Quote:
Originally Posted by Delgar
It only works if the consumers in the trade-deficit nation (USA) earn enough money to afford those cheaper goods while said trade-deficit nation makes it up in other areas. Its all about competitive advantage and balance-- you have to have something to sell, otherwise you will not be able to buy. The problem with China is they are an emerging economy with a controlled currency and also have 1 billion plus people to work, many of whom are at the bottom of the heap who earn far less than their American counterparts. These and many other factors have lead to an imbalance. Those cheap iPhones are cheap in price, not person-hours.
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The thing is that China's economy is already heavily protected. It's only one way free trade. If you want to buy an American car in China instead of one their domestic brands, they add on 20k in taxes. China generally has very advantageous trade deals with every country.