http://www.washingtonpost.com/wp-dyn/content/article/2010/03/21/AR2010032101111.html?sid=ST2010032102647
China's commerce minister, Chen Deming, argues that tariffs levied by the US on China's imports will harm America the most. These remarks reflect the growing conflict over China's actions to hold the value of the yuan fixed. Obama wants the yuan to appreciate in value to the US dollar, resulting in an increase US exports to China. Chen argues that current US sanctions against exports of advanced technology like supercomputers and satellites, contribute the widening US-China trade imbalance. Globalization has made US protectionism far more difficult in the present, because the US no longer has the industries to produce goods like TVs and telephones. Chen also says that if the US wants to resolve the trade imbalance, they should adopt a more liberal free trading system with China instead of continuing to restrict exports.
Chen is advocating the neo-liberal ideals that focus on free trade as the main means to improve a country's economy. However, the US is turning to protectionism and trade restrictions to deal with this conflict. Like Ha-Joon Chang argues, many of the world's richer states are still fairly protectionist when it comes to economic trade. He also shows that protectionism and government regulation can still allow for economic growth. However, such policies are less likely to work when there is a -226 trillion dollar trade deficit in the balance. Rigid export sanctions on high-technology to China also has realist elements. By denying China supercomputers and satellites, the US forces China to develop their own technology, and slows China's progress to becoming more powerful state and potential threat.
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This article relates to what we were discussing in class. While neo-liberalists argue that developing countries should participate in free trade and the world market, and critical theorists, such as Ha-Joon Chang, argue otherwise, the issue of what has become the norm for developed countries, and how it has become the norm, is brought up. While it seems that countries advocating for free-trade, such as the US, would practice it themselves, this is not entirely the case. It would be interesting to take a very close look at developed countries' actions and really see what their economic agenda is.
ReplyDeleteI agree what Gmarcon said. Actually, there is certain period for a country to turn to protectionism. But the reason for which the US turn to levy heavy taxes on Chinese products is different from the reason for which the Chinese government levies heavy taxes on US products. Personally, I cannot see there are some long term benefits for the US to adopt protectionism. Because it is not possible for the US to produce cheaper goods than China because of the labor cost. For China, it levies taxes on some American cars to protect its own auto industry.
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