If China Really Wants to Buy $200 Billion More Stuff From Us, We Can Make It For Them

The New York Times warns that concessions by the Chinese in trade negotiations are probably a mirage:

Chinese negotiators are preparing to offer the administration a deal to buy up to $200 billion worth of American goods….But the Chinese promises would be largely illusory, economists cautioned….“The short answer is these are unrealistic numbers,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics….“It would even be a stretch to get it to $50 billion,” Mr. Bown said.

That is because the United States economy is already running near its full productive capacity, meaning it would not be able to produce enough new goods to meet Chinese demands, especially in the short term.

Hmmm. Dean Baker has some thoughts about that. And me? Naturally I have a chart:

Manufacturing currently contributes about $2 trillion to GDP. That would go up about $150 billion if capacity utilization merely returned to its 1988 level—which is obviously not impossible—and it would require adding a little less than a million workers to the manufacturing sector. Assuming that some of them came from other jobs while others rejoined the workforce, it would probably mean an increase in the employment-population ratio of about one percentage point. That would put us at the same level we were at for 20 consecutive years until the Great Recession. And this would happen over the course of several years, not overnight.

That’s a big lift, but there’s nothing literally impossible about it. And the funny thing is that the Chinese might actually be serious about this offer. They might welcome an excuse to steer their economy away from being so dependent on the US as an export market.

In the end, I suppose I doubt that. Still, the idea that our economy is so maxed out that it couldn’t produce an extra $200 billion worth of goods if China wanted to buy them is a pretty dubious proposition.

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate