The growth in China's exports has slowed. In October, its U.S. export/import balance showed a $17.5 billion surplus, a record produced not by soaring exports but by falling imports. The country, fearing repercussions of a downturn in spending here and abroad, announced a $586 billion economic stimulus program to prop up its slowing economy.
While I'm not a expert on foreign trade, I would like to send along an idea for the consideration of the Chinese government. If you really want to stimulate Chinese manufacturing and export, why not use that money to send each of the 300 million Americans an $1,800 gift card to Wal-Mart (NYSE: WMT)?
Imagine the consequences, all good for the Chinese economy. Chinese factories will once again be busy making plasma screen TVs, basketball shoes, thongs and wax lips. Chinese ships will again carry jam-packed cargo containers to the U.S. And, as Americans snatch up the Wal-Mart goodies, the stimulus cash will come flooding back to China. Then they can loan it back to us so we can give our own people a stimulus package and buy yet more foreign goods.
The odd thing is, the idea isn't all that crazy. But it should be.
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Reader Comments (Page 1 of 1)
11-11-2008 @ 4:00PM
Kent said...
Spendid idea, but don't think it'll work. China is not a captive supplier of Wal-Mart. It's the otherway around. Without China, Wal-Mart's pricing strategy falls apart for the time being. China knows this and probably expect us to send them gift certificates instead. U.S. government instead should get tough on China and create an off-exchange rate table assessing the true value of the Huan and use that surplus for our economy. But, the question is : does Wal-Mart have the clout to fight it? We need political leadership to do this until China is reduced to a level playing field. This situation is just as bad as our oil imports.