China vs. US

I think this concept is right on.  The Chinese will simply adjust wages downward if their currency appreciates, enabling them to keep the low-cost producer advantage over US companies/workers/production.  It all comes down to supply/demand of labor, and they will always have us beat when it comes to the supply of low-skilled labor since their population is over 3x that of the US.

Meanwhile, our biggest source of competitive advantage is our know-how/IP and it’s easily ripped off by the Chinese.  It is a huge problem that we’re not getting paid for our biggest export/best source of valuation creation (or extraction from the rest of the world).  Until this problem is solved, the standard of living will continue to decline in the US.



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