Writing Assignment #2 Essay Example | Topics and Well Written Essays - 500 words - 5

Writing Assignment 2 - Essay ExampleThis is because absorption of U.s domestic demand for goods by exporters in China and Oil handle countries has widely suppressed domestic job creation in the U.S. In 2011 and 2010, the increasing trade deficit with China led to 2.8 million jobs displacement in the U.S (Bordon 2011). Other factors that sacrifice led to the shrinking of the manufacturing sector include rising technological changes, which have increased labor productivity, forcing firms to hire few workers.It is incorrect for the transmission line and Industry Council to blame imports alone for the international imbalance that have led to manufacturing crisis. Manufacturing crisis refers to the long-run trend of failing employment in the manufacturing sector in the join States. The macroeconomic policies that China has adopted of currency devaluation, increasing U.S dollar holding and, subsidies advancement to a range of industries are some of the major causes of the high trade d eficit. By 2011, China had accumulated $3.26 trillion in foreign reserves in U.S treasuries. In Chinese auto-parts industry, both domestic and foreign owned plants have received $27.5 billion in government subsidies. In 2006, 58.2 per cent of Chinas exports were from foreign firms operating in China. These firms are taking advantage of the grant policy and availability of cheap labor in China. China and other low wage rate countries enjoy availability of cheap labor, relative to their counterparts in the U.S and other developed countries. This is the area where they have a comparative advantage in manufacturing.Global economists have argued that the principal(prenominal) cause of the U.S. trade deficit is saving-investment disproportion as opposed to the common idea of Chinese Yuan devaluation (Hall and Lieberman 913). The economists propose that the countrys policy makers need to focus more on how to solve saving-investment imbalance. The main cause of the U.S. deficit is basical ly excess consumption and low saving rate among