Is the growth of Asian economies(China, India) a threat to the US?

Question

I need to analyze the growth of US trade with China and India. Is growth of these and other Asian economies a threat to the US? I'd prefer to hear both sides(pros and cons), if that's possible.

Answer 1

Depends on your energy outlook.

From the standpoint of conventional economics, the growth of China and India is not a threat, but an opportunity; to develop, China and India will require lots and lots of capital goods (from power plants to airplanes), in which developed countries have a distinct comparative advantage.

At the same time, it is possible that continuing growth in China and India will put upward pressures on energy prices and increase emissions of greenhouse gases (even now, China's carbon dioxide emissions are second only to U.S.', mostly because of China's reliance on coal), so in this regard, growth in Asia can be a threat, but not just to the U.S., but rather to the survival of the human race. Indeed, it can be argued that the greatest threat to the survival of the human race actually comes from the U.S. and its unwillingness to do something about its greenhouse gas emissions...

Answer 2

No, the lack of growth in the US is a problem for the US! Think about what creates economic growth in the US, and why growth rates have recently not been so favourable. Also, high growth rates in China and India are expected, given that they are middle income economies- they simply grow at a faster rate as they are smaller to begin with. Diminishing returns should then kick in.

Answer 3

From an economic standpoint, definitely no. China and India's growth are increasing the demand for U.S. products, creating more jobs for Americans (although I live in Canada, it's the same for Candians as well). It will also increase the average American's standard of living, as China and India will have products and services offered either better or cheaper relative to the U.S. Economics is not a zero-sum game, U.S. does not have to lose if India and China gain. The key to the U.S. remaining competitive is increasing its productivity in the long run.

Answer 4

Yes. We are to blame, the government is to blame, and corporate greed is to blame. We: We want "everyday low prices - always". So stuff that fills our shelves is made in China. Government: They listen to corporate lobbyists first and foremost. Corporations give to election campaigns and in return have "carte blanche" to do whatever they want. Corporate greed: Corporations want to maximize profits and minimize costs. They want Americans to pay top dollar for those goods and services, yet want to pay next to nothing to those that develop and manufacture these goods. The problem is the (1) the massive trade imbalance with China. China should import the same amount of finished good as we import from them. We should tax imports of countries that don't follow this (2) corporate taxation in the States is too high. Corporations that don't produce local jobs should be taxed at a higher rate. Corporations sometimes benefit by moving their operations off-shore to lower taxation levels. (3) Chinese Yuan pegged to the US dollar. (4) Salaries - if highly skilled jobs are sent to India, the Philippines etc, we are selling our future and education base. Today our telecom, aerospace, and biomedical technology is developed in India. We lose the skill-set. People won't want to study science and engineering. Tomorrow we'll have to go to India and China to develop our defense technology. We're saving a dime today but paying big-time tomorrow.