G.E. Hearts China

G.E. Hearts China. Yes, the G.E. that is in the White House is literally giving away the farm to China through joint ventures on very advanced technology, this time in advanced avionics instrumentation. G.E. literally says they are all into China.

GE avionics will be on board a new Chinese commercial airliner that is likely to become a rival to aircraft produced by U.S.-based Boeing and Europe’s Airbus.

G.E. isn't alone. Joint Ventures where the manufacturing, jobs and profits occur in China, have grown at an alarming rate. From the USCC hearing on Chinese State-Owned Enterprises and U.S.-China Bilateral Investment, total foreign direct investment inflows (which includes joint ventures) to China was 6.1% of the world's foreign investment in 2009. China receives the largest FDI share of all emerging nations. According to Economist Robert Scott:

Foreign Invested Enterprises (both joint ventures and wholly owned subsidiaries) were responsible for 55% of China’s exports and 68% of its trade surplus in 2010.


china fdi
graph from USSC Robert Scott Testimony


U.S. firms investing in China such as GM, Motorola, Johnson & Johnson, and the Blackstone Group, and large retailers such as Walmart, Target and CVS benefit directly or indirectly from China’s currency manipulation and subsidies.

In other words, while America is in utter crisis, with no end in sight of record unemployment, G.E. and most other U.S. multinational corporations are busy helping China overtake the United States as the world's #1 economy and making damn sure China gets rich and has plenty of jobs! Gets worse, it seems Obama's jobs plan is all about offshoring more jobs!

Take a look at this screenshot of Chinese engineers attacking the University of Alabama servers. Literally China is training engineers to commit cyber-attacks on the United States and there is now a youtube video to prove it.


china hack


A Chinese military propaganda video may have let slip something the West has suspected for a long time: that China is attacking U.S. targets electronically.

Think the reason G.E. gives China access to advanced technology, know-how, secrets are those tax incentives to offshore outsource your job, so touted as the cure all by politicians to the great U.S. jobs crisis?  Not so shows Tax Journalist David Cay Johnson:

Washington politicians say high corporate tax rates are driving U.S. companies to invest offshore where tax rates are lower. But that is not General Electric’s experience.

GE’s disclosures show that over the last decade it paid much lower tax rates in America than offshore, just the opposite of the Washington political mantra. Even more puzzling, the U.S. corporate giant chooses to take more of its profits in other lands despite the higher tax rates there.

Given that GE has a roughly 1,000-person tax department dedicated to paying as little as possible in taxes, what the disclosures show is that something other than tax policy is driving GE’s business decisions.

The law gives companies a great deal of latitude in deciding how to arrange where they report profits from multinational transactions. GE won’t elaborate on why it takes so much of its profit in higher tax jurisdictions offshore.

While G.E. tries to claim they're all good with all sorts of legal protections, China is notorious for stealing intellectual property, trademark infringement and copyright violation.

G.E. typifies all that is wrong with the United States. Seems they would sell their own mothers for short term profits. On a macro scale, MNCs, acting in concert, are selling out America. Bottom line, MNCs bottom lines these days sure are none too good for America's.



problem not China it's in the mirror

This blog has done a good job in bringing out the implications China economics has for the American worker and economy in general. However, it fails in the political analysis. The problem cannot be laid at Obama's feet. This not something that just started in the past two years. Moreover, all economic relations with China are 'governed' by treaty and law. Which makes the congress the ultimate arbitrator of China relations. They past the laws and approve treaties. And, all members of congress are elected by a majority of some group of citizens.

In short, the American people have the congress and President they want and, by the force of logic, the laws, treaties and, more generally, the economy they voted for. As long as we spend magnitudes more time watching, reading about and analyzing sporting events than what OUR elected officials are doing, we will suffer the conseques of our follies.
If Americans want know what their problem is, they need only look in the mirror!

Yes but ...

Yes, we do as a nation have the means to solve our problems. But our solutions will impact other nations -- if we ever get around to effectively demanding government in our own enlightened self-interest.

Scroll on down and check out the comments on joint ventures.

One party, the Money Party, means no choice

anonymous drive by said: In short, the American people have the congress and President they want ...

Not so. When it comes voting for Congress or President, Americans don't even get a decent choice. Both parties are corrupt, driven for campaign donations by catering to business and special interests.

I am already disgusted that it highly likely Americans will have no decent alternative in the next presidential election. Getting to choose between Obama and the Republican nominee is no choice - they both are owned by Wall St.

So Americans will either not vote or vote for the lesser of the two evils.

No, Americans do not have the Congress and President they want ... they never even had a chance.

Freedom -- use it or lose it!

"Americans will either not vote or vote for the lesser of the two evils." -- Anon. Drive-by

Maybe. Maybe not.

But for the Perot experience, we would have to believe that Americans "never even had a chance" ... and that Americans never will have a chance.

I think Americans had a chance when Perot was running in the Reform Party in the 1990s.

Americans can accept their powerlessness or ...

Fight for fundamental reforms in States and congressional districts

At least, Americans can give 'em hell ...

Economy reform starts with Congress NOW

Freedom -- use it or lose it!

Solution to the American Economic Depression

There is an easy answer which would quickly solve the American Economic Depression of 2010 with no downside RISK.

No hits to the unemployed American taxpayers.
No stock market crashes.
No foreign diplomatic issues.
No bailouts from the federal government vaults.
No bank runs.
No riots.
No bureaucracies.

See LINK to Information Technology Business Edge Magazine.
HOPE for solution of our national economic problem is in the READER’S COMMENT which follows. . .


Nodelman's bit (or byte) tax

ITBusinessEdge.com article ('No Easy Answers on Offshoring'), published 16 February 2009,  is a description of the electronic outsourcing trend and of some economic problems created by that trend. In general, the article (posted by blogger Ann All, a business reporter specializing in ATMs and editor of ATMmarketplace.com), is pretty much without significance today in 2011. Yesterday's news. "Everybody knows."

"No easy answers"? Okay. What about proposals for difficult or challenging solutions? That's where Walter A. Nodelman comes in. Nodelman suggests a bit tax -- one bit (one eighth) of 1¢ on each electronic bit as it enters or leaves U.S. jurisdiction or, as Nodelman puts it, 1¢ per byte.

Nodelman also proposes unilateral withdrawal from all the FTAs. That's a little puzzling to me, because I would have thought that an advantage of the Nodelman tax would be that it could be conforming to WTO standards. Yes, it would probably involve defending ourselves in what passes for 'litigation' in the WTO quasi-judicial system, but the beauty of the idea is that there is no doubt that the federal government has the authority to tax electronic communication across our borders.

Nodelman's idea is similar to the concept of a 15% Across-the-Board Tariff justified as a charge for using U.S. ports (including air and land ports of entry) to access the U.S. infrastructure. IMO, these charges (fees, taxes, tariffs) are not ipso facto irreconcilable with WTO standards. If they are, then the USA is hardly the only nation in contempt of the WTO system.

The reason this these charges (fees, taxes, tariffs) could be allowable is that the charge is equitably applied across the board. In the case of a charge for port use, that would be imposed even when US products are reimported into the US, so there is no discrimination based on country of origin. Similarly, Nodelman's bit or byte tax is a charge levied to pay expenses involved in maintaining electronic communications systems within the USA.

The concept is similar to charges that many nations with medical systems or medical insurance (open to all) charge or have charged  immigrants. No one has suggested that such charges are contrary to globalism, although they would never be allowed in the EU, which requires an adequate medical care safety net for any country that applies for EU membership. (The systems vary greatly but must meet EU standards, and the same is true for labor standards.)

The objection that Robert Oak raises to all such plans is that they would inevitably involve us in trade wars that would increase the price of petroleum imported into the US economy -- which would tank US domestic producers. However, Robert Oak thinks that we could get away with a Value Added Tax (VAT) scheme. It's amazing that Canada and many other nations have VAT, but for all we hear from our corporate media, we 'yanks' have never heard of the concept. Meanwhile, our effective at-border tax runs somewhere between 1% and 2%, whereas China is about 20%.

The question is this: Does our Congress -- not all of them, but enough of them to make the difference -- work for us or for our foreign competition?


The currency mercantilist system of international trade today is characterized by trade barriers. That's the game.

The now widely-acknowledged global Second Great Depression is proof that the WTO system of finance capitalism fosters social instability and is unsustainable.

Call it a 'recession' if you want. What it is!

BTW: There's a comment at the ITBusinessEdge.com article to KeepAmericaAtWork.com. It's faulty to me that organizations such as KeepAmericaAtWork while exposing the problems, fail to make any use whatsoever of words 'tariff' or 'VAT'. What's the point? Sometimes what isn't mentioned reveals more than what is loudly proclaimed.

Nodelman's tax is almost unimaginable because of the amount of the tax revenues, running probably into $$$ gazillions. However, I agree that criticism or condemnation of outsourcing and off-shoring, without specific reform proposals, is useless.

Economy reform starts with Congress NOW

China Joint Venture

I though China required all foreign companies operating in China to establish joint ventures? Imagine if the US govt demanded such a policy.

China JV, changed in the 90's, Economist Ha-Joon Chang

Although finding out the rules is nebulous, although I am not an expert in setting up JVs and other businesses in China! Seems they condition a JV requirement on whether they want to capture that particular sector or not!

Worse, China is demanding indigenous innovation, i.e. they are claiming they will only recognize intellectual property natively sourced. uh huh.

No kidding China is smart as hell and that's why they are going to be #1 in a matter of little over a decade.

Gez, with the way the U.S. plays it's hands, I really want in on that poker game!

You might enjoy this lecture, titled Why the World Isn't Flat by Economist Ha-Joon Chang. This talk is awesome because he's screamingly funny yet goes into great depth on the history of trade....

it blows apart this entire B.S. of "free" trade through history and also what China is doing right now.

Ha-Joon Chang Lecture (link).

Walter responding to OkeyDokey

Rebuttal to some of the objections to a Per-BYTE-Tax can be found in the COMMENTS at the following 2 LINKS....


And read my rebuttal arguments to objections raised by “Anonymous”...

It is argued that a very simple no tax-code one cent per byte is an excessive cost. To me, excessive IS GOOD.
My goal is not trying to generate dollars of tax income. My idea is to induce General Electric and MULTI-SOVEREIGN corporations to bring America's JOBS back to America's WORKERS and to do that solely to avoid paying an “excessive tax”.

I am sure that you know that with the OFFSHORING of all of America's high tech jobs and America's manufacturing jobs, and America's state government jobs, there is no Federal Withholding Tax going to my government. No employer Social Security fund payment (although OFFSHORERS still expect to collect Benefits). No Medicare funding. No Unemployment Compensation tax. No employee Group Health Benefits. No Workmen's Compensation coverage. No OSHA. No EOE. No ADA. No vacations. No Minimum Wage. No Minimum Age. No Sick Leave. No Unions. No Family Leave. No environmental protections for clean air and clean water. No overtime on the 41st hour. No state income tax on payroll, when there is no payroll.

The "excessive TAX" is intended to be costlier than these other American payroll expenses. That is the goal.

no more links Walter

you're lucky we allow moderated anonymous comments but this link to a link to a link is not ok.

If you have something to say, write it. Next "link" to read your "comment" won't be published.

Good rebuttal

Thanks for clarifying your views. Agreed on the fundamental problem.

More from 'America is GE's tax haven'

Checking out David Cay Johnston's current blog --

'America is GE's tax haven'

Excerpted for review purposes from Johnston's Reuters blog (23 August 2011) --

[Johnston on trend over the past decade]

In 2001 GE’s American tax rate was a third higher than its foreign rate. Its American corporate income tax rate was 28.6 percent, compared to 21.1 percent on foreign profits. ....  In every year since then, GE’s domestic tax rate has been much smaller than in 2001. It reported negative tax liabilities in four of the next nine years.

Offshore, however, GE reported a positive tax rate every year, always in double digits.


[And here's Johnston on GE's ROI from campaign contributions]


These facts all raise the question of whether our elected leaders in both parties will stop memorizing talking points and get to studying data points so we get reality-based tax policy. That means paying attention to nuance, including those business tax credits GE relies on so heavily, as well as posted tax rates.

Congress may be blind to such facts, though, because of the money GE spends to influence Washington. Last year GE spent $39.3 million lobbying Congress, roughly $73,000 for every senator and representative. That’s four times what it spent back when its American tax rates, and its share of profits taken in America, were both much higher.

Flash mobs and GE

Urban mobs need to redirect all that anger.

I'm surprised GE headquarters hasn't been burned to the ground yet. Local populations could make quick work of such places, with the right kind of organization. [note to FBI - we're onto the sting thing]

There is no place for the likes of GE in the 21st century.

It's France... 1788... but nobody understands yet, that Americans mean business with these crooks. Let's get started.

"Urban mobs" in USA?

"It's France ... 1788 ..."

"with the right kind of organization ... "

-- excerpted from Anonymous Drive-by's comment, "Flash mobs and GE"

I don't see any of it, not in the USA in 2011 and very unlikely in 2012.

I don't see urban mobs, unless they are at or leaving a sports event. Urban gangs, yes, but their horizon ends with their turf and their expectations for short-term profits. (Besides, they are thoroughly infiltrated by the police and, if they become at all politicized, by DHS.)

As for "flash mobs" -- yes, that's interesting as a sign of growing social instability, but flash mobs do not make an effectively coordinated attack on the corporate HQs of MNCs. Flash mobs in a context of social instability mean nothing, unless probably increased funding and enlarged power for governmental agencies of repression and increased tendency toward hoarding of guns, ammo and precious metals.

For flash mobs to be effective in a campaign of general resistance to corporatism, you first need a national identity including a kind of national economic class consciousness. You even need at least a fuzzy commonly shared agenda (or what was once known as a 'transitional plan'). And then you need a non-flash decentralized organizational element that can survive and even thrive after the predictably severe police repression that will inevitably ensue after any mass move against financial elites -- not to mention the predictably intensified "sting thing."

I don't see anything like or indicating France in 1788.

Argentina in 2001? There are signs of that! But Argentina was never a superpower! Great Britain in the 1930s would be more like it, "Rule Britannia" with a hollow ring to it, mocked by the Soviet Union, Germany and Japan.

And I sure don't see any signs of urban mobs purposefully targeting any corporate property, certainly not HQ buildings of MNCs, with or without "the right kind of organization."

In the USA over the past century or so, unorganized urban mobs have arisen out of police repression of organized peaceful protests.

Of course, over the last decade or so, we could say that "unorganized urban mobs" have been created by phenomena of homelessness. That also occurred in the 1930s, and in the early 1930s these "mobs" were organized to some extent by Wobblies. (How long has it been since a worker caused a walk-out at a work site by crying out "Wobble!" How long has it been since a worker cried out "Wobble!" anywhere in the USA?)

I'm not organizing anything except awareness of what's going on, especially regarding the upcoming votes in Congress on the three FTAs. Here, I am just trying to be objective and descriptive. This is EP.

Going back to the 1920s, mass rallies of the KKK, fairly well organized and largely peaceful, were not uncommon in many large cities. Going back to the early 1930s, strikes repressed by "Pinkerton" attempts to break them up, became large enough to shut down entire cities. But none of these included attacks on corporate HQs, and all of these were organized as peaceful protests -- although sometimes in the early 1930s, physical conflicts regularly arose out of confrontations. But from those conflicts, when substantial damage followed, it was protestors who were damaged, not corporations. And the substantial damage to protestors (particularly, deaths of protestors) ignited, not attacks on corporate property, but large peaceful protests including large turn-outs at elections such as 1932. (The huge Democratic victory in 1932 was, in part, a reaction to the machine-gunning of a march by veterans protesting cuts in their pensions).

Although there were probably several anti-war protests back in the legendary 1960s involving peaceful protestors numbering a million or more, the most recent politically effective mass protests drawing about a million, here in the USA, were surely the Million Man March, led by Farakhan in 1995 and the somewhat-smaller Million Woman March in 1997.

It is worth noting that no such marches are in the works as of 2011, and if they are to occur in 2012, they will almost certainly be organized by the White House.

In the 21st Century, there were almost no anti-war protests until after 2003 -- despite condemnation of the unconstitutional authorization of the Iraq attack (2002) by the late great Senator Robert Byrd (West Virginia). Earlier there were almost no protests in December 2000 against the Supreme Court's usurpation (Bush v. Gore, December 2000) of the powers given to the State of Florida by the U.S. Constitution. There were peaceful and well-organized anti-war demonstrations -- including some "urban mob" after-effects -- from 2004 through 2007 or 2008. Although these met with substantial public approval and police repression was limited, the numbers never approached those reached in the 1960s. The public generally has been content to view protesting as a spectator sport, a TV sub-genre.

Urban mobs -- with the "right organization" managing to avoid penetration by DHS agents ("the sting thing") -- attacking corporate HQs in the USA? And that based on unity of the American working classes? That will be the day! May I live long enough to see it!

Coming soon - organized mobs?

What do I know? I'm an old man, living in my little part of a big world.

Maybe there will be effective mass demonstrations coming and lots of them, although I still don't see attacks on corporate HQs. (Wouldn't they have to go to Shanghai or Dubai to do that?)

Anyway, here's link to Michael Collins' at themoneyparty.org article titled

Anonymous to Occupy Wall Street

complete with video, link, image

GE bailed out with money created out of thin air

GE gets money printed out of thin air from the Federal Reserve and then uses those funds to transfer technology to China so that eventually their Chinese joint venture partners can absorb their technology and put them out of business. Because we have a system where money gets printed out of thin air which causes people to put money into stocks to preserve their savings, CEOs will for the short term give away the farm so that they can cash out their stock options that get inflated from the constant printing of money that goes to special interest in Washington like the multinationals whose only goal is to outsource everything.

Excellent! In a nutshell

Mo wins award for concise writing.

But it gets worse. Not only does GE outsource technology, but their tax refunds are invested in China, as are much of the dividends they pay out! And, worser, many CEOs aren't cashing out to "invest" in anything but gold. In other words, the most profiteering of the CEOs aren't investing at all -- they are seeking treasure to squirrel away like pirates of old. (Of old, pirates were sometimes apprehended to be hanged by the neck until dead ... or occasionally quartered after being drawn.)

GE shareholders

Excellent piracy! They robbed their shareholders in 2008 by a 75% dividend cut, which has yet to be restored. Where are their shareholder lawsuits? Talk about free money -- Immelt could teach the Fed something.

Frank T.