Goods manufactured in China are gaining wider accceptance by western Internet shoppers and exports directly to western consumers through Internet players like Ebay and Alibaba are increasing at an accelerating pace that could radically impact global trade.
Sales, profits and employment of import firms, wholesalers and retailers in Europe and the United States will be squeezed.
A major shift in global trade patterns came earlier, starting in the eighties and nineties when ever increasing production volumes were outsourced to mostly China resulting in the closing down of manufacturing in Europe and the United States.
Hereby income was shifted from western low and medium wage earners to western billionaires and asian exporters. Western consumers ofcourse also benefitted to some extent but the big financial winners were without doubt western billionaire owners of import-, wholesale- and retailbusinesses.
Now evidently a second shift is taking place ”the outsourcing” of the wholesale and retail business.This second shift, however initially seductive to western consumers, will ofcourse, just as the first shift, also translate into more imports of CO2, joblosses and the undercutting of the wellfare states main components including taxes and the influence of democratic labourunions.
Low shipping rates in the postal system is small fry in this broader picture.
Replacing western production with Chinese ofcourse meant replacing western wages and western reasonably democratic labour unions with cut throat wages, more pollution and, if with any, state controlled labour.
Now this outsourcing trajectory is put on rocket fuel. It is high time to do some good strategic thinking.
Firstly and long overdue, western billionaires should be taxed at higher rates. Secondly, at least a modest hiking up of import tariffs on low wage and high polluting Asian exporters is unavoidable.The justifications are there but need to be better articulated and put on the table more robustly.
Finally , there is no getting round the laudable fact that China now also is an outstanding player in low cost renewables so a fine line has to be treaded.