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Yay for free trade. China is winning because they are more efficient. You bet. Except theiy're not.
The Alliance for American Manufacturing (AAM) just released a report showing the Chinese government subsidized its steel industry, for energy alone, in the amount of $27.11 billion.
China
was a steel importer, but became an exporter in 2005, and now accounts
for 40% of the world's steel production. This growth is
enormous. Enormous. Globe changing enormous. And the government owns a controlling stake in many
companies.
“This shift from a net importer to the largest exporter in a span
of only two or three years is staggering,” said Dr. Haley. “Our
analysis shows that energy subsidies have a very strong correlation
with Chinese steel exports. In fact, the connection is so clear that,
essentially, it’s possible to almost perfectly predict China’s steel
exports from its energy subsidies.”
Conducting an extensive market-based study was a difficult and daunting
task. “There is an absolute lack of transparency and people were afraid
to talk to us. The amount of the subsidies is enormous and they are
conservatively estimated in this report,” said Haley.
I'll be waiting for David Brooks and sign-every-trade-agreement Thomas Friedman to write an article on this. I suspect I'll be waiting a long time.
Energy subsidies cause more consumption of energy. More
consumption of energy causes pollution, and causes $100 oil.
By the way, here is a picture of their efficiency.
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