China not to blame for US job loss

Updated: 2013-03-23 13:28

By Chen Weihua (China Daily)

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When I moved from New York City to Washington DC three months ago, I had to call cable and utility companies to cancel the services to my old apartment and fix the Internet service in the new one.

It was both time-consuming and painful. Each time I called, I was greeted by an automatic answering system that tried to navigate me to a solution. When that failed, I hit the button for a customer service representative. That was when the real pain started. All the representatives, I was told, were currently busy and the estimated waiting time was 18 minutes in one case and 32 minutes in another.

I sank into despair once when the phone was cut off accidentally after it had waited for nearly 15 minutes accompanied by service promotion ads and monotonous music from the other end. At that moment, I did miss my bank and utility companies in China where customer representatives seem always readily available.

I don't know how many people like to talk to a machine. But this is an area where lots of jobs can be created in the United States, especially when unemployment is still high - 7.7 percent in February, albeit the lowest since December 2008.

That probably explains why when China created 12.66 million urban jobs in 2012, the US created only 1.8 million. And mind you, those Chinese jobs weren't taken from Americans despite the fact that many US politicians and average workers seem to think so, and even use it as an excuse to gain political capital.

Two economists, Robert Z. Lawrence from the Kennedy School of Government at Harvard University and Lawrence Edwards from the University of Cape Town shed light on the subject during their talk at the Peterson Institute in Washington on Tuesday.

After conducting an extensive survey of empirical literature to date and, more importantly, carrying out their own in-depth analyses of the evidence, they concluded that rapid growth in emerging economies is part of the solution to the US economic problems rather than their cause. The conclusions contradict several popular theories on the negative impact on the US of its trade with developing countries such as China and India.

While many critics, including some economists, believe that the decline in manufacturing in the US has been caused by trade and "off-shoring" of jobs, the two argued that the decline reflects a shift in domestic demand away from spending on goods and faster productivity growth in manufacturing, where fewer workers are needed to maintain the same output.

That also seems to apply to the service representatives I had tried to contact.

According to the two scholars and co-authors of Rising Tide: Is Growth in Emerging Economies Good for the United States?, increased trade can cause "short-term pain in the form of job losses, lower profits, and the dislocation of people and communities", but trade and investment strategies that encourage growth in emerging economies will continue to benefit both the US and its trade and investment partners in the foreseeable future.

They argued that even if the US had had a balanced trade over the past decade, the share of manufacturing employment in the job market would have fallen considerably. The conclusion is that the US will not be better served by erecting new barriers at home or viewing foreign growth as damaging to its economic interests.

Over the years, people have been puzzled by the growing negative feeling about trade among Americans. Why are they not happy when Chinese, Indians and people from other emerging economies help them save money with cheaper manufactured goods?

Now we know, according to the economists, that the Americans have just picked the wrong guys to blame.

The author, based in Washington DC, is deputy editor of China Daily USA. Email: