Which Nation over recent decades has proven to have had wiser government economic and trade leadership?
The Chicago Tribune article titled: China Cuts Taxes for Chip Industry, reported the following Statement”
“Leaders declared accelerating efforts to transform China into a self-reliant “technology power” to be this year’s top economic priority….
“Chipmakers can import machinery and raw materials tax-free through 2030, the Finance Ministry and other agencies announced. They did not say how large a subsidy to manufacturers that might represent.”
The Purpose of This Post
Is to relate an ancient wisdom proverb, an idiom, and personal comments why China is wiser than USA.
Idiom – from rags to riches
From being poor to being wealthy, especially through one’s own efforts. For example, the invention catapulted the scientist from rags to riches.
What’s My Point?
China industry is an example of wise management to “to transform China into a self-reliant “technology power,”
Anyone who studies how China’s modern infrastructure compared to the USA deteriorating infrastructures will readily recognize that China invested more than the USA ever since the USA agreed to allow China to become a member of the WTA, World Trade Association.
If we compare the wisdom of USA to China government leadership, China does whatever they can to support manufacturing industry in China while at the same time the USA did the opposite with manufacturing, the source of riches that transformed the USA from rags to riches.
Or in other words, the riches transformed China infrastructure from rags to riches, while the USA was transformed from riches to rags.
The result was loss of higher wage manufacturing jobs in the USA left the USA and workers living wages became lower when instead of manufacturing products they workers jobs changed to lower wage jobs of stocking Chinese manufactured products on shelves in Walmart.
My point is President Biden and the Democrat Party leaders have announced they intend to increase taxes on USA manufacturers while at the same time China is reducing taxes on manufacturers to become self-reliant.
Anyone who studies economics knows that when you add tax to any manufacturer, they in turn pass on the increased tax to their selling costs to buyers.
Another result is manufacturers have less money to buy new equipment and same as intrastate deuterates over time, so does a manufacture in the same opportunity as China manufactures of chips will serve to make China more self-reliant.
President Biden now wants to pass another trillions of dollars borrowing plan to rebuild USA intrastate to try to emulate China progress which was funded by USA outsourcing its manufacturing technology, equipment, and jobs to China.
As for self-reliance, the 2020 pandemic is an example of how reliant the USA became when we experienced that 90 Percent of PPE products were outsourced to China and the USA. The CDC at first stated than masks do no help prevent Covid to for mask shortages and PPE equipment be allocated to hospital personnel treating pandemic patients. While at the same time in China, every picture showed the China population wearing masks.
And when a product price increases because of the higher tax, the buyer is in effect paying the tax, not the manufacturer.
In My Opinion
Over time, taxing manufacturers, printing dollars, adding debt, is folly which will serve to hasten the riches to rags of all USA workers and spur inflation to lessen the value of the dollars they saved.
Outsourcing manufacturing to lower wage workers global sourcing to obtain cheaper consumer prices is in a sense, the opposite of King Solomons proverbial advice that “riches are not forever, nor does a crown endure to every generation”.
In my opinion, China economic government leaders have both eyes open and wiser to see and discern government short sightedness folly than USA leaders, same as the owl in the above feature image..
Read the Source Links below
Will USA increasing taxes on manufactures wise or foolish.
Which Nation will in time prove to have had wiser economic and trade leadership over time?
Regards and good will blogging.
Chicago Tribune, San Diego Union – Tribune
Idiom – Rags to Riches
Previous Posts – Trade