That some manufacturing goes to the low cost countries is natural and even "fair." But when a country purposely undercuts its currency, it is committing trade protectionism itself.
China sells us cheap tchotchkes, but we can still have the potential to sell them higher-end stuff they can't duplicate easily on their own. There may still be an imbalance in trade. But when they artificially cheapen their currency, it makes that imbalance wider than it would be "naturally," which undermines us in the long term. But it protects China's domestic producers from imports, AND puts them on a better footing for exports.
It's not just that they're running faster and harder, but that they're also tossing caltrops behind them against the other people in the race. |
