Far from taking over as the engine of growth from an exhausted West, China is making matters worse, says financial journalist Ambrose Evans-Pritchard.
“China is still exporting overcapacity to the rest of us on a grand scale, with deflationary consequences.”
At some point, American workers will rebel, Evans-Pritchard writes in the UK Telegraph.
"If you are not paying attention to this political time-bomb, perhaps you should.”
China’s "beggar-thy-neighbor" policies continue to play havoc with global trade and risk tipping the world into a second leg of the Great Recession, Evans-Pritchard says.
By holding the yuan to 6.83 to the dollar to boost exports, Beijing is dumping its unemployment abroad.
As long as China does it, other Asian tigers must do it too.
Moreover, Western capitalists rent cheap workers and cheap plants in Guangdong then lobby Capitol Hill to prevent Congress doing anything about it.
“This is labor arbitrage,” Evans-Pritchard says.
"U.S. unemployment is already 17.5 percent under the broad ‘U6’ gauge followed by Barack Obama.”
“More Americans have lost their homes this year than during the entire decade of the Great Depression. . . (and) a backlog of 7 million homes is awaiting likely seizure by lenders."
Figures from the Bureau of Labor Statistics suggest that cultural factors affect unemployment ratios.
The unemployment gap — 7.5 percent for Asians in October, compared with 10.2 percent nationwide — stems from a combination of education benchmarks and cultural traditions that foster family support when someone is out of work, researchers say.
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