At the ASI.
Trade’s about consumers, not producers. Sigh.
Tags: Timmy Elsewhere
// Jul 29, 2012 at 10:57 am
China subsidises it’s products.
Western manufacturers go kaput.
China removes subsidies
Profit for china, unemployment for the west.
I don’t know enough about economics to know if that is bull or not, but that’s what the average Joe thinks.
Tim adds: The average joe probably does think this. Who knows, maybe the average Chinese or Brit politicians does as well. Thing is though, in the actual data, it’s very difficuilt indeed to see this happening.
Take rare earths, an area where China has been flexing its muscles just recently. As soon as they tried exploiting the monopoly on production they had then mines started springing up all over the world. Their market share will go from 95% to perhaps 50% over the next four years.
People may well try to do what that average joe thinks they do: thing is, we can’t really point to any examples of people successfully doing it.
bloke in spain
// Jul 29, 2012 at 12:24 pm
Sorry Mr Fake but, to take Tim’s argument one stage further, what’s wrong with the scenario you’ve painted?
Consumers get Chinese solar at cheap prices subsidised by Chinese. Chinese drop subsidies after x years, so western manufacturers get to compete on a level playing field. The only difference is the x years. Meanwhile consumers have benefited from x years of wealth transfer from China.
Taxing Chinese imports is simply another way of saying subsidise western manufacturers for x years. Why would one want to do that? Particularly as, under your scenario, the Chinese have done all the heavy lifting of bringing the technology to market in it’s early forms. Suffered the mistakes & dead ends. Western manufacturers can enter a mature market with the advantage of the latest technology & brand new, state of the art, factories.
Seems an opportunity for a rousing round of (low cost) applause to the Chinese for being so generous.
Subsidized US and EU Solar Panel Co’s Say They Can’t Compete With Subsidized Chinese Competitors | motorcitytimes.com
// Jul 29, 2012 at 12:25 pm
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// Jul 29, 2012 at 1:38 pm
Thing is we do like to produce. Because being able to produce makes one able to consume. As the west is currently learning consuming without producing can only go on for so long. Then it comes to a stop and causes problems.
Sure I accept the points about subsidies, lower costs and so on, but if you think China is some kind of liberal free-trade capitalist place it isn’t. It only is to the extent that introducing liberal free-trade capitalist stuff has enabled the state/party machine (which runs the entire country, the productive bits at least, as a kind of glorified sovereign wealth fund) to profit. Where that means doing distinctly non free-trade capitalist things (like holding your currency down, subsidising basics internally to compensate for that, restricting freedom of travel abroad, restricting freedom of foreigners to work and invest in China, dumping to disrupt overseas producers and negotiating exclusive supply contracts with overseas suppliers) the pretence of neoliberal free-trade capitalism is thrown out of the window. China is the mercantilist to end all mercantilism. I hope.
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