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Why produce things for the U.S. in China, and not in the U.S. itself?
The recovery of the U.S. economy will be vital for the world. The Obama administration is calling for more export by the U.S. companies. This policy is right.
But I for one appeal to all countries to make far more direct investment in the U.S.
Japan, South Korea and even the U.S. companies build factories in China for producing cars and computers only to export them to the U.S. Sure the Chinese market is important, and very promising.
But yet the U.S. and other markets are far larger than the Chinese market and will be so even after 50 years. The number of Chinese who are able to consume fairly enough will not exceed 1 billion, whereas the total population of the U.S., EU, Japan in addition with the fair part of the population in India, Indonesia, Vietnam and Africa will by far surpass the Chinese number.
The American economy can be rejuvenated, if we combine new immigrants with our own direct imvestments in the U.S. All countries, including China, shoud build more factories in the U.S. , if they want to increase their export to the U.S. It is logical and even economical, because the wage level in China is rapidly growing and will be on par with the wage level for new immigrants in the U.S.
Furthermore, the newly introduced health care system will eventually reduce the cost of production in the U.S.
I propose that President Obama will launch a program to invite far more foreign direct investment in the U.S. , when he comes to Japan for APEC meeting, or even before that. We need a forward-going solution.
(note: My friend Hal had sent me the following URL. I have not yet read it, but perhaps it may have something to do with my view above.
http://www.stateofworkingamerica.org/swa08-ch08-international.pdf)
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Comment
Dear Len
China is going to abolish the favor in taxation which has been accorded to foreign companies.
And the emotional xenophobia may eventually lead to appropriation of foreign factories.
It is time to invest in other countries, including the U.S., the largest market in the world.
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