Thursday, March 10, 2005

New Addition to the China Sucks Dossier

So since the textile quotas have been lifted, China has pretty much flooded the textiles market with cheap clothing and likely are selling below cost in order to take full control of the market. The New York Times has the following speculation that I do not doubt is true:

"Some trade experts say that China has achieved its status over the years by providing questionable bank loans and subsidies to its industry."

The benefits of free trade with China are largely a myth. They peg their currency to artificially low levels compared to the dollar in order to maintain a cost advantage. While they may be slowly removing tariffs because of international pressure, they certainly still are providing generous government support to their industries effectively creating invisible tariffs for their goods. American companies keep on thinking that they are benefiting from the large Chinese market of over one billion souls, but they are almost always forced to "partner" with local businesses who soon steal their intellectual property and sell knock-offs to unmatchable lower prices.

Just because many in American business are blind to what China is doing, don't be fooled yourself. China is not engaging in free trade, they are trying to be a mercantalist country, not looking for mutual improvement for trade but only for deals that help them the most and help their economic competitors, like the United States, the least. They aren't just hurting developed countries as their moves to dominate the textile industry are also ruining the economies in SouthEast Asia who specialized in textile production. This is not what those countries need after facing the devasting effects of the Tsunami.

While the Chinese government engage in these anti-competitive practices, they are rapidly ramping up their military to challenge American supremacy, making moves to take control of Taiwan (now a liberal democracy) and continually oppressing any political opposition to the "communist" government in the PRC.

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