PALMETTO STATE PARTICULARLY PRONE TO LATEST CURRENCY MANIPULATION
We’ve written previously regarding the delicate interconnectivity between South Carolina’s economy and that of China … and even had some insightful guest commentary on the subject.
Well guess what … it’s time to revisit the Palmetto State’s proximity to China’s exceedingly volatile markets.
Last night, China’s largest stock market tanked – shedding seven percent of its value and prompting another round of currency manipulation from the quasi-communist nation’s central bank.
Given South Carolina’s heightened exposure to Chinese currency devaluations – the Palmetto state’s economy again finds itself in an especially prone position. How so? Well, as the U.S. dollar gains strength against a devalued yuan, the price of American goods is going to surge. That means fewer exports, and fewer exports means fewer jobs.
We wrote extensively on this issue back in August, revealing that 2.2 percent of the Palmetto State’s economy is tied to Chinese exports – the second-highest percentage of any state in America.
Then there’s the explosion of Chinese investment on the South Carolina coast to consider … and all the taxpayer-funded incentives Palmetto politicians are doling out to wealthy Chinese corporations.
Bottom line?
“Looks like South Carolina is in for a bit of a rough road this year,” one observer noted.
Indeed …
19 comments
You’re so, so, so clueless about economics it’s embarrassing. Just stop.
American Enterprise Institute’s Derek Scissors on this left wing canard:
“Myth No. 3: China’s exchange rate policies cost American jobs.
Fact: History says otherwise. China devalued the yuan and was labeled a currency manipulator in 1994. American unemployment remained low and labor force participation very high for five years afterward, until the dotcom boom turned to bust. From 2005 to 2013, China slowly made the yuanmore valuable against the dollar, as American protectionists demanded. Yet U.S. unemployment rose for most of the period and labor force participation declined throughout.
China steals huge amounts of intellectual property and large portions of its market are sealed off from American goods and services due to financial subsidies and limits on competition. These are far bigger problems than the value of the yuan.”
Ok, ok- but we have chicken and snowpeas in white sauce in China, which is a huge strategic advantage.
Som Ting Wong can tell you about the Chinese stock market woes.
Som Ting Wong? I thought he was one of the pilots that died in that Malaysian flight that disappeared.
We’ve got a ton of Duck Dynasty stuff on deep discount!
Come on down!
Does this mean all that Trump stuff made in China will be cheaper now?
Bangladesh …
Trump’s clothing is made in that country.
This based on a Late Night with David Letterman interview with The Donald.
David was picking out Trump ties and exclaiming how none were Made in USA.
Trump nodding his head said he’d have them made here.
Don’t know if that ever occurred …
If China has been doing any currency manipulation, it has been to prop up the Yuan and not let it float down in the free market. As bad as it may hurt exports, it will cut the costs of imports and help consumers. Also, China supplies inputs to some SC industries. They will be cheaper now. It would be worse for South Carolina if China has a recession. If letting their currency decline can boost their economy, then go for it. What is good for the Chinese economy is good for SC.
China is letting their currency fall now. That is bad for all Americans. It means we will buy more cheap Chinese goods and that is bad not good. Imagine a pile of money on a map of the US and a pile of goods that will disappear after use on a map of China. Now move money from our map to their map and goods from their map to our map. Once the money is gone and the goods dissipate what do we have and what do they have?
Cheaper imports means we send few dollars to China for the imports we are currently buying. Will that be offset by more purchases? Maybe. If we are having an economic slow down, then we may not purchase more imports, only pay less for what we are already importing. There will be American winners and losers. Should the US government interfere? No.
Our government interferes every day via money supply/interest rate manipulation, then has the temerity to complain about others(like China) do it…
The fact that you believe that is why we no longer have a textile industry in the US. There have been no US outsourcing winners except on Wall Street. The average American would have been better off to have purchased higher cost higher quality US goods.
It’s also the reason we don’t have rice cultivation on the South Carolina coast ei5her. I will trade the higher paying automotive industry over textiles any day. Those automotive industries export most of their production.
The automotive jobs are at the expense of Europe and Northern states, while the textile jobs went to Bangladesh and Pakistan. That should tell you all you need to know about the quality of those jobs.
“Silly Americans whine about currency manipulation by other countries even though America is the biggest currency manipulator in the world, printing up massive money to fund their deficit spending.”
Will this make the Trump hats cheaper?
Trump supports Smoot–Hawley Tariff of 45% on Chinese imports. He says China will prabably retaliate with a tarriff on American exports to China. This is the most despicable pandering to the fears of uniformed voters by Trump, yet.
This policy if enacted would result in stagflation at a level we have not seen since the seventies. Prices of all consumer goods would jump whether imported or not because domestic producers would switch to producing products that the tariffs create an artificial comparative advantage to produce. Some will switch from products they were previously producing thus causing their prices to rise.
Because we are already close to full employment, wages will rise, but those wages will be chasing more expensive less avaiable goods. Free Trade makes more goods available because each country produces only those goods in which it has a comparative advantage to produce. By definition every country has products that it has a comparative advantage.
Who would pay the tarriffs? Consumers in the form of higher prices for imports. Who would get that revenue? The already bloated Federal government.
Harley riders (not me) may disagree with you about tariffs. http://articles.chicagotribune.com/1987-03-22/business/8701220439_1_big-motorcycles-tariffs-harley
I would support tarriffs to punish dumping, foreign subsides or prevent monopoly as a temporary measure.
Wow, I haven’t seen a “we should do things like China” post on here in a long time.
A young Asian couple on their wedding night…they are both virgins. The man says to his bride, as she sits trembling, I will do anything you want, anything. She remembers reading about sexual positions, and says, I would like to try 69. He looks puzzled and says…you want chicken and broccoli in garlic sauce?