May 2017 – CCJ, Volume. 2, Pg 10-20
What Is at Stake in China-US Relations? An Estimate of Jobs and Money Involved in the Bilateral Economic Tie*
by Farok J. Contractor
*1 A version of this article is published as Contractor, Farok J. What is at stake in China-US relations? an estimate of jobs and money involved in the bilateral economic tie. Rutgers Business Review, Vol. 2, No. 1, pp. 1–22 (2017). And an excerpt was published in YaleGlobal Online as “Disrupting US-China Relations Will Incur High Costs.” February 28, 2017.
Alarm bells are ringing about President Donald Trump’s pronouncements against China as well as his threats to impose a 45% tariff against Chinese imports after declaring the country to be a “currency manipulator.” For all the concern, however, I have not seen a single calculation of the dollar costs, or impact on jobs, if Trump’s policies were actually implemented. This article is an attempt to estimate the answers to the following questions: In the event of a break in the bilateral relations, How many jobs in the US and China are at risk? What would be the extra purchase price for consumers if, hypothetically, imports from China were replaced by US manufactured products? Is it possible, or even likely, to “bring back” production from China to the US? What would be the consequences if China retaliated against US-made products and services? What if China pulled out its $1.2–1.8 trillion investment in US securities? And what about American companies’ investments in China?
Farok Contractor is Distinguished Professor of Management and Global Business at Rutgers Business School, a Fellow of the Academy of International Business (AIB), and author of nine books and over 100 scholarly articles. He holds a Ph.D. (Managerial Science and Applied Economics) and an M.B.A. from the Wharton School, as well as two engineering degrees (M.S. in Industrial Engineering, University of Michigan, and B.S. in Mechanical Engineering, University of Bombay). He has chaired or been on the supervisory committees of 17 doctoral dissertations on International Business topics. He has taught at the Wharton School, Copenhagen Business School, Fletcher School of Law and Diplomacy, Tufts University, Nanyang Technological University, Indian Institute of Foreign Trade, XLRI (India), Rutgers business programs in Beijing and Shanghai, Lubin School of Business, and Theseus and EDHEC in France. He has also conducted executive seminars in the US, Europe, Latin America, and Asia. Farok Contractor’s research focuses on key issues in International Business, such as corporate alliances, outsourcing and offshoring, valuation of intangible assets, the technology transfer process, licensing, and foreign direct investment. His papers and books have been cited over 9,000 times, and he is among the top-ranked contributors of scholarly papers in the field. He has served Rutgers as Department Chair, CIBER (Center for International Business Education and Research) Research Director, Ph.D. program coordinator, and other key school and university initiatives. He writes a blog for managers, students, policy makers, and educated laypeople covering International Business issues at https://globalbusiness.blog