Question Re: International Trade

[Mike Ellis]

Following our somewhat vigorous discussions on subsidies last week, I began to contemplate their relationship to international trade. It struck me that, in a very real sense, when we buy foreign goods we are in fact subsidizing their industry and economy. This may be good, may be bad, but either way we help build their nation's capabilities.

If you check the CIA fact book and other on-line sources, you will learn that the Western world's current industrial growth is on the order of 0.3% or so, while that of China is 30%. Their industrial capacity will double every 2.4 years at that rate. It appears inevitable that their industry will eclipse that of the Western powers, they have the advantage of more than a billion people and loads of natural resources.

At one time, Spain was the dynamo of world trade and production. They were supplanted by the English, who built an empire on their industry and economy. The 19th century was the "British century", they were supplanted by the USA toward the end of the 1800's and the 20th century was the "American century". It appears that a nation's significance on the world stage is intimately related to their status as a producer of goods - in every case, nations that lost their edge in production and focused on trade have been supplanted by nations with more vibrant industry.

Accordingly, I have been pondering a few questions:
(1) When we buy foreign goods, are we in fact subsidizing the development of the country that will take our place as the dominant world power - making the 21st century the "Chinese century"?
(2) What would a world under Chinese domination be like?
(3) Have we fulfilled the old Communist prophecy that "The capitalists will sell us the rope we use to hang them..."?
(4) How do we stop this power shift?

Thoughts?