Chinese decisions have impact on far side of the world

Thursday, July 31, 2008

In the old days, newspapers that didn't have much local news were said to be "addicted to Afghanistan." Journalism insiders recognized that editors were biased in thinking that important news usually happened far from home, that our communities' petty concerns weren't important in the grand scheme of things.

Today, however, most newspapers and other local news outlets realized that local news is their bread-and-butter. No one is going to be as concerned about local goings-on as they are, and no one can beat them to the story.

But over the years, the lines between local and world news have become blurred.

Wars always seem to bring international news home, and the War on Terror is no different. These days, we're interested in news from far away -- we've even noticed one local television station running weather reports for Afghanistan as well as Iraq.

While most of us think of China as a source for low-priced goods, the Alliance for American Manufacturing cited a report this week indicating the country is taking more and more high-tech, high-paying jobs from Americans, specifically Nebraskans.

The state lost 12,000 jobs between 2001 and 2007, according to the Economic Policy Institute, including more than 2,100 workers in the computer and electronic product manufacturing industry.

The AAM advocacy group notes that while China diversifies into electronics, aircraft, auto parts and machinery, the U.S. is forced to get by on exporting lower-wage scrap products and agricultural goods to China. Last year's U.S. trade deficit with China included $68 billion in advanced technology products, six times the deficit in 2002, and dwarfing the tech trade surplus with the rest of the world, which stood at $15 billion.

AAM executive director Scott Paul says it's no mystery why China is so successful in exporting to the U.S.

"China's manipulation of its currency makes the yuan artificially cheap, effectively subsidizing exports," he said. "Beijing's suppression of labor rights also lowers wages. China subsidizes some key industries and maintains barriers to some imports."

What does China do with its newfound wealth? Buy more oil, for one thing. While we 301 million Americans consumed 7.5 billion barrels of oil in 2006, China with its 1,300 million people burned only 2.6 billion barrels. Imagine what they'll do as their lifestyle improves because of exports to the United States.

China is also using its profits to invest heavily in Africa, building roads, hospitals and railroads for that continent's massive oil and mineral wealth. And, it's doing it at a profit, loaning countries like Congo the money to build the infrastructure to be paid off in commodities.

It's also investing in the United States, owning some 47 percent of foreign-owned Treasury securities, something that has financial experts worried.

Chinese officials are hoping the Olympics will present their country to the world in the best light possible, and we wish all of the athletes the best.

But every time we fill our gasoline tank, make a purchase decision or observe trade policy votes, we should remember that we're all affected by economic activity on the far side of the world.

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