Why is the U.S. heavily reliant on China for many products? Is it possible for the U.S. to stop buying from China and produce these products domestically?

Xiaoming Guo
3 min readAug 19, 2024

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Q: Why is the U.S. heavily reliant on China for many products? Is it possible for the U.S. to stop buying from China and produce these products domestically?

A:

We all know banana publics in South America. Even though we undergo huge inflation, the price of bananas is still relatively low. Yet nobody complains that the US relies on South America for bananas.

So to understand this issue, we must remember that today’s capitalism is the financial monopoly capitalism. The capitalists in the West after five hundred years of imperialism and colonialism exploiting the Global South, don’t need to produce everything to have a luxurious life. The Global North can just sit on its accumulated huge capital to “finance” the global economy so it can live on interest from the capital. That’s the world economic order after WWII. The US industry was not offshored to China, it offshored first to Japan, then Japan offshored the manufacture to South Korea, Taiwan, Singapore, and Hong Kong, and finally the Four Tigers offshored manufacturing to China. This process of offshoring manufacturing has already been undergone for half a century.

Since 2008, since Obama, the US has tried hard to bring manufacturing back to the US but filed. If Americans can have white-collar jobs, why let white-collar jobs become blue-collar jobs? In the 1970s, when the US offshored manufacturing to Japan, the US was very happy to celebrate the post-industrial society. The Global North can sit in the office and let the Global South toil in sweat. Since WWII, the Noth-South economic order has been implemented with Bretton Woods institutions, such as the World Bank, IMF, and WTO.

After China entered WTO, the North-South world order was condensed as Made-in-China-Comsumed-in-America. For every dollar of made-in-China one paid in shopping, only fifteen cents go to China, other eighty-five cents go to Japanese patents, European design, American brands of marketing and logistics, and retail services. The US went to post-industrial society when the service GDP was higher than the manufacturing GDP.

Capital floods in Fintech, technology advancement is first used in finance and military industry. See the green portion at the upper-right corner of the graph above? it includes the military industry.

Service is hard to offshore. One cannot use other countries’ transport for transit, and going to other countries for health services is rare. If the US can offshore service, it will, such as offshoring telemarketing to India and the Philippines.

When Americans consume, they pay more for financial services than for real goods and services. When they visit doctors, they pay more for insurance services than the medicine and doctors. When using a car for 20 years, they pay more for insurance than the purchase of the car. American consumers cannot escape the financial services, the insurance, the mortgage, etc. That’s financial monopoly capitalism.

It is letting the Global South do the labor, don’t blame the Global South for “stealing the jobs”. You cannot eat the pie and have the pie. You cannot keep the jobs without doing the jobs.

After the failures of onshoring manufacturing, the US resorted to nearshore. Such as NAFTA to have manufacturing in Mexico. The US also resorts to friendly shoring, and encourages imports from ASEAN and India. But what’s the difference? The manufacturing is not going back to the US, and it is China’s turn, following Japan and the Four Tigers, to offshore its manufacture to India and ASEAN.

The US cannot help but feed the greed of Wall Street and the military-industrial complex. It is capitalism, The political system is by the capital, for the capital, and of the capital. It is the capitalist system and the capital becomes a monopoly.

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Xiaoming Guo

Ph.D. from McGill University. MBA from Queen’s University. A patriot Canadian believes that a good relationship with China serves our best national interest.