Thursday, June 30, 2011

Asia is good for America

From The International Herald Tribune:

Asia is good for America


With U.S. unemployment hovering around 9 percent, ''jobs'' is now a fraught word in America, and no region receives more attention in this context than Asia. ''Jobs lost to Asia'' is a common refrain. Yet the facts tell a different story: Trade and investment with Asia create jobs in America.

America's anxieties about the economic challenge from Asia are understandable. Some jobs in some sectors have been lost to Asia, beginning with textiles and clothing after World War II and continuing with inexpensive electronics, steel and shipbuilding. Outsourcing is occurring.

The rapid economic growth of China, India, South Korea, Vietnam and other countries is seen as negatively affecting American job prospects. Whether the issue is innovation, preferential visas for immigrants, artificially propped currency values or outsourcing, much of popular discourse is about America left holding the short end of the stick.

But trade, foreign investment, Asian students at American universities, tourism and even immigration create hundreds of thousands of jobs for Americans.

Using largely U.S. government data, a new project from the East West Center called Asia Matters for America gives a more positive image of the impact of America's interactions with Asia on the U.S. economy. The overall picture shows remarkable economic and employment gains from interactions with Asia.

Take trade: True, persistent and in some cases growing trade deficits are a fact in U.S. goods trade with Asia — though not in services trade. But American goods and services exports to Asia in 2009 were valued at $414 billion — more than to the European Union or to Canada or to Mexico. What's more, trade is rising rapidly. It's estimated that some 850,000 American jobs are accounted for by exports to Asia — nearly a third of all employment from exports.

Foreign direct investment from the Asia-Pacific region also creates American jobs. It is estimated that Japanese direct investment in the U.S. accounts for some 665,000 jobs, and Korean investment — particularly in its new automobile production factories — is rising rapidly. In 2010, three Asia-Pacific countries — Japan, Australia and India — invested more in the United States than America did in them. China's direct investment is also expected to boom, bringing more American jobs.

Moving beyond ''commercial'' sources of employment and economic gain, Asia's benefit to America is increasing. About 700,000 foreign students study in the United States, and more than half are from Asia. Apart from the societal benefits of such exchanges, the Institute of International Education estimates that Asian students contribute about $9 billion to the U.S. economy each year. Many stay on to become entrepreneurs, creating new companies that provide employment. Silicon Valley in particular is known for its Asia-born, U.S.-educated entrepreneurs.

Asians increasingly contribute to U.S. tourism. Recent figures from the U.S. Department of Commerce show that Japan, South Korea and Australia were among the top 10 countries in international arrivals to the United States. China and India figured in the top 10 in spending.

Another growing aspect of U.S.-Asia interaction is immigration. Nearly 10 million of the 38 million U.S. residents born outside the United States are from Asia, and they are making a strong contribution economically, culturally and politically. A study by Vivek Wadhwa of Duke University found that ''in a quarter of the U.S. science and technology companies founded from 1995 to 2005, the chief executive or lead technologist was foreign-born.'' These companies generated $52 billion in revenue and employed 450,000 workers. Immigrants from India, China, Taiwan and Japan comprise a high share of these company start-ups.

Such interaction between the United States and Asia will continue to grow in the years ahead, improving the American economic and employment outlook.

SATU LIMAYE is director of the East-West Center in Washington.

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