Counter Argument: America is a diverse nation, which has built itself up through various struggles and valor. People of America need to have best of the resources as the land of dreams promises it, and government cannot let jobs to be outsourced to other nations. There should be more job opportunities American citizens inside the country at current prices rather than being outsourced to Asian countries, and then only, America can compete with China. There should be encouragement for American industry and more buyouts be introduced by the government to uplift it better performance. However, this whole function does not work in this way, as outsourcing has become the only inevitable solution to reduce cost from an industry’s point of view.
Refutation: American economy cannot solely rely on own employment and industry cannot function at current wage rate inside the country. Cost is one the key functions in terms of running an industry, and this cost is reduced significantly when services are outsourced. The idea is to compete with China and uplift U.S economy, and this practice is also to the benefit of American economy, slow but effective. This, and similar other processes are explained in this report.
INTRODUCTION
Trade and commerce have always been the strongest pillars on which human civilization has rested and flourished. Man learned the entity-gritty of trade at the very inception of human civilization, and since then it has been associated with mankind as one of the most inseparable aspects of it. Society is designed and has evolved in such a manner that it cannot be imagined without active existence of commerce. Such an active role of trade has earned it the highest weightage, and this is the reason man has tried to gain supremacy in this regard by gaining control over its means, and earning more financial resources and in turn, earn more power and control. (Art, R., 2010, p-376) What began at an individual level soon developed into a wider function, inculcating major organizations and even nations to be a part of it. Now, this function has become one of the most important functions speaking in terms of economic performance indicators and almost all world economies lay major stress on trade and commerce, trying to promote it and gain more control over its resources. In short, there is a greater than ever competition in regards of supremacy and no nation wants to be left behind. (Nanto, D., & Avery, E. C., 2006, p-29)
ABOUT ISSUE
Major issue in concern with this article is that relating to America and China, who, as one of the biggest and most influential economies of the world have long been at a cross road with each other and have been competing with each other over economic supremacy. China is a vivid nature, which has a rich culture and strong traditional base, and people of China, who have the biggest contribution in it economy have always been highly competitive. (Huang, Y., 2010, p-39) With China gaining major controls in terms of economic resources and venturing into world markets, there were many avenues which have opened up for it and for all those economies dealing with China, directly or indirectly. In the past few years the whole scenario has changed and China, being competitive enough, has turned the tables in its favor, and in a way has emerged as a supreme economic establishment. This whole development has added to the woes of already shaky American economy, which has seen some worse days in the past decade, and has taken over certain markets which were considered as American stronghold. (Ashley J. Tellis, 2013,p-116)
THE CHINA SITUATION
THREAT TO U.S.A
These economic reforms have been very useful from China’s point of view, as there has been much growth in terms of relations with other economies and has propelled growth of its economy. Actual growth of its resources and economy began in the nineties and has grown ever since. There have been strong ties of Chinese industry with those of Europe and it has been outsourcing products by manufacturing specified products instead of European companies. (Huang, Y., 2010, p-41) One of the key aspects of Chinese industry is the competitiveness it offers and the levels at which European standards are met and executed in its own facilities. In the past two decades or so, major international corporations have tied up with industries based in China and have their products manufactured from these facilities to cut down on cost. (Ashley J. Tellis, 2013) Cost is one of the strongholds of Chinese industry and it offers same products at a comparatively lesser price. Apart from cost, another major advantage that China offers it in its own home turf and this is in relation to wages and salaries. It is intriguing to know that even after offering highly competitive prices and low cost products to world industry, there has been an increase in wages in China, as most of the employees and workers in China have been satisfied and prospering along with China. According to survey conducted by European organization in 2012, it has come forth that Guangdong, which is one of the biggest export hubs in China, number of workers who are satisfied with their wages is higher than those in USA, which is alarming for American industry. (Scales, R., & Wortzell, L., 1999)
STRETEGIES SUGGESTED FOR AMERICA
INTRODUCING ECONOMIC REFORMS
Talking from an American point of view, it is very important to understand that there have been more than one causes attributed with economic shake, and turmoil which has led to shutdown of many industries, and has still not affected China in any way. America has always relied on it industry, which has been a key contributor in America’s supremacy world over and still continues to do so. For America, industrial revolution began a century earlier to that of Chinese industry, and major names and brands were established in the 19th century itself, who have gained control throughout the world. In the last hundred years, American industry has reached many milestones and these corporations have developed in size, outgrowing any other competitor. (Steinbock, D., 2010,p-351) However, this extensive growth has taken a great toll on its development any further, and has shaken the economy itself. One of the major reasons towards this development is that of cost involved in these corporations which has grown manifold, and to keep these companies alive involves huge amount of funds and financial support. There have been many cases, when popular and renowned American MNCs had to seek buyout from the government in order to sustain and stay the course, which has added to its woes, and has given Chinese industry new chance to grow. (Ashley J. Tellis, 2013,p-119)
COSTING REFORMS
Cost plays a very significant role in deciding course of any organization and when talking in terms of economy, it becomes all the more important and a key deciding factor. For any organization, saving cost is one of the most significant functions and a lot of effort is focused towards this direction, which is always seeking avenues to curtail this function. It is well known that China has a very cost effective model and has offered majority of products to other industries at international level, at much lesser cost, maintaining the same specifications and quality. (Art, R., 2010, p-368) This special feature of Chinese industry has attracted more and more support from American companies, who were facing hard days in the economic shake down and were looking for better avenues. According to certain surveys, it is shocking to find that many major industrial corporations of USA have been outsourcing their products from Chinese industry and have been supplying elsewhere. From cost point of view and taking into considerations, the cost graphs of the company, this is a very healthy option, considering the opportunities that growing Asian markets offer. (Huang, Y., 2010, p-37) On the other hand, it is a serious threat for USA who needs serious reforms in this direction in order to save its industrial stronghold. Major reforms are suggested for American government who needs to implement cost control and wage models as only buyouts do not serve the purpose. These reforms need to be implemented on a serious note, and they begin with cost control function, which is missing from US industry. (Nanto, D., & Avery, E. C., 2006,p-37)
PROMOTING PRIVATE PARTNERSHIP IN STRATEGIES
Major industrial corporations have always been independent in terms of decisions regarding cost and wage. To implement cost saving reforms, there need to be certain steps taken to control and audit cost function. In a certain way, American industrial corporations have enjoyed a bad name worldwide for pricing their products and services sky high and not control profit ratio, which is considered to be superficial. In America, this model is effective, as most consumers are of the view to purchase articles which have a higher price tag, and not compare actual worth. In these markets, there has been great amount of glamorization of sorts, which highlights certain products and companies through its media, films and what not. (Steinbock, D., 2010,p-258) This glamorization is widely followed by the masses, making corporations earning superficial profits and growing more than ever. However this uneven costing takes a toll during recession, like it did in the last ten years or so. During this period, when costs are greater than living cost and wages, customer starts to compare articles based on rationality and functioning, rather than glamour. It is one of the biggest reason there is demand for products with lower cost, giving Chinese products an opportunity to seep into US markets and invade them eventually. What is worse in this regard is that when most US companies start to look eastwards in terms of production and outsourcing, rendering millions of citizen jobless, further worsening the situation. (Scales, R., & Wortzell, L., 1999)
DEMOGRAPHIC INSIGHT AND STRATEGY
A rational evaluation and costing function initiated by US government is much needed towards this direction in order to tackle superficial cost and also account for better wages. When cost function is improved for several organizations, the most immediate effect it places is on wages, which are bound to up, provided these steps are implemented. Some serious steps are needed towards this direction and certain new independent bodies are needed to be formed with government and private participation, for revival of cost accounting function. These bodies have to take certain LLCs and corporations into loop to implement these functions, which not only consider cost, but also manage wage function and audit profits of major corporations in terms of wages and benefits provided. (Nanto, D., & Avery, E. C., 2006, p-18) For certain companies, zoning can be done to get better insight into their area of operations and demographic strategies can be made for their better functioning. America has always been a land of opportunities and has attracted millions of people from all corners of the world, to look for better living and opportunities. However, in this regard, Federal government has shown limited interest, and in a way has ignored the possibilities that its own structure possesses. Demographic survey of its industrial area suggests that its own citizens from foreign ethnic backgrounds have a bent towards working even at lower wages than what are normally prevailing. These independent bodies can work wonders in this direction, by collaborating between these citizens and industry that require certain skills, and training can be provided by the industry to those willing to work. This step can promote a huge cost saving function to major industrial units and eventually promote the retrieval of industry as a whole, competing with the likes of China. (Art, R., 2010, p-383)
INTERNATIONAL POLICIES
On international level, USA needs to introduce certain aggressive policies to curtail the Chinese supremacy and develop its own industry. To implement these policies, first it is very important to understand the whole scenario and capabilities of China. China has great proximities throughout the world and in the past two decades it has strengthened its ties wide most of the economies through trade and commerce. Apart from this, it is important to understand the Chinese government has taken personal interest in promoting industry, and has had dialogues with all nations who engage in trade with its industry. On the other hand, USA has failed to do so, and only the corporations have negotiated terms with participating nations, which has not shown favorable results. (Steinbock, D., 2010, p-349) China is known to provide extensive packages to its industry and promotes firms by extending vast loan facilities, which are relaxed in terms of getting them. USA also has to understand that Japan and Korea play a prominent part, if it has to curtail China. Japan has always been at loggerheads with China in terms of industrial competition and this nature can benefit American industry manifold, if policies are framed in such manner. (Nanto, D., & Avery, E. C., 2006, p-37) Another major player in emerging economies is India, which can serve as a great opportunity for outsourcing products and services in comparison to China. Certified improvement of its benefits and economy began in the nineties and has ended up since the time that. There have been strong ties of Chinese industry with those of Europe and it has been outsourcing things by amassing called attention to things instead of European associations. In the midst of the eighties, there was a change exhibited by Chinese government which opened up new streets, by changing money related methodology and building ties with distinctive economies. (Scales, R., & Wortzell, L., 1999)
CONCLUSION
Cost is an outstandingly imperative part in picking course of any affiliation and when talking with respect to economy, it transforms into all the more vital and a key focal component. For any affiliation, saving cost is a champion among the most discriminating limits and a huge amount of effort is focused towards this course, which is ceaselessly searching for roads to reduce this limit. It is overall understood that China has an astoundingly reasonable model and has offered lion's offer of things to distinctive business ventures at widespread level, at much lesser cost, keeping up the same subtle elements and quality. (Ashley J. Tellis, 2013,p-114) On the other hand, this sweeping advancement has taken an unimaginable toll on its headway any further, and has shaken the economy itself. One of the critical reasons towards this change is that of cost included in these organizations which has ended up perplexing, and to keep these associations alive incorporates huge measure of stores and cash related sponsorship. Chinese industry and it offers same things at an also lesser expense. (Steinbock, D., 2010,p-360) Differentiated from cost, an exchange noteworthy inclination that China offers it in its home turf and this is in association with wages and recompenses. It is charming to understand that much in the wake of offering exceptionally forceful expenses and simplicity things to world industry, there has been an addition in wages in China, as most of the specialists and pros in China have been satisfied and flourishing close by China. (Art, R., 2010, p-364) These money related changes have been uncommonly important from China's point of view, as there has been much advancement the extent that relations with diverse economies and has pushed improvement of its economy. After a short time the world contemplated the open entryways and choices that China offered and level of charges and supplies, which it could grasp. From cost viewpoint and taking into examinations, the cost graphs of the association, this is a to a great degree sound option, considering the opportunities that creating Asian markets offer. Of course, it is an authentic peril for USA who needs bona fide changes in this bearing to extra its mechanical forte. (Nanto, D., & Avery, E. C., 2006,p-23)
REFERENCES
- Steinbock, D. (2010). China’s Next Stage of Growth: Reassessing U.S. Policy toward China. American Foreign Policy Interests,, 32(1), 347-362.
- Nanto, D., & Avery, E. C. (2006). The Rise of China and Its Effect on Taiwan, Japan, and South Korea: U.S. Policy Choices. CRS Report for Congress, 2(1), 1-43.
- Ashley J. Tellis (2013) Balancing without Containment: A U.S. Strategy for Confronting China's Rise. The Washington Quarterly, 36:4, 109-124.
- Scales, R., & Wortzell, L. (1999). The Future U.S. Military Presence in Asia: Land-power And Geo-Strategy of American Commitement. U.S War College Journal.
- Art, R. (2010). The United States and the Rise of China: Implications for the Long Haul.Political Science Quarterly, 125(1), 359-392.
- Huang, Y. (2010). Debating China’s Economic Growth: The Beijing Consensus or The Washington Consensus. Academy of Management Perspectives, 1(2), 32-49.
