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    China'S Mercantilism Makes Foreign Headache?

    2012/4/11 18:25:00 13

    ChinaMacro EconomyForeign Countries

    In the April 9th issue of the US globalist magazine, the original question: what should the United States do with China? Before the first 10 years of twenty-first Century, China adopted a series of measures to encourage foreign direct investment, many of which carried

    mercantilism

    And unfair colors.

    Although the consequences of mercantilism in Beijing are not always conducive to the US economy, American companies are benefited from the low cost of manufacturing platforms.

    Americans also benefit from cheap goods as consumers.

    Although China's policies occasionally lead to complaints from the US industry, the United States is generally satisfied with this relationship.


    This situation began to change in 2006.

    China has made strategic decisions, based on the successful example of Japan and South Korea, turning to the development mode of "Chinese companies" to help Chinese enterprises climb up the value chain and gain global market share, which are usually at the expense of foreign companies.

    Today, not only are there conflicts between American workers and Chinese workers, between American companies and Chinese companies, just like in the US and Japan.

    This fundamentally changed the intensity and proposition of the US trade policy toward China.


    To effectively respond to this challenge, US policymakers must accurately grasp China's economic policies and Sino US trade.

    Unfortunately, the two prevailing views are unwise: "

    Free trade school

    It is considered that putting pressure on China to terminate its mercantilism policy will be counterproductive and not conducive to trade relations between the two countries. The protectionist school believes that trade with China is fundamentally not in line with the economic interests of the United States and that protectionist tariffs should be applied.


    The two viewpoints are biased.

    The United States does not need to close its doors to become a strong competitor, but it must require other countries to act according to the rules, especially China.

    There is no indication that Beijing intends to give up innovative mercantilism voluntarily.

    Although successive US governments have been trying to maintain contact with China through dialogue, this has not helped solve the problem.


    China does this not because its policymakers do not understand the merits of the US system and the Washington consensus.

    They knew all about it but refused to accept it.

    Therefore, it is time for the United States to impose stronger measures against China to force its entry into the global trading family and to restrict mercantilism policy.


    The most important point is to recognize the seriousness of the problem and to produce real, lasting and effective action.

    The office of the United States trade representative has been too caught up in past wars, such as tariff wars and trade agreements. It has not prepared for the current rampant innovation mercantilism war in mechanism or ideology.

    Perhaps the most important challenge for the United States to urge China to reform is that too many US officials believe they have no strong weapons to force China to change unless Beijing believes that changes are in their own interests, or the United States is at a loss.


    American policymakers need to do two things.

    The first is to confirm the need for stronger legal tools and to implement them in the international arena, such as

    World Trade Organization

    The second is to join forces with other countries with common understanding to put pressure on them.

    The new free trade union should be tougher on China unless Beijing weakens mercantilist policies.

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