Quote:
Originally posted by marichiko
tw, my main point is that China is not playing by the same rules we are. The Chinese government shoulders labor costs as ours does not. Chinese banks with government bacikng offer Chinese businesses loans at lower interest rates than the ones available to US companies. Many Chinese industries are still protected by restrictions against the import of foreign goods. Our industries lack equivalent protections. It is NOT a level playing field where China is concerned.
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And the massive George Jr money to GM and Ford to build hybrid automobiles does not constitute government subsidies? The massive government money to the sugar industry is somehow different? The massive tarrifs on imported steel is only an exception? And massive support payments to American rocket launching companies from the Defense Dept (they outrightly said it was because those launching companies are losing commerical business) is somehow different from what China does? (China is a direct competitor in the satellite launching business.)
So you think China is an unfair trader because companies get money at low interest rates? Let's see which government has lowered short term interest rates lowest? On 3 month money market rates: Australia 5.57%; Britian 4.06%; Canada 2.24%; Denmark 2.15%; Sweden 2.55%; and Euro area 2.08%. In the meantime, US interest rates are at 1.00%. Short term interest rates are manipulated by governments. So who is the unfair trader by keeping interest rates so low?
In the meantime, makes no difference whether the money comes from government or company books. In the end, it is still a cost carried by that nation that effects overall trade balances. It still ends up costing them as much. That lower interest means they must make up the difference on world capital markets. Tit for Tat in the world of economics.
You should have cited China's minimal respect for intellictual property rights. That is a serious trade problem. But in the meantime, don't throw rocks when inside a glass house. They are getting much new business because they do simple jobs better - meaning a overall sum of various parameters that include price, quality, originality, etc.
BTW, I have personal observations of Chinese trophies verse their more expensive American versions. The Chinese are equal or in some cases superior to those being made in America at higher price. We do have some legitimate complaints against China. But lately, they and other nations tends to win more against the US - and justifiably so. Steel is just one example of how America lately has become a more unfair trader. If you really want to see a complete picture, then review what the US (George Jr) did in the WTO conference in Cancun Mexico last September 2003. Again, arguements from within a glass house probably without perspectives such as an example in Cancun. Both sides have been distorting or outright violating the rules in their own favor. This has not caused major outsourcing of jobs.