Chinese producers are supplying cheap consumer goods sold in the U.S., mostly at Wal-Mart and other low-price retailers, resulting in a huge trade imbalance. This is evident at the ports of Los Angeles and Long Beach, where nearly half of total U.S. imports arrive. As Long Beach communications director Yvonne Smith told PBS' "Frontline," "China is doing the manufacturing; the United States is buying it."
Meanwhile, the middle class that once filled America's malls is declining. The U.S. mall industry anticipated a splintering middle class in the 1980s, responding with fashion malls for the better- off and emphasizing entertainment to attract what was left of the mass market. Then Wal-Mart came along and stole the growing low- price consumer market, becoming the world's largest retailer as well as China's best customer. That relationship helped accelerate the loss of U.S. manufacturing jobs. So what was once unheard of is now becoming more common: U.S. malls closing down.