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The shift in these production bases severely affects cities acting as the home to these firms as they pay taxes/revenues to their cities. This results in reduced benefits and facilities to the citizens of those cities/towns.

The media-tracking data also suggests the majority of the U.S.-based multinational corporations shifting production to China are not simply targeting a Chinese market.
Companies such as La Crosse Footwear (winter boots), Lexmark (printers), Motorola (cell phones), Rubbermaid (cookware and storage products), Raleigh (bicycles), Cooper Tools (wrenches), Mattel Murray (Barbie doll playhouses), and Samsonite (luggage) may have moved their production to China, but they still intend to serve a U.S. and global market.

C) China's heavy buying of U.S. debt has lowered the cost of money in the U.S.

In the first half of 2004, China's total foreign exchange reserves topped $460 billion. In size, that puts China's cumulative dollar account at roughly equal to a third of its gross domestic product. If China simply spent its dollars, it would flood the world market with American currency and drive the dollar down. But China, instead of selling its dollars and pushing the dollar down, it lends them back to the U.S.

As long as China is an aggressive lender, Americans - whether borrowing for their own private purchases or acting in the roles of taxpayers - can borrow money at lower rates than they would otherwise have to pay. Much of the recent boom in real estate prices in America, especially in the East and West Coast markets, is attributable to these low rates.

D) Infringement of TRIPS and patent laws

Foreign companies have little defense against even outright theft of their technology in China. As studies show, about 92% of computers in China work on pirated software. Further, China's failure to police intellectual property, in effect, creates a massive global subsidy worth hundreds of billions of dollars to its businesses and people.

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* Contributed by -
Syam Krishna V. K. ,
B.Tech. (Prod. Engg.), Kerala University,
MBA 2007, DOMS, IIT Madras.