[ExI] undercover at Walmart

[Stathis Papaioannou]

2009/2/14 Rafal Smigrodzki <rafal.smigrodzki at gmail.com>:

> ### This is indeed the case - or more precisely it takes 1.33 billion
> Chinese to make 3.251 trillion worth of goods and services per year,
> while it takes only 303 million Americans to make 13.84 trillion of
> stuff (statistics by Google). It is absolutely true that on average
> Chinese products and services are not any cheaper in terms of labor
> per unit of value than American-made ones, in fact, they are much more
> time-consuming to make, very roughly approximated by a factor of
> (13.84 x 1.33)/(3.251/0.303), you do the math. Since they take so much
> time to make stuff, they can't make as much stuff as Americans, and
> therefore they earn less.

In that case there would be no advantage in American companies
manufacturing things in China, since they would be able to so more
cheaply using the more efficient workforce in the US and saving on
shipping and other costs.

The GDP calculation assumes that the exchange rate is a fair measure
of the worth of one country's output relative to another. In the case
of the US dollar there are clearly other factors propping it up, such
as the fact that it is the world's reserve currency and the fact that
the Chinese would precipitate a disastrous drop in the value of their
substantial US dollar investments if they decided to pull out.



-- 
Stathis Papaioannou