and dividends out of China. And at the same time Chinese companies win because they get funding for expansion. So, how can the west protect itself from the asian dragons? The western investors promote investment into China. Perhaps a re-think of that would slow it down, but I doubt it.

Answer 5

given how devaluated asian currencies are the best answer would be to push strongly towards a reevaluation of the chinese peg.
This can be done by political prssion, by direct intervention from the ECB on the money market (though the RMB is not really tradable).
But the best solution is probably a complete revamping of the monetary system, one that would force trade to come to balance in the medium term.

Answer 6

the coment made by the other guy is wrong what china and the rest make are badly needed by britain and surrounding countries otherwise where would all of it go, the only thing that we can do is replicatee until we produce what the world needs. its going to take years though china and japan have always been 10 years ahead of our time.

Answer 7

protectionism isn't defendable. Trade is a two-way process. We also benefit from trading with China - we wouldn't do it otherwise! your question suggests that we lose out by trading with them. sure, there are job losses but it's not the chinese fault for that. and most of these people find other jobs sooner or later.
tariffs are done at the EU level and demanded by countries such as italy and spain, whose economies are unable to cope with the competition. David Ricardo (one of the most famous economists after Smith and Keynes) argued very strongly for the removal of trade barriers. His argument is as strong and as relevent as ever.

Answer 8

Nuke em, Nuke the ba****ds!!! That'll fix it!!! Unfortunately thats their right, you can't have a free market but only if you follow our rules, or we'll end up with an Adolf Hitler style system. Besides if the global economic situation keeps evolving we'll eventually be one major economy all pulling in the same direction, which will give us the perfect situation. Each country able to concentrate on it's strongest factor only, and not having to waste time trying to divert resources to compete in a market it's not strong in.

Answer 9

The answer is product differentiation and brand management. You should build a strong brand for your product, which is relatively more expensive than Chinese products. But the consumer will prefere it if they are convinced that the quality of the product is much higher or the prestige brought by this product is high.

Answer 10

I'm no economist but I think that would be quite hard to do as China is owed trillions of $'s by the USA.