Egypt Air Swot Analysis free essay sample

But U. S-Chinese trade relations have always been somewhat uneasy; for many years. All this huge Chinese economic power, people think is due its unfair trade practices with rest of the world. China’s entry into the WTO was supposed to bring it into compliance with an enforceable, rules-based regime, which would require that it open its markets to imports from the United States and other nations. However, the core of the agreement failed to include any protections to maintain or improve labor or environmental standards. As a result, China’s entry into the WTO has further tilted the international economic playing field against domestic workers and firms, and in favor of multinational companies (MNCs) from the United States and other countries, This has increased the global â€Å"race to the bottom† in wages and environmental quality and caused the closing of thousands of U. S. factories, decimating employment in a wide range of communities, states, and entire regions of the United States. We will write a custom essay sample on Egypt Air Swot Analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page So many people around the world always wonder and had a big question that needs to be answered, that question is the trade relationship that exists between US and china. This paper will encompasses the general idea of trade relationship between these two countries and discuss in details the impact and political benefit that arise between them. Including how the Chinese export and currency become unfair practices, and how it affects the American economy by cursing a lot of tension and argument because US is suffering from trade deficit that lead to displaced several American jobs and so on. We will also get to see if china manipulating its currency is in their best interest or not and advantages and disadvantages that china faces when they trade with US, as we are going to see both of them gain from this relation for example: the Chinese are the large exporter to the US with a cheap goods that make that make Chinese currency stable and on the other hand this is keeping inflation lower in the US. All this trade tension and unfair practices are the reason why for so many years the US-Chinese relation is somehow strange and this at times opposed trade agreement between the two nations. Because contrary to the prediction china’s entry into the world trade organization (WTO) has failed to reduce its trade surplus with the united stated or increase the overall US employment. But it turns out not like that it gives a negative side. Statement of the problem; â€Å"The growing Chinese export to the US cost millions of US jobs displaced with net job loss in every stated†. For many years this has been a key issue for many American leaders because the growing of unemployment. One economist (Robert E Scott may 2, 2007) said the rise in the U. S. rade deficit with China between 1997 and 2006 has displaced production that could have supported 2,166,000 U. S. jobs. Most of these jobs (1. 8 million) have been lost since China entered the WTO in 2001. Between 1997 and 2001, growing trade deficits displaced an average of 101,000 jobs per year, or slightly more than the total employment in Manchester, New Hampshire. Since China entered the WTO in 2001, job losses incr eased to an average of 353,000 per year—more than the total employment in greater Akron, Ohio. Between 2001 and 2006, jobs were displaced in every state and the District of Columbia. Nearly three-quarters of the jobs displaced were in manufacturing industries. Simply put, the promised benefits of trade liberalization with China have been unfulfilled. While it is true that exports support jobs in the United States, it is equally true that imports displace them. Most economists agree that Chinas competitive pricing is a result of two factors: A lower standard of living, which allows them to pay lower wages to workers, and an exchange rate that is partially set to be always priced lower than the dollar. Trade has had a dramatic effect on U. S. workers and the domestic economy. †(Kimberly Amadeo 20, 2011) fond that The largest share of manufacturing jobs lost or displaced were in computer and electronic parts, accounting for more than 44 percent of the $194 billion increase in the U. S. trade deficit with China between 2001 and 2010. In 2010, the total U. S. trade deficit with China was $278. 3 billion, of which $124. 3 billion was in computer and electronics parts. This growth of the trade deficit resulted in the loss of 909,400 jobs in these industries. When jobs are lost to trade deficits, they dont just cause unemployment, they cause a reduced  median income when American workers lose productive good-paying manufacturing jobs and have to take less-productive lower-paying jobs in other sectors. There is a simple solution here. The United States could impose a WTO-legal scaled tariff to balance trade. Purpose: The goal of the study is to examine the unfair trade practices and economic and political benefit between US and china. China’s booming economy offers enormous opportunities for U. S. manufacturers, but these companies are facing daunting challenges, including unfair trade practices by the Chinese, such as currency manipulation, dumping and quotas. The US trade representative (Ron Kirk 2009) accused china of unfair trade practices; Ron Kirk said china had imposed quotas, export duties and other costs on raw materials used in the production of steel, chemicals and aluminum. In effect, he said, China was putting its thumb on the scale and giving Chinese manufacturers an unfair edge â€Å"Trade has to be fair,† Mr. Kirk said in a news conference in Washington. â€Å"If you’re going to do business with the United States, you’re going to have to play by the rules. † He said that restrictions on exports of bauxite, zinc, yellow phosphorus and other raw goods make it more expensive for manufacturers to produce finished goods and threatened thousands of jobs in industries already rocked by the global recession. Significance of the study: The trade issues between china and US are important. Because for so many years the trading relationship has raised several policy concern, by accusing Chinese of unfair trade practices that include; currency pegs, dumping, hacking and copying people’s ideas. All this lead to a Chinese success and advantage to export more good to the rest of the world particularly US, at the same time US play an important role in a global trade because it has economics resources and asset that most of the Arabian and Asian countries benefit from, so if the American economy is affected the effect will would lead to a severe financial crisis. This means the facts surrounding this research will benefit so many companies around the globe by knowing the unfair trade practices Chinese are delivering to the global market and what are the majors to take to prevent this unfair practices. The research questions for this study are: 1- What are the unfair trade practices that china are doing to harm the US economy? 2- What are the impact and benefit for both US and china in this relationship? 3- Is there any significant major that Chinese take to help stabilize their currency? Does the Chinese currency Yuan or the Chinese import to the US the main cost of American unemployment? Literature review: The trade relationship between china and US include the benefit s and the impact side. So in order to see the full picture of this relationship there are some key majors that need to be explain, those consist of unfair trade practices by Chinese, balance of payment between the two countries: (foreign direct investment, import and export, and trade balance). another key areas are exchange rate the currencies, deficit and unemployment all this will be elaborated in details in the upcoming paragraphs. First does Chinese economy became powerful in the world by unfair practices? One CBIA economics (Peter Gioia April 2005), said in his report that: John Angler, president and CEO of the National Association of Manufacturers (NAM), in February called on President Bush to take action against China to show that we are serious about these issues. Angler urged Bush to gather support from Canada, the European Union, Japan and other trading partners affected by China’s unfair trade practices, and to initiate a World Trade Organization (WTO) case against them. This would underscore the magnitude of the offenses and help preserve our manufacturing base, which is the foundation of our standard of living and our economic and national security. Dumping; Trade practices that involve dumping are considered â€Å"unfair† because they interfere with or distort free market economy principles. A research (Francis tanczos spring 2008), Due to the large volume of its exports, it is of little surprise that China has been the primary target of anti-dumping measures. The sheer number of antidumping cases against China has made it apparent that China is perceived as a threat to many other WTO members: over the past two decades or so, more than 30 countries have opened about 600 anti-dumping cases in the WTO against 4000 different types of Chinese products. Over this same two-decade period, the US had made 110 petitions and 68 orders against Chinese goods topping the list among the US’s trading partners for such measures. Currently, 25 percent of all WTO antidumping investigations are directed at China. Although the WTO has reported an overall decrease in anti-dumping investigations and measures, China remains the most frequent subject of new investigations. For all of these actions taken against China? In order to effectively show the nature of this US-China trading relationship, it is necessary to focus on a few trade sectors in particular. Trade in food and agriculture is especially notable because it incorporates the farming and growing constituents in the US, who often launch petitions for investigations. Agriculture products also make up about 10 percent of US anti-dumping cases against China. In general, trade between the US and China enormously important; the countries have a trade volume of well over $200 billion. . Moreover, the US trade deficit with China is larger than ever. To shed some dumping procedures in the US and the case law and, at the same time, to examine the modus operandi of stakeholders in US domestic industries. In particular, it is necessary to consider why the US still treats China as a non-market economy, the advantages and disadvantages of such a practice, and what the future holds for China in terms of being recognized as a market economy. While some may be happy because even the US does have a benefit in this trade relation, (US/China media brief), stated that for the last fifteen years, China’s cheap products have kept inflation down for Americans while its savings have financed American consumption. While most experts agree that this scenario cannot continue, (see â€Å"foreign currency reserve†), it is still in the United States interest to have an economically strong China. Between 2003 and 2005, China contributed 13. 8% of the global GDP growth, second to America. America actually needs China to be strong, as strong Chinese growth that is fueled more by domestic spending than exports can actually help prevent the world economy from sliding down too drastically should the U. S. fall into an economic recession. This, however, depends on China continuing to remain economically strong. If, however, China’s bad loans and debt come calling during the same time or an unforeseen disruption to the Chinese economy occurs, then it is possible that the two main growth engines of the last decade will both be stalled at the same time. Currency: Does the under value of Chinese currency Yuan, one of the major factors that cost the American deficit and unemployment? A sharp rise in China’s Yuan currency might cut the US  trade deficit by as much as one third and create enough American jobs to put at least a modest dent in the unemployment rate. Then again, it may also lead to a destabilizing spike in Chinese unemployment and spark a trade war that drags the global economy back into a deep recession, these are the conflicting forces US lawmakers must consider as they decide whether to pass a bill which would pressure Beijing into letting its currency rise more rapidly. A paper by IPC (government relation committee April 2, 2008) says U. S. policymakers, business and labor representatives have charged that Chinas currency is significantly undervalued vis-a-vis the U. S. dollar (even after the recent revaluation), making Chinese exports to the United States cheaper, and U. S. exports to China more expensive, than they would be if exchange rates were determined by market forces. Further, they argue that the undervalued Yuan has contributed to the burgeoning U. S. trade deficit with China (which reached $233 billion in 2006) while hurting U. S. anufacturing in several sectors that are forced to compete domestically and internationally against artificially low-cost goods from China. Additionally, some analysts contend that Chinas currency policy induces other East Asian countries to intervene in currency markets in order to keep their currencies weak against the dollar in order to compete with Chinese goods. But on the other hand the Chinese officials a ssert that their currency policy is not meant to favor exports over imports, but instead takes an approach many countries employ to foster economic stability through currency stability. They express concern that floating the Yuan could spark an economic crisis in China and would especially be damaging to its export industries at a time when painful economic reforms (such as closing down inefficient state-owned enterprises) are being implemented. A researcher ( Nasos Mihalakas January 11, 2011) on his report said In the depressed conditions caused by the financial crisis, China’s dollar peg poses two main threats. First, it limits U. S. recovery by overvaluing the dollar in key Asian markets and therefore artificially raising the price of U. S. exports. In theory, to be sure, the United States could deflate its currency to regain competitiveness against Asian currencies, but deflation is out of the question for such a highly leveraged economy. )   Second, with inflows of hot money straining the system of sterilization to breaking point, the RMB-dollar peg is now contributing to a dangerous overheating of China’s economy; appreciation of the currency w ould complement the recent increases in bank reserve requirements, helping to cool down the rampant over-investment in manufacturing capacity and urban real estate. A report by (First post economy Oct 5, 2011), the debate over whether China’s currency is undervalued is essentially closed. Beijing readily acknowledges that a gradual Yuan appreciation is in its best interest, and it has allowed the currency to rise by about 6. 5 percent since June 2010. â€Å"The Chinese will scream, but the only times they’ve let their currency rise is when they’re under pressure from the outside, so we should go ahead and do it,† said(Fred Bergsten), director of the Washington-based Peterson Institute for International Economics and a long-time critic of China’s currency policy. He estimates that a 20 percent rise in the Yuan would reduce the US current account deficit by $50 billion to $100 billion. A more extreme move, say 40 percent, would translate into as much as a $200 billion reduction. Therefore, the U. S. needs deflation of its currency, but the world economy also needs rebalancing. Many U. S. experts believe that the RMB is 25% to 40% undervalued, and members of the U. S. Congress have demanded action from the U. S. administration. According to experts, elimination of the Chinese misalignment would create as many as half a million