Big numbers.

[T]he International Iron and Steel Institute announced that the Chinese steel industry is responsible for approximately 51% of all carbon emissions released by steelmakers worldwide. ...

But what’s hard - and interesting - is determining why China’s share of steelmaking carbon emissions (51%) is so much larger than its share of steel-making capacity (35%). The obvious answer is that China doesn’t enforce laws requiring pollution abatement equipment on its smokestack industries. I’ve probably visited a dozen Chinese steel mills over the last few years, and every one has fallen below the environmental standards set and followed at similar facilities in the developed world. In most cases, there is little to no pollution equipment at all. In other cases, the pollution abatement equipment is installed - and unused. This is nothing new: Chinese officials have commented publicly on the tendency of Chinese industrial facilities to run pollution equipment only on the occasion of an official visits.

Self explanatory.  China's Huawei Technology and Romney's Bain Capital Partners plan to purchase 3Com.  Sensitive technology is the issue. 

In case David Brooks or Thomas Friedman try to tell us that Chinese currency manipulation does not exist.  Prime Minister Wen Jiabao said yesterday:

“China will continue to perfect the renminbi exchange rate regime in a gradual, proactive and manageable manner, give a further role to the market in determining the exchange rate, and will bring flexibility to the renminbi with a view to enabling capital account convertibility,” Mr. Wen was quoted as saying at a European Union-China business forum.

This is an admission that the market does not determine China's exchange rates.  The government does.

We'll see what Mr. Wen's statement - "give a further role to the markets" - means in the next few weeks. 

China has now officially explained its reasons for preventing U.S. Ships from entering Hong Kong's harbor recently to seek shelter and supplies during a storm at sea. 

China blocked the visit to Hong Kong last week of a United States aircraft carrier battle group and other American warships in retaliation against the Bush administration’s proposed upgrading of Taiwan’s Patriot anti-missile batteries, Chinese state media reported today.

This is EXACTLY why sovereign wealth funds investing in the U.S. are unrelated to free trade or free markets.  It is foreign policy and national security. 

Consider this hypothetical scenario, which is closer to reality than you want to believe.  A Chinese government owned company acquires a majority stake in a major U.S. lending institution named, for example, American Mortgage Company.  The U.S. has a mortgage crisis.  Separately, our President welcomes the Dalai Lama for a high profile state dinner.  China protests by cutting off mortgage applications for 2 weeks, or increasing the rate of foreclosure proceedings over a 3 month period.

Just a foreign policy matter.

Yup.  But it's not free trade.  It's not ordinary foreign investment.  And its not "the free market working."  Its naivete.