|
Well... the NY Times editorial board is being forced to acknowledge China's strategic mercantilism through currency manipulation (though they don't acknowledge the other parts of China's strategy).
While the strategy is still working for China, it is exacerbating economic weakness around the globe. ...
As China has flooded the world with exports, it has edged out suppliers from other developing countries. This was bad enough when the world economy was growing briskly.
Now China’s strategy is doing considerably more harm. In many countries, fiscal stimulus efforts have been weakened by inflows of cheap Chinese imports that have soaked up some of the money added by these government programs.
Good. They recognized the problem. Now what of the solution?
There are healthier strategies for China to follow. In particular, it could deploy some of its mountainous reserves at home to pay for long-neglected social spending: on health care, education and pensions. This would provide substantial economic stimulus and improve the lives of its people.
That's a theoretically healthier alternative, but not a solution. What about actually acting to counter China's currency manipulation? Oh my, that would be protectionism!
If China keeps it up, other countries are likely to use their last available weapon — protectionism — to stop the onslaught of artificially cheap Chinese goods. A trade war is easy to start and hard to contain. It could hit everybody’s exports, disrupting growth everywhere. ...
A trade war with China would be disastrous and bound to escalate around the world. Restraint is needed. But we fear no one is going to feel restrained if China doesn’t change its strategy.
Summary point: The free traders simply will not state that another country is engaging in protectionism. No matter how bad their conduct. They will express concern, but not call it protectionism. Conversely, they are quick to label U.S. actions as protectionism, if measures to counter the other country are even mentioned. They are, in essence, protecting the protectionism of others.
Trackback(0)
 |
TrackBack URI for this entry
Subscribe to this comment's feed