Tuesday, March 14, 2006

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Getting lectured to by the Chinese

John Thornhill reports in the Financial Times that China doesn't like the way people are bitching about globalization:

Long Yongtu, the diplomat who negotiated China’s entry into the World Trade Organisation, has urged western governments to stop politicising trade and start telling their voters the truth about globalisation.

He said that some politicians in Europe and North America had been blaming China for problems in their own economies that they had failed to tackle themselves.

“There are many misconceptions about globalisation in Europe and North America,” he said. “Governments should not deliberately politicise trade and economic matters.”

China and other developing nations in Asia did not like to be a scapegoat, he said on Saturday at the World Deauville Conference in France, which is designed to strengthen relations between Asia and Europe. “We have to have more public education to understand that globalisation is unavoidable.”

To which I say -- it would be a hell of a lot easier not to politicize trade with China if the government didn't a) intervene on a continuous basis to keep the yuan undervalued; and b) try to create companies that are global competitors but happened to be state-owned.

[You're saying that these things are a big deal?--ed. I'm much less troubled than most of my readers on China's state interventions -- it's their inefficient policies, not ours. However, to ask Western governments to keep politics and economics separate when the Chinese state can't seem to do the same thing is a bit rich.]

UPDATE: Based on other FT stories, I'd have to conclude that this exhortation has had exactly zero impact on either the United States or the European Union.

posted by Dan on 03.14.06 at 12:18 PM


Purim Sameach!

I think the Chinese statement is just a big Purim joke!

posted by: amechad on 03.14.06 at 12:18 PM [permalink]

“We have to have more public education to understand that globalisation is unavoidable.”

Except death everything is avoidable.

Saying that something is "unavoidable" is a political choice.

posted by: JLS on 03.14.06 at 12:18 PM [permalink]

If our founding fathers had kept economics / trade unpoliticized the Revolution never would have happened!

posted by: Useless Grant on 03.14.06 at 12:18 PM [permalink]

By Golly Useless Grant, you're right. Why, everyone knows that Washington, Franklin, HAMILTON, were are libertarians rebelling against the Mercantilist policies of the British Empire. That's why once they kicked the limeys back to old blighty, they set up a state based on libertarian principles, totally free trade, and privatized public services. And that's what made our nation great.

As they say here...go on, pull the other one

posted by: Mitchell Young on 03.14.06 at 12:18 PM [permalink]

"Bitching in Europe and the US"...that damn free press and executive oversight.

posted by: centrist on 03.14.06 at 12:18 PM [permalink]

The good news is that the Chinese policy of managing their currency vis a vis the dollar is doomed to fail. Case in point, the futile attempt by the US and Japan to "manage" the yen/dollar relationship in the 80s and early 90s.

The bad news is that the longer China attempts to fool the markets, the worse the impact on world trade.

posted by: Steve on 03.14.06 at 12:18 PM [permalink]

The Chinese situation can't be compared to the attempt by the US/Japan to manage the exchange rate in the 80's. China's measures are a lot more draconian, and the effects are different. I'm more worried about the secondary effects of an undervalued yuan: which is China's increasing dollar reserves. Dollars are useless unless you can buy something real with it. What is China planning to do with all those reserves? They'll have a hard time buying assets with it since governments frown upon a state-backed acquisition.

posted by: Ainsley on 03.14.06 at 12:18 PM [permalink]

As China becomes the largest exporter, it will have to become the leading promoter of free trade, which it will have a difficult time doing considering where it is starting from.

posted by: Lord on 03.14.06 at 12:18 PM [permalink]

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