Globalization: China & USA economic friction could benefit MIT (Malaysia, Indonesia & Thailand)

Which markets should the Thai export pillage?

Blog Note: The following article from China Daily has an interesting point-that the China and USA economic friction could in fact benefit the MIT countries-as USA consumers switch from Chinese products, to import and consume more from the MITs. The problem in such a simplistic equation, is off course, China is developing into a major market for the MITs exports. Thailand, for example, is seeing its export to China explode.

But obviously, a major trade friction between China and USA would hurt China significantly given that USA is a major export market for China. With a weaker China, the MITs export to China would suffer. There are many key aspect in analyzing the situation, from currency to level of trade, and the products specifics issues themselves.

The bottom-line, however, is that global trade may be entering a volatile stage-with some shifts occurring. As always, those that can best ready themselves to future trend, benefits the most from that future trend.

  • The following is from China Daily

Comment on “US’ much ado about nothing” (China Daily, Nov 3)

The United States is back at its finger-pointing game. The only difference is that now it does so without giving an issue a second thought, and at times, without knowing what is actually going on.

US politicians are hijacking economic issues, national and political both, for political and personal gains, which will harm the Sino-US relationship.

The Sino-US trade surplus issue cannot be resolved through biased political measures. The trade balance is in China’s favor because of the structural differences in the two countries’ economies. US consumers need China-made products because they are cheaper. And they are cheaper because of the advantage China enjoys in the international division of labor and the global supply chain.

Even if the US were to restrict the import of China-made products, its consumers would find substitutes from countries like Vietnam, Thailand and Malaysia to replace them. So how will US companies gain?

China has been trying to correct the situation by revaluating its currency gradually and taking measures to boost domestic consumption. But the US prefers to turn a blind eye to these efforts.

The world knows that the global financial crisis originated in the US because of its slack financial regulatory regime and reckless commercialism. But the US has been blaming China for the ill-effects of the crisis. What Washington needs to do instead is take a good look at itself.

Gu Xiaoxia, via e-mail

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