Here's why we should care about what sounds like a bit of an obscure trip from some U.S. officials to Beijing this week.

They are going to meet to talk to their counterparts about a wave of Chinese goods flooding world markets.

China, obviously, has enormous manufacturing capacity and enormous machine behind it, and the output has gotten too large for the world to absorb.

The strategy by China, they reckon —and this is why the U.S. officials are going there— the strategy is demand at home is a bit weaker for them, so they pump up production and they ship the excess offshore.

The idea is they would build more resilient supply chains throughout the world, they'll get us hooked on cheap goods.

I mean, we're like crack addicts at a dollar store, aren't we?

Think about Temu, Shein, those types of websites. In the process they are squeezing other manufacturers around the world – including the United States, which is why they're sending a delegation to go and say “stop that please”.

It's also why you're seeing a tariff response from Europe, from the U.S., even some friendly Asian states like Indonesia are starting to put tariffs on China.

The goal seems to be to subsidize these manufacturers, flood the market around the world, build resilient supply lines, hook us in on these cheap goods and in the process, destroy the competition.

Here's why we should care about what sounds like a bit of an obscure trip from some U.S. officials to Beijing this week. 
They are going to meet to talk to their counterparts about a wave of Chinese goods flooding world markets. 
China, obviously, has enormous manufacturing capacity and enormous machine behind it, and the output has gotten too large for the world to absorb. 
The strategy by China, they reckon —and this is why the U.S. officials are going there— the strategy is demand at home is a bit weaker for them, so they pump up production and they ship the excess offshore. 
The idea is they would build more resilient supply chains throughout the world, they'll get us hooked on cheap goods. 
I mean, we're like crack addicts at a dollar store, aren't we? 
Think about Temu, Shein, those types of websites. In the process they are squeezing other manufacturers around the world – including the United States, which is why they're sending a delegation to go and say “stop that please”. 
It's also why you're seeing a tariff response from Europe, from the U.S., even some friendly Asian states like Indonesia are starting to put tariffs on China. 
The goal seems to be to subsidize these manufacturers, flood the market around the world, build resilient supply lines, hook us in on these cheap goods and in the process, destroy the competition.

A fresh and intelligent start to your day - catch the very latest international and domestic news developments, sport, entertainment and business on Early Edition with Ryan Bridge, on Newstalk ZB.

A fresh and intelligent start to your day - catch the very latest international and domestic news developments, sport, entertainment and business on Early Edition with Ryan Bridge, on Newstalk ZB.

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