Recession puts focus on U.S.-China economic ties

The Kansas City StarMay 1, 2009 

The warehouse at Top Innovations on Troost Avenue is stocked from ceiling to floor with boxes of infomercial wonders of steam.

Gadgets for cleaning and shining and making wrinkles disappear just like that. And each shiny metal and plastic gadget is made in China.

Company president Benny Lee's trip to five Chinese cities last month revealed the recession on full display. Half-empty hotels. Shuttered factories. An exodus of workers from coastal manufacturing hubs.

"You can feel it," he said. "They have too much of everything" – raw materials, production capacity, people seeking wages – "and having too much of something is usually a problem."

The old cliche: When the U.S. economy catches cold, the rest of the world comes down with pneumonia.

The wheezing from America and China – the world's largest economy and its largest work force, respectively – shows just how contagious globalization has made our economic ills:

• Low mortgage rates here are possible in part because China still buys U.S. debt.

• As construction faltered across the United States and the rest of world, Chinese steel exports were halved.

• China Southern Airlines delayed taking two 777 freighters, so Boeing Co. may not get its money until next year.

• The last quarter of 2008, worst ever for U.S. toy sales, hurt deeply in China, where 4,000 toy plants are closed.

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