Comments on: Chinese Steel Export Rebate to Fuel Trade War?

By: Hugh

Hugh — Thu, 11 Jun 2009 19:22:06 +0000

I would agree with ronald that China is doubling down on export directed production increasing its already great overcapacity in this area. I would say to that protectionism is increasing quietly in most countries.

To mxq, "I'm starting to really wonder if policiticans in general are all utterly useless."

This is one of the those good news/bad news things. The good news is that not all politicians are utterly useless. Think of Lincoln and FDR. The bad news is that all of the current ones are, Democrats and Republicans, with only a smattering of exceptions.

By: mxq

mxq — Thu, 11 Jun 2009 16:16:45 +0000

sorry, just to add, setser puzzles over the same issue on the trading imbalances in his post, Investment up over 30%, imports down 25%?:

"To me, though, the biggest puzzle is on the import side. A strong, growing economy driven by a surge in fixed investment would normally be expected to generate strong demand for the rest of the world’s goods, especially if China is growing far faster than the rest of the world."

hmmmm...sausages, anyone?

By: mxq

mxq — Thu, 11 Jun 2009 15:59:58 +0000

add to that a 13bn trade surplus after an unprecedented drop in exports last month. as pettis often points out, china's gross demand might be going higer, but net demand is still solidly negative, facilitating the exportation of unemployment and overcapacity. It's one thing to perform triage on the exporting industry, but its another to stack the deck and make globalization a losing proposition.

So lets see, oil's doubled since Feb. and China's surplus is as robust as ever and the current US administration has backtracked on almost everything it promised on these two fronts. I'm starting to really wonder if policiticans in general are all utterly useless.

By: ronald

ronald — Thu, 11 Jun 2009 13:29:26 +0000

China has no Plan B!! The central planners are busy in China trying to keep the society together today the misleading MSM narratives about China suddenly becoming a consumer driven economy is pure illusion all driven by multi-national corporations along with the financial sector PR depts.

By: Brick

Brick — Thu, 11 Jun 2009 12:09:26 +0000

What I would argue is that china is positioning its self so that it can float its currency.This comes at a time when china announces lenders can issue RMB bonds through hongkong.
http://www.chinadaily.com.cn/china/2007-01/11/content_780557.htm
More on the tax rebates can be found in the following link.
http://english.peopledaily.com.cn/90001/6673841.html
Michael Pettis hints at the implications behind the move in the following link under his stimulus – at what cost article
http://mpettis.com/