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Written by Stumo
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Tuesday, 30 October 2007 |
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How to you ferret out subsidies in China when the biggest companies
are government owned? Where does the government stop and the
company begin?
The Chinese steel industry is in major growth
mode. That would be fine if it were because of that mythical
beast, "comparative advantage." But that mythical beast exists
only in children's books, like the troll under the bridge in "Billy
Goats Gruff." Their steel industry grows from massive subsidies.
The European steel industry is looking for 25% to 40% duties on cold-rolled and galvanized steel to neutralize China's actions.
The
free traders will shout something about "protectionism" and "trade
war". But what does the dispute have to do with free trade except
to seek it? And how is it a way when you merely neutralize the
unfair conduct of the other, but not punish it?
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