Rag merchants to the Middle Kingdom

Forbes.com has two consistent messages.  The first is that is it doesn’t make sense for Apple to assemble iPods, iPhones and iPads in this country and the second is that China is America’s most important economic partner.  I believe both messages are false, as I have said in multiple posts over the last few months.  Forbes.com commentator Kenneth Rapoza stepped once more into the breach the other day, boldly declaring “China. Love it or hate it, the country is the most important economic partner the U.S. has.”  Sounds a lot like his Forbes.com collegue Baizhu Chen who recently opined ” For there is no relationship in this century more important to America than the one with China.”  Now I would agree with these gentlemen that the U.S. is the most important country in the world to China.  Heck without their $300 billion trade surplus with us, China would have a $150 billion trade deficit with the rest of the world.  But I don’t believe that China is that important to this country’s economic future.

In his short post, Rapoza had a link to a fascinating report on America’s exports to China.  The report shows what each state’s five top exports to China were in 2010.  For my state, Washington, in 2010 we exported a lot of crops (apples and wheat) and a lot of Boeing aircraft; we had the second highest export total to China, $10.3 billion behind California at $12.5 billion.  But Washington State’s third largest export to China was “Waste and Scrap.”  “Waste and Scrap” are recyclable paper, metal and wood the Chinese import from us, make into stuff, then export back to us as finished products.  In 2010, “Waste and Scrap” was the #1 export to China from California, Hawaii, Maryland, Missouri and New York.  We also exported a ton of food to the Chinese to eat and lots of chemicals for them to make into stuff that they then exported back to us.  In all fairness we did sell them quite a few aircraft and cars.  Here is a link to all the numbers.

While I am glad that we were able to export a chunk of finished goods to the Chinese last year, most of what we export to them are the raw materials and some machinery to allow them to make finished products.  So while exports to China grew to $100 billion last year, I wouldn’t hold my breath waiting for the categories of our exports to China to change anytime soon.

About Simply American LLC

I live in Seattle and love telling stories about Americans, the places where they work and the things that they make. I have just published a book, Simply American, encouraging Americans to purchase American made products; the book can be ordered at www.simply-american.com.
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1 Response to Rag merchants to the Middle Kingdom

  1. The Social Critic says:

    I recall former Comptroller General David Walker on his fiscal wake-up tour and subsequent documentary DVD “IOUSA”, a year or two prior to the Great Recession, making the same point about America’s number one export — scrap. The front of the DVD jacket depicts the White House with a foreclosure sign in front of it. That about sums it up. (It’s a must-watch eye opener.)

    What’s lesser known is that poor children in China and Africa are often the ones who sort through our e-gadget discards attempting to eek out a living pulling circuit boards and precious metals. In so doing they are poisoned by lead and other heavy metals that can lead to learning disabilities, even birth defects in local human and animal populations. Clearly, there is more than one reason why e-waste and scrap should not be our primary export.

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