TRANSPARENCY IS DOOM:

Bush steps up to China: An unusual US tariff on a subsidized Chinese import also challenges communist power in Beijing. (CS Monitor, 4/02/07)

Such a US move might seem minor in comparison to the ballooning trade with China. After all, it simply slaps duties of about 10 to 20 percent on only one product: high-gloss paper. But it is expected to be the start of more US actions against subsidized goods from China - many of which have taken a wrecking ball to US industries and helped eliminate hundreds of thousands of manufacturing jobs.

With this concrete step, the Bush administration has reversed longstanding US policy that treated China as a nonmarket economy, or the kind in which the government's hand is so strong and opaque that it's difficult to calculate subsidies. These days, however, the state largely uses loans to control hundreds of semipublic enterprises, which makes its role more transparent while still distorting global markets. These loans, which still help the party stay in power, are often not repaid, which has left the government with an estimated $1 trillion in bad debts.

The notion that they can be capitalist and communist is loony.

Posted by Orrin Judd at April 1, 2007 8:13 PM